Wednesday, July 23, 2008

Tesco's Fresh & Easy Creates and Launches an 'Affordable Gourmet' Meal-Centered Promotion: We Like it

Tesco's Fresh & Easy Neighborhood Market has created what Fresh & Easy Buzz thinks is a smart "affordable gourmet" meals promotion, creating a media tie-in with a recent survey conducted by the Nielson marketing research firm that found two-thirds of American consumers are reducing their discretionary spending, including eating out less and preparing more meals at home, due too the poor U.S. economy, and particularly because of the soaring cost of gasoline at the pump.

Fresh & Easy Neighborhood Market has created a meal-centered promotion which features seven quality but inexpensive dinners, made with items bought at the stores, for under $50.

The quality but bargain meal suggestions are designed to provide dinners for two for each night of the week for an entire week for under $50.

Below is the menu, including the prices for each dinner suggestion:

fresh&easy Boneless Beef Chuck Roast ($3.59/lb)
fresh&easy Mashed Potatoes ($2.49/17oz)
fresh&easy Cauliflower, Broccoli & Carrot Mix ($1.98/12oz)

fresh&easy Pork Potstickers (1.99/10oz)
fresh&easy Mango Chicken with Basmati Rice ($4.49/17oz)

fresh&easy Chicken Ravioli ($2.79/10oz)
fresh&easy Tomato Basil Marinara Sauce ($2.25/25oz)
fresh&easy Artisan French Loaf ($1.67/16oz)

fresh&easy Pork Baby Back Ribs ($4.79/lb)
fresh&easy Organic Baked Beans ($0.98/15oz)
fresh&easy Hickory Barbecue or Jalapeno Cheddar Kettle Chips ($0.89/5oz)

fresh&easy Chicken Thighs ($.89/lb)
fresh&easy Fajita Mix ($2.99/10oz)
fresh&easy Corn Tortillas ($1.54/36 count)
fresh&easy Spanish Rice ($1.99/16oz)

fresh&easy Carrot Ginger Soup ($2.99/20oz)
fresh&easy Beef Shepherd's Pie ($4.99/24oz)

fresh&easy Cage Free Large Brown or White Eggs ($2.28/dozen)
fresh&easy Hash Browns ($1.69/10 count)
fresh&easy Polish Kielbasa Sausage ($1.29/12oz)

We like the meal-centered promotion because it combines two consumer "hot buttons": eating well for cheap, combined with full meal or dinner suggestions.

Despite the down economy, consumers still want to eat quality foods. Most of the dinner ideas in the promotion pencil out to be less inexpensive than a far less tasty and less healthy trip for two to the fast food joint.

Additionally, since many consumers don't cook regularly, let alone plan meals, a meal-centered promotion like this one, which offers suggestions along with prices, makes it easier for novice cooks, who because of the poor economy are being forced to prepare food at home, to answer that daily question: "What's for dinner."

In addition to featuring the quality but value-priced week's worth of dinners in the promotion, Fresh & Easy also is tossing in a value wine suggestion, its $1.99 (in California; $2.99 in Nevada and Arizona) proprietary Big Kahuna store brand Cabernet Sauvignon and Chardonnay wines.

Fresh & Easy Buzz believes the "affordable gourmet" concept is a good one for food retailers to be using in the current down U.S. economy. Many consumers who don't normally cook are looking to do so as they can't afford to eat out at restaurants as frequently as they normally have been doing during better economic times.

Additionally, gourmet yet affordable meals are one of the few indulgences many people can enjoy in a poor economy. We call it the "Haagen-Dazs effect." Consumers might not be able to afford a vacation, a new car, or even new clothing--but they can often afford to spend a little bit extra money on ocassion for an affordable indulgence like Haagen-Dazs super premium ice cream rather than buying the cheaper stuff for half the price.

As such, we believe there's strong appeal to a promotion like Tesco Fresh & Easy's. It offers quality foods at affordable prices and bundles the promoted items into a meal suggestion format, creating an "idiot proof" guide to a week's worth of dinners for under $50.

Numerous U.S. retailers have and are doing similar "meal-centered" promotions. Historically such promotions have been very popular, even in good economic times because of the informational aspect of the promotion, in which the meals are put together for shoppers.

Right now, consumers across all income levels are looking for ways to save money, not only because of the soaring price of gasoline at the pump as the Nielson survey shows, but also because of the fast-rising cost of food at the supermarket.

Fresh & Easy Buzz thinks Tesco's Fresh & Easy Neighborhood Market has a winner with its new "affordable gourmet," meal-centered promotion.

If it does a similar promotion again, we suggest the retailer might want to think about creating a similar menu but for a family of say four, since it's families of about that size who are struggling even more than two-person (dinners for two) households with the current poor economy. Of course, we understand consumers can just double the promoted dinner items and price...but experience tells us few consumers will do that mentally.

It's a minor criticism though. And, unfortunately, since it looks like the poor U.S. economy--complete with soaring fuel and food prices--is going to be around for a while, Tesco's Fresh & Easy has plenty of time to do similar promotions for families of four, five, six and even more.

In fact, as we said earlier, meal-centered promotions like this one also are good when the economy is doing well because of the value of the serving-suggestion aspect of the promotion. Therefore it's a concept that can be used in both good and bad economic times, the price aspect merely being the independent variable.

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