Sunday, August 17, 2008

UK Telegraph Newspaper Reporter Visits the Manhattan Beach Fresh & Easy Grocery Store: Observes and Writes About What He Sees

The photograph above of the Fresh & Easy Neighborhood Market store at 1700 Rosecrans in Manhattan Beach, California was taken by Fresh & Easy Buzz roving photographer Reno Tom from in front of the Trader Joe's grocery store just across the parking lot. The two competing small-format grocery stores are as close as they appear in the photograph. You can click on the photo to enlarge it.

From the Fresh & Easy Buzz Editor's Desk: For many months now we've been writing about how [Tesco's] Fresh & Easy Neighborhood Market USA's small-format, convenience-oriented grocery stores in Southern California, Nevada and Arizona lack a sense of place, warmth, a feeling of retail excitement, localization, and a few other similar in-store characteristics that are crucial for any large-scale food and grocery retailing chain, especially a start up one, to succeed in the United States--and particularly in California where multi-format food retailing is extensive and highly competitive. We've also offered numerous positive suggestions for Tesco on how it can improve on this condition with its Fresh & Easy grocery stores.

We've based our analysis of the the 10,000 -to- 13,000 square foot combination basic grocery and fresh foods Fresh & Easy grocery markets' design and merchandising on numerous field visits to multiple stores in all three states. We've spent considerable time in multiple stores in the way an ethnographer spends time studying and learning about a foreign culture. In other words, we take a very thoughtful and methodological approach.

We've also interviewed hundreds of shoppers outside the Fresh & Easy stores since December, 2007, along with reading nearly every online review about the Fresh & Easy grocery markets on Internet review sites such as,, and a couple others. And, of course, we've received feedback from scores of Fresh & Easy Buzz readers on the stores.

We haven't interviewed shoppers in-person and read hundreds of online reviews because we've questioned our own observational analysis of the overall lack of a sense of place and retail excitement in and of the Fresh & Easy stores, but rather because like a good ethnographer we've also wanted to learn as much as we can about what others, particularly consumers, think of the store designs, how they feel shopping in them, and other key variables.

We've suggested strongly to members of the consumer press, who unlike members of the Fresh & Easy Buzz team haven't spent many years in the food and grocery industry, that the best way to analyze Tesco's Fresh & Easy stores is to get out and spent time in them observing and talking to shoppers. A few business reporters for newspapers located in Southern California, Metro Las Vegas Nevada and in Arizona have done just this, and have written some very informative and insightful stories about the Fresh & Easy stores.

However, the British press, which we understand has certain geographical constraints including having to cross the Atlantic Ocean in order to tour a Fresh & Easy store, hasn't in the main written much of anything about its hometown Tesco and its Fresh & Easy Neighborhood Market USA food retailing venture in America based on actually visiting, spending time in, observing and talking to shoppers in the Fresh & Easy stores. Field work.

That's why we were pleased to see an article in today's UK Sunday Telegraph by writer James Quinn in which he recently visited the Tesco Fresh & Easy grocery store in Manhattan Beach, California and reports on what he observed, including conversations he had with customers in the store.

We're even further pleased that Mr. Quinn visited the Trader Joe's (at 1800 Rosecrans) across the parking lot from the Manhattan Beach Fresh & Easy store at 1700 Rosecrans, which we were the first to report Fresh & Easy would become a neighbor of when it opened its store there on July 2, and writes about his observations of that store, comparing what he observed at the Trader Joe's to what he observed at the Fresh & Easy across the way.

Additionally, we're glad Mr. Quinn extended his field work to include a visit to the nearby Bristol Farms specialty supermarket, the name of which was inspired by Britain if you didn't know, and compares and contrasts his observations of the store to his observations and analysis of the Manhattan Beach Fresh & Easy market at 1700 Rosecrans.

There are numerous qualitative differences between food and grocery retailing in the United Kingdom and the United States, and even many significant differences on a regional basis in the United States, as we often point out in Fresh & Easy Buzz.

That's why adding local design elements and merchandising is such an important part of being a successful food retailer in America, as we've written about in relation to the fact that Tesco needs to localize certain design and merchandising aspects of its Fresh & Easy grocery stores to the communities and neighborhoods where they are located.

Although the British press has covered Tesco's Fresh & Easy Neighborhood Market USA extensively, there have been few and far between reports and stories based on a reporter actually visiting one or more Fresh & Easy grocery stores and observing and analyzing what they've found.

We aren't really faulting the UK press on this as much as we are merely stating an observable fact.

Like its U.S. counterpart newspapers, which have few UK-based correspondents, the British papers also have few U.S-based reporters. This is largely for economic reasons. The newspaper industry is struggling financially on both sides of the pond these days. Those in-country-based reporters the major British newspapers do have are kept busy in the main covering international affairs and U.S. politics from Washington and corporate America from Wall Street, along with a bit of Silicon Valley--and of course Hollywood.

Therefore, we're pleased to read Mr. Quinn's story based on his visits to the Manhattan Beach Fresh & Easy store, the Trader Joe's across the parking lot, and the nearby Bristol Farms specialty supermarket. It's arguably the most insightful piece we've yet to read in any UK newspaper on the realities Tesco faces competing with food and grocery retailers in the U.S. states of California, Nevada and Arizona. And that's no accident since there's often no substitute for field work when attempting to explain food retailing and retailers.

Below is the story from today's edition of the Telegraph:

Fresh & Easy at risk of going stale
Tesco's chain faces serious obstacles in its bid to crack California. James Quinn checks out the reasons why

For Jan Perry, the recent ground-breaking at a near-barren construction site in the depressed southside area of Los Angeles was a turning point. After years of campaigning in her role as an LA councilwoman, fresh food was finally coming to the area, in the form of Tesco's Fresh & Easy, the British retailer's US convenience store venture.

"Having Tesco come along was a great opportunity," admits Perry. "Here in south LA, we have a plethora of liquor stores and fast-food restaurants, but what's frustrating is that the need is there for fresh produce and yet we haven't been able to get our own domestic grocery chains into the area."

A recent study showed that $400m a year leaks out of the area as residents go in search of fresh food, groceries and entertainment, and Perry estimates that 45pc of the area's 900 restaurants serve some form of fast food. "It will be very interesting to see if people will gravitate towards it," she says of the new store, which will open early next year.

Her positive perspective is everything that Tesco wanted to achieve when it launched F&E in southern California, Nevada and Arizona to much fanfare last autumn.

The new venture promised affordable, fresh produce for local communities, providing decent jobs and strong integration into local communities.

The business, run by Tesco's former marketing director Tim Mason, has now grown to 71 stores, with a move into northern California - taking in San Francisco and the Bay Area - planned early next year.

But not everyone sees F&E in such a positive light. The Los Angeles Alliance for a New Economy is suspicious of F&E's practices.

The Alliance, a citywide coalition of church, community and other interested groups, is concerned, among other things, about the impact stores such as F&E have on the city.

"When Tesco first came to America, we were pleasantly surprised. They were saying they wanted to do things differently," says Elliott Petty, the alliance's senior retail analyst from his office in downtown LA. "But, today, almost a year later, we've found they're a lot like others in the industry, opening stores in the exact same locations, neglecting others."

Petty rejects F&E's move to the southside of LA, saying the store is in an area going through "revitalisation with condos and lofts and a bunch of high-end developments".

"They didn't show up in the heart of south-central," he points out, suggesting that Tesco is favouring only wealthy communities.

An F&E spokesman rejects this claim, pointing out that as well as its southside store, it recently opened a store in LA's Compton, which has one of the highest murder rates in the whole of the US.

Petty is also dismissive of the company's pay incentives and opportunities for career progression - likening F&E to that pariah of the socially responsible, Wal-Mart.

"We want them to engage in the community, and talk to us," he pleads, saying the alliance has requested discussions on various occasions.

F&E has given no reason as to why the retailer doesn't seem able to speak to the alliance, but nevertheless rejects its claims.

"We have developed a very competitive pay and benefits package for all of our employees," the spokesman says, pointing out that more than 50pc of employees already live within four miles of their store, and stressing the retailer's career progression policies.

Unconvinced, Petty says the company's lack of willingness to talk to his or other community groups creates a potentially harmful "cloud of suspicion".

The store visits

A few miles to the south and the west of Petty's office, in a tranquil area on the edge of the mid-market Manhattan Beach, lies an F&E store that boasted the retailer's largest launch to date - with almost 2,600 customers on its first day - when it opened in early July.

But on the mid-week morning when I arrive, all is quiet. The 2,000 sq ft store (see editor's note below), very similar in feel to a large Tesco Express, does not look busy. At the back of the store is what is heralded by my F&E guide as the heart of the store - the "Kitchen Table", essentially a demonstration area run by a member of staff who chooses what items to display.

It's a nice idea, but far from original, as can be seen across the car park at rival retailer Trader Joe's whose "Snack Shack" concept looks very similar.

As we wander further around the store, in spite of the clearly fresh produce, it feels a little cold - and not just in temperature - despite a recent revamp by F&E.

There are nice, localised features - a small, child-height poster encourages youngsters to locate a hidden cuddly toy within the store in return for a prize - but they are few and far between. By and large, this is very much a store that has been designed to be rolled out, rather than one designed to entice customers.

At Trader Joe's the opposite is true. With a strong smell of cooking out front - coming from some beef being grilled at the Snack Shack - the shop is positively buzzing with customers. Gregarious staff chat away in a relaxed environment designed with a tropical surf shack in mind.

It's then that it becomes clear: the cheery staff-led atmosphere is what's missing in F&E. Because F&E's tills are entirely self check-out, there is little interaction between the retailer and the customer. Given the outgoing nature of most Americans - and in particular Californians - F&E might have just missed the point.

One block away, at larger rival Bristol Farms, a woman offering free samples of the latest oxygenated water pounces almost before customers get through the doors.

Although it's much larger than F&E it also has much more to offer shoppers. Like the nearby Whole Foods, which is just a two-minute drive away, it offers seating for people to eat their purchases from the deli, creating a sense of belonging to the shop that F&E does not.

By now it's lunchtime, which should be good news for F&E and its three neighbouring retailers.

As the other supermarkets fill up, I grab some food from a small Chinese eatery and, as I wait, I count the number of customers eating at outside tables: 32.

Keen to see how F&E is coping with the lunchtime rush, I wander back to the store to count the customers: 32.

Given this is a busy area with thousands of office workers within five minutes' driving distance of the shop, that seems incredibly low.

"This is a great store," says an elderly female customer who approaches me. "The problem is that around here - with all the competition - I'm just not sure if it's going to take off."

Fresh and Easy? Fresh, certainly, when it comes to its produce. But judging by my experience in Manhattan Beach, Tesco's dream of offering West Coast America something it didn't already have may not prove to be quite as easy as it first thought.

Fresh & Easy Buzz Editor's Note: In the above UK Telegraph story, the Manhattan Beach Fresh & Easy store is mentioned as being 2,000 square feet. That's a typographical or other error. The store actually is 13,000 -to- 14,000 square feet, approximately the same size as the Trader Joe's grocery store across the parking lot.

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