Thursday, July 3, 2008

Mid-Week Fresh & Easy Roundup: Fresh & Easy Gets Caught in A Land Use Dispute; Those Near-Famous Mixed Grill Packs; More On Manhattan Beach

Tesco's Fresh & Easy Neighborhood Market

Land use dispute puts Fresh & Easy in the middle of squabble

The San Diego Union-Tribune newspaper is reporting today about an escalating land use dispute between commercial developer Pacific Development and a competing commercial developer and non-profit group over a 4.3 acre vacant piece of land in the city-owned by the Southeast Economic Development Corp.--an arm of the city of San Diego Redevelopment Agency--that's set for a major development. Tesco is in the middle of this escalating dispute by virtue of the fact one of its Fresh & Easy Neighborhood Market grocery stores is set to be the retail food store anchor of the large commercial development.

Read the interesting piece in today's San Diego Union Tribune here. Tesco currently has six Fresh & Easy grocery stores in San Diego, with two more new stores currently in development.

Those near-famous Fresh & Easy mixed meat grill packs

On Tuesday July 1, we wrote here (see the item: "Fresh & Easy offering A 4th of July cookout for the frugal,") about Fresh & Easy's 4th of July holiday promotion--a mixed grill meat pack featuring beef burgers patties, mild sausage and chicken parts--along with a 12-pack of the retailer's store brand Latin or Hispanic-style beer--for twelve bucks.

We mentioned (tongue planted near-fully in cheek) in our Tuesday piece that since the promotion combined the meats and beer, non-beer drinkers might be out of luck, or perhaps would have to give the beer away and keep just the mixed grill pack.

In a press release distributed today (July 3), Fresh & Easy Neighborhood Market added some clarification (perhaps by coincidence or perhaps not) to the mixed meat grill pack and beer promotion, pointing out in the release that the mixed grill can be bought by itself for the promotional price of $4.99. At nearly five pounds total, that's about $1 per-pound.

In our piece yesterday, we pointed out we thought the twelve buck deal for the meats and 12-pack of beer was a good value because among other things, we estimated a super-hot deal for a 12-pack of beer like the one being promoted would be about $5.99 plus tax, thereby offering the mixed grill meat pack for about a dollar a pound, which is super-cheap.

Looks like we were, as our British friends say, rather "spot on" in terms of the respective promotional price of the mixed grill meat pack and the 12-pack of beer.

In its press release issued today, Tesco's Fresh & Easy Neighborhood Market said it sold nearly 1,400 packages of the mixed meat grill packs during a 12-hour period yesterday. There was no mention of how many 12-packs of the Latin-style beer were sold however.

More on the Manhattan Fresh & Easy store grand opening

UFCW union reps vs Fresh & Easy store employee throw down: As we reported yesterday representatives of the United Food and Commercial Workers retail supermarket clerks union were out in force picketing yesterday at the Fresh & Easy Neighborhood Market new store grand opening at 1700 Rosecrans in Manhattan Beach, (Southern) California. The store is the 62nd Fresh & Easy market and the first new store to open since the retailer took a three month new store opening break in early April.

The Fresh & Easy Buzz correspondent covering the store grand opening yesterday reports a scene occurred between about two dozen UFCW picketers and a group of Fresh & Easy store employees. While Fresh & Easy Neighborhood Market CEO Tim Mason was speaking, the group of UFCW picketers began heckling him, at which point a group of Fresh & Easy store employees began a round of loud cheers attempting to drown out the verbal protests from the union representatives. The union representatives eventually stopped.

CEO Mason has thus far refused to meet with UFCW leaders who want to discuss potential unionization of the Fresh & Easy chain. U.S labor laws do not require him to meet with the union.

Does this outburst of cheers by the non-union Fresh & Easy store employees mean the UFCW could be alienating the very store-level workers it wants to organize and bring into the union? Or was it just an appropriate response by the employees to the picketers rudeness?

Could the union's tactics, such as the picketing and verbal demonstrating at yesterday's Manhattan Beach store grand opening, along with the negative-oriented brochures, which as we reported here the union distributed to neighborhood residents a few days before the store opened, be causing a backlash against the union among Fresh & Easy employees?

Perhaps the UFCW needs to take a lesson from Democratic Presidential candidate Barack Obama--who the union supports for President and even got to send a letter to Tesco CEO Terry Leahy and Tesco Fresh & Easy Neighborhood Market CEO Tim Mason, asking them to meet with union leaders--and conduct a positive campaign, as Senator Obama has vowed to do in his bid to be President of the United States.

After all, after many years of trying and using similar strategies and tactics, the UFCW has failed to unionize non-union food and grocery retailers Wal-Mart, Inc., Whole Foods Market, Inc, Trader Joe's and a few others.

Perhaps the union would be wise, and more successful, if it created a campaign based on communicating all the positive aspects, of which there are many, being a member of the UFCW could bring to Fresh & Easy Neighborhood Market and other non-union supermarket chain store-level employees?

The last thing one wants to do after all--be it in food retailing, politics or union organizing--is to alienate the precise constituency you are trying to get to be a customer, vote for you, or become a member of your union. It's food for thought on the eve of Independence Day.

Cold and Sterile to warm and fuzzy? At yesterday's Manhattan Beach store grand opening, Simon Uwins, director of marketing for Fresh & Easy, said the following to members of the press, including the Fresh & Easy Buzz correspondent, at the event: "There were some who said it felt a little bit cold and sterile (the inside of Fresh & Easy grocery stores)," Mr. Uwins said. "We went into all our stores and, if you like, warmed them up, telling them about what we're about and adding color."

The warming up Mr. Uwins is referring to is the new interior design package Fresh & Easy first installed in its store in Laguna Beach, (Southern) California in May, as we wrote about in this May 16 piece, and is in the process of implementing in all of its existing stores.

Since January of 2008, Fresh & Easy Buzz has argued the stores are just that, a bit cold, sterile and lack a sense of place. Of course, from January to just recently, Mr. Uwins and the other Fresh & Easy Neighborhood market senior executives have in so many words claimed that position was rubbish, despite the fact we first even thought about it because numerous Fresh & Easy store-level employees and shoppers (and ex-shoppers) expressed that opinion to us.

Mr. Uwins said yesterday the Fresh & Easy executives came to the conclusion the stores are/were a bit sterile and cold based on customer feedback in the form of consumers filling out comment cards, emails to the effect sent to corporate headquarters, and from interviews in the stores with customers.

We're glad to hear Fresh & Easy listened to its customers, and to those store-level employees who spoke up about the store design. However, its fair to say..."What took you so long?" It's also fair to ask: "Why the absolute denial for so long that there just might be a problem with the look and feel of the stores?" But, we cheer the retailer's consumer response to the interior design issue in the form of Fresh & Easy's attempt to improve it with the new interior design improvements.

However, we've seen the Laguna Beach store interior post enhancements. It is improved. But the jury is still out on by how much.

The store interior look is warmer and a bit less sterile. However, the store still lacks a feeling of a sense of place, and in our analysis needs a few other changes and enhancements in order to provide the type of customer shopping experience Tesco needs to create in order to achieve its goal of making the Fresh & Easy stores primary shopping venues. But, we'll save that for another time. After all, there can always be a round two of enhancements now that the Fresh & Easy guys have listened to the customers, something we give them props for doing.

Short takes

All in the family: Tesco Fresh & Easy Neighborhood Market CEO Tim Mason was joined at the Manhattan Beach store grand opening yesterday by his son and three daughters who all live in the United Kingdom. We wish them an enjoyable Independence Day holiday weekend visiting California. Don't forget to spend some time at the pier in Santa Monica, check out Hollywood Blvd., (while there you can do a store check for Dad at the Hollywood Blvd. Fresh & Easy), enjoy the beaches, and hit an expensive restaurant every night. After all, with the U.S. dollar so low, you can live large with British pounds and Euros right now in America. And, the California economy needs all the help it can get.

Two hundred Fresh & Easy stores by end of February 2009: Marketing chief Simon Uwins said at the grand opening Tesco plans to have 200 Fresh & Easy stores open by the end of February 2009. This is the latest estimate in terms of store count by the retailer. Originally, Tesco hoped to have 200 Fresh & Easy stores opened by the end of this year. later it revised that number down to 150. However, if it meets the goal, having 200 stores opened by the end of February, 2009 is pretty close timing to that original estimate.

To get to 200 stores opened by the end of 2009, Tesco's Fresh & Easy will need to open 138 new stores between now and then, over that eight month period. That's lots of new store openings in eight months. There are currently 62 Fresh & Easy stores open. The retailer has announced it will open at least 30 new stores between July and of this year. That will give Fresh & Easy about 92 stores by the end of September, meaning in order to reach 200 stores by the end of February, 2009, it will need to open an additional 108 stores in the five month period from October 1, 2008 -to- the end of February, 2009. Achieving that is questionable.

For example, in the six month period from November, 2007 -to- April, 2008, Tesco opened 61 Fresh & Easy markets, which was a rapid pace in and of itself. In order to reach 200 stores by the end of February, 2009, the retailer will have to open more than twice that many new stores in a period of time with only two additional months (eight month period) than from November, 2007 -to- April, 2008. 138 new stores in eight months amounts to opening one new store about every other day between now and the end of February, 2008. Hold on to your grocery aprons folks.

Opening day customer count: Tesco's Fresh & Easy Neighborhood Market says 2,600 shoppers came through the doors of the new Fresh & Easy grocery store in Manhattan Beach on grand opening day yesterday. Wonder if that's counting the UFCW picketers and all the employees from Fresh & Easy Neighborhood Market corporate headquarters--which is less than a mile away from the store--who were at the grand opening yesterday?

All teasing aside, 2,600 is a good number for an opening day for the retailer. And, based on Fresh & Easy's report that 1,400 packages of the mixed grill meat pack on promotion were purchased yesterday, that amounts to more than one mixed grill pack for every other customer who visited the store sold. But at a buck a pound, how could they resist.

Store employee counts: Speaking of counting, numbers and press releases, we hope the same person who's been counting Fresh & easy store-level employees didn't do the customer and mixed grill meat pack sales counts yesterday.

In the press release issued today Tesco's Fresh & Easy PR department says the average number of employees per-store is between 20 -to- 30 people. In the July 1 press release about the mixed grill pack promotion, and in the July 2 release about the Manhattan Beach store grand opening, the PR department wrote each Fresh & Easy store employs an average of 25 people. In most all of Tesco Fresh & Easy's press releases prior to the July 1 release, the PR department said Fresh & Easy stores employee about 20 people per-store.

Having written more than one press release, Fresh & Easy Buzz knows how boring of a task it can be. We aren't nit-picking over the numbers: 20, 25, 30, all in the same ballpark. But we suggest the PR folks just stick to one scheme. If its closer to 20 people per-store, go back to that. If closer to 25, stick with that number. If its too hard to call, go with the 25 -to- 30 range figure.

On becoming the store check store of the chain: The Fresh & Easy Buzz correspondent covering the Manhattan Beach store grand opening asked a few of the store's employees yesterday how they felt working at the store in the chain located the closest (less than a mile) form the corporate headquarters, and thus becoming the store where company executives and others will be spending lots of time on a regular basis doing store checks, as well as using it as the store where they bring visitors, by virtue of the fact its so close to the main office.

Our correspondent says most all of the employees asked said they really hadn't even thought about it. However, the correspondent reported a couple of the employees did raise their eyebrows a bit shortly after the question was asked; and one said: "I will think about it now."

The three month pause and press coverage: Tesco's Fresh & Easy is garnering much more press coverage over the Manhattan Beach store grand opening than it normally would have if the retailer had not taken the three month new store opening break from early April until yesterday, when the store opened, in Fresh & Easy Buzz's analysis.

There's a good marketing and PR lesson in that, which is: when the media gets too much of something, like a new store opening every two or three days, it tends to habituate to it and thus give it less coverage.

On the other hand, the press loves stories. And the opening of the first new store after a three month new store opening pause lends itself to story telling, although we must say if you look at much of the coverage its essentially amounts to the reprinting of Fresh & Easy's press releases with a few words changed around and perhaps an original headline added. Such is mainstream media economics today, especially in the daily newspaper business. Good job by the Los Angeles Times and a few other daily newspapers though. The LA Times' piece: Fresh & Easy sets up shop a few paces from rival Trader Joe's. [The writer also is a Fresh & Easy Buzz reader, which we don't hold against him.]

The Trader Joe's next door: The Fresh & Easy Buzz correspondent checked out the Trader Joe's grocery store, which is located just a hop, skip and a jump from the Manhattan Beach Fresh & Easy store in the Manhattan Beach shopping center, twice at different times yesterday. The Fresh & Easy is at 1700 Rosecrans and the Trader Joe's is at 1800 Rosecrans. Both stores even share the same parking lot. [Read our photo piece, "Manhattan Beach First Look: Fresh & Easy Buzz Has First Photos of First New Fresh & Easy Grocery Store Set to Open After the Three Month Pause," which discusses and depicts the proximity of the two stores in words and pictures.]

On both Trader Joe's store check instances, the correspondent said the TJ's was full of customers. Perhaps the Fresh & Easy grand opening had a spill-over effect for the TJ's: shoppers hit the grand opening, did some shopping, then also hit the Trader Joe's across the way. It will be interesting to observe over time how the two small-format grocers do respectively being so close to each other in the shopping center.

No comments: