Wednesday, September 24, 2008

Breaking News: Wal-Mart to Open its Four Marketside Food and Grocery Markets in the Phoeniz, AZ Metropolitan Region on October 4

As we've been reporting on Fresh & Easy Buzz for months, Wal-Mart, Inc. has planned an early Fall, 2008 opening of its small-format, combination grocery and in-store fresh, prepared foods Marketside stores in the Phoenix, Arizona Metropolitan region.

Wal-Mart has now announced and confirmed on its website the specific date the four Marketside grocery markets will open in the Phoenix Metropolitan region cities of Gilbert, Mesa, Chandler and Tempe.

All four Marketside stores are set to Open on Saturday, October 4, just 11 days from today, according to the announcement on the Marketside website. [Click here to see the announcement (look in the right corner) on the website. Click here for maps showing the location of each store in the four Arizona cities.

Wal-Mart is planning to hold grand opening day celebrations at each of the four Marketside stores -- which as we've previously reported don't use the Wal-Mart name on them just as Tesco does not use its corporate name on its small-format Fresh & Easy stores -- according to a spokesperson at Marketside's corporate office in Tempe, Arizona, where one of the four stores is located.

Earlier this year Wal-Mart set up a separate office in Tempe, Arizona where it will run operations and related functions for Marketside. The retailer has been using the office in Tempe to interview corporate and store-level employees to work for Marketside.

Workers and vendors are still busy today getting the four Marketside stores ready to open on October 4, according to a Fresh & Easy Buzz correspondent who visited two of the store sites -- in Gilbert and Mesa -- today.

Additionally, a vendor who has been doing business with Wal-Mart's Marketside said their was much activity at the Tempe location yesterday.

Also, Mike Thomas, who is the store manager of the Marketside store in Chandler, reports activity is frenetic at his store in preparation for the October 4 opening.

Thomas also confirms something we've been writing about Wal-Mart's Marketside stores since we first reported on the development when Fresh & Easy Buzz was started in December, 2007. That is that the Marketside stores will offer basic groceries and its other goods at affordable and even discount prices.

There's been much talk in various publications that Marketside would be "upscale" both in look and price. based on our source information all along we've disagreed with that assessment.

Instead, we've suggested Wal-Mart plans to not only offer up-market products like in-store, fresh, prepared foods and specialty items in the Marketside stores -- along with a limited assortment of basic grocery items -- but plans to do so at affordable prices. This strategy has only gotten stronger at Wal-Mart since the U.S. economy has continued to worsen and food price inflation has continued to soar.

"Our pricing is going to be very competitive and accessible to everybody," Chandler Marketside store manager Mike Thomas says.

Thomas adds that Wal-Mart's message with Marketside, which we've reported before in Fresh & Easy Buzz, is an answer to the question "What's For Dinner." His answer to that question: "We're providing a meal solution for people on the go, people who want something that's convenient, fresh and affordable," adding he believes shoppers will like how "What's For Dinner" is priced at the Marketside stores. We will find out if that's the case in 11 days.

Wal-Mart is playing up this particular theme with signs it has on the windows of the four Marketside stores set to open on October 4. The signs announce the store openings on that date, along with having additional illustrated signage depicting a table place-setting with the text: "Marketside: Recommended by food critics and financial planners. Come shop with us," The "food critic" message on the sighns is the culinary message, the "financial planners" message being the value proposition to go along with it in terms of marketing.

As we've previously reported, all four of the Arizona Marketside stores, which average 15,000 -to- 20,000 square feet, are located in buildings which housed former drug stores. That's the model Tesco has used for many of its current 83 Fresh & Easy Neighborhood Market grocery stores.

Tesco's Fresh & Easy markets, which average 10,000 -to- 13,000 square feet, offer a limited assortment of basic grocery products (about 65% under its fresh & easy brand and the remaining 35% (give or take a few percentage point either way) being national and regional brands), fresh produce, meat and bakery goods, craft beers and specialty wines, a small assortment of non-foods, and a significant selection of fresh, prepared foods.

The Marketside stores essentially offer a similar assortment of products in a slightly bigger store -- 15,000 -to- 20,000 square feet for Marketside vs. 10,000 -to- 13,000 for Fresh & Easy.

A key merchandising element of both Tesco's Fresh & Easy and Wal-Mart's Marketside is a substantial offering of fresh, prepared foods.

The Marketside stores will differ in the category however. Fresh & Easy makes all of the ready-to-eat and ready-to-heat prepared foods items at a central kitchen at its distribution center in Riverside County, (Southern) California and then delivers the products to the stores in Southern California, Nevada (Las Vegas Metro area) and Arizona (Phoenix Metro region).

Wal-Mart's Marketside stores on the other hand will make the fresh, prepared foods right in-store. Each store has a kitchen in it, along with a small "eat-in" area that can seat about 9 -to- 10 customers at any given time. Like Fresh & Easy though, the major thrust of Marketside's prepared foods merchandising will be "to go" sales to shoppers.

Wal-Mart believes the Marketside in-store prepared foods offering -- including having a kitchen right in the store, along with the eating area -- gives the stores a significant point of differentiation vis-a-vis Tesco's Fresh & Easy, along with helping to create more of a culinary, fresh food-oriented image for the chain as part of answering that "What's For Dinner" question it's using in Marketside's positioning.

David Wild, who headed the Marketside format development team as the mega-retailer's former director of new business development, told us this while he was still with the company, saying he felt it's a key point of differentiation for Marketside. Wild left his position with Wal-Mart earlier this year to accept the job of CEO of Helfords, the United Kingdom's leading automotive parts and bicycle-making company.

Wal-Mart Marketside also has been conducted consumer "taste-test" panels of its fresh, prepared foods offerings in Arizona for a number of months now, using the data to refine its in-store prepared foods, along with using the information from the particiapants as a guide in pricing the various items.

We will be able to observe if this indeed is a point of differentiation for Marketside over Fresh & Easy beginning on October 4.

Tesco has Fresh & Easy markets in all four of the Arizona cities -- Gilbert, Mesa, Chandler and Tempe -- where Wal-Mart will open its Marketside stores on October 4.

Additionally, Wal-Mart has located each of those four Marketside stores, in each of the cities, within 1 -to- 2 miles from a Fresh & Easy small-format grocery store. Wal-Mart also has Supercenters, Sam's Club stores and Wal-Mart Neighborhood Market (40,000 -to- 45,000 square feet) supermarkets all over the region.

With the close proximity of the Marketside and Fresh & Easy stores in those four cities, the similarities in merchandising and product offerings of both formats, along with the resources of both Wal-Mart (number one global retailer) and Tesco (number three global retailer), beginning in 11 days small-format food and grocery retailing is going to get even more interesting than it already is in the Phoenix, Arizona Metropolitan market. Stay tuned.

No comments: