Friday, October 17, 2008

Friday Free-For-All: News and Views About Tesco's Fresh & Easy Neighborhood Market and Tesco PLC

Good, cheap canvas shopping bags

On Thursday, October 17, Tesco's Fresh & Easy Neighborhood Market added an inexpensive 99-cent reusable canvas shopping bag to the selection of reusable shopping totes it offers for sale in its stores.

The new 99-cent reusable canvas bag (pictured at left) is made with 100% unbleached cotton, carries a simple design of the Fresh & Easy logo, and can hold up to 100 pounds, according to Tesco Fresh & Easy marketing director Simon Uwins.

Fresh & Easy stores already sell what the retailer calls a "bag for life" which they will replace for free if it is ever torn or damaged. The bag is made out of a plastic-like synthetic material and sells for just 20-cents each.

Uwins says the the grocery chain plans to introduce two new reusable carrier bags by the end of the year. One is a reusable canvas wine carrier bag that holds up to 7 bottles. It will sell for $1.99 and should be available in the stores in mid-November, he says. The second reusable bag, a reusable canvas shopping tote made out of organic material, will sell for $2.99 and will be offered in the stores in mid-December, according to Uwins.

We think offering the inexpensive 99-cent canvas shopping bag is a good idea. A number of other retailers like the Rite Aid drug store chain and the Raley's supermarket chain in Northern California have been offering 99-cent or dollar canvas bags for sometime now. Wal-Mart also just recently introduced a one dollar reusable canvas-style bag.

Raley's even distributed thousands of its 99-cent bags for free in its 129 stores when it introduced the inexpensive reusable totes last year.

The attractive yet inexpensive bags offer shoppers a low-priced way to bring their own bags (BYOB) to the store and help cut down on the waste from single-use plastic carrier bags and paper grocery sacks. In particular is reducing the volume of single-use plastic carrier bags given out at supermarkets and other retail stores, since unlike paper bags their isn't a comprehensive recycling structure such as curbside recycling in place in the U.S.

Introducing the 99-cent canvas bags is even more important for Tesco's Fresh & Easy to do since the retailer only offers free single-use plastic carrier bags in it stores and not the paper grocery sack option as nearly 100% of supermarkets in the U.S. do.

The more inexpensive reusable bag options consumers are given, the fewer excuses they have to not bring their own bags to the grocery store.

Let the sunshine in

Tesco's Fresh & Easy Neighborhood Market says the massive solar panel array on the roof of its huge 850,000 square foot distribution center in Riverside, (Southern) California is currently producing about 75% of the center's energy needs.

Achieving a 75% solar energy production rate is very impressive, as well as being among the highest of any distribution center we are aware of in the United States.

In fact, very few supermarket companies or wholesale grocers even have solar systems and rooftop solar panel arrays on their facilities. Very few retail distribution facilities of any format do in the U.S. actually.

Wal-Mart and the department store chain Macy's are two large retailers that are aggressively putting solar power systems on their numerous distribution centers. Both retailers have already put solar systems and panels on the roofs of or next to a number of their respective distribution centers in California and Hawaii, with more installations planned.

The solar installations at the Wal-Mart and Macy's distribution centers thus far provide about 30-50% of the total energy use of the respective facilities. Therefore, that the solar power system at the Fresh & Easy distribution center in Riverside County is providing 75% of the facilities energy needs is a considerable achievement compared to what others are currently doing.

The solar panels at the Fresh & Easy distribution center cover 500,000 square feet, which is about the size of five football fields.

The company says the installation cost $13 million.

Since March, the solar panels have provided over 2,100 MWh of energy -- enough energy to power over 300 typical homes, 4200 televisions or 10,000 light bulbs for a year, Tesco's Fresh & Easy says.

Tesco Fresh & Easy Neighborhood Market has a live feed on its Web site where you can view the output (how much energy is coming from the solar panels) of the solar power system at the Riverside County distribution center in real time. Just click the link to go to that page on the Web site:

Fresh & Easy new store news

Fontana, Southern California: Tesco opened a new Fresh & Easy store on October 9 in the Southern California city of Fontana. Along with the local residents who attended the groand opening there was a group of protesters there from the United Food & Commercial Workers union. The local paper, the Fontana Herald News, covered the grand opening. You can read the report here.

Temecula, Southern California: The planning commission in this Southern California city heard an application on Wednesday night from Tesco's Fresh & Easy, which is proposing to build its second store at a site in the city. The first Fresh & Easy store in Temecula hasn't opened yet but is expected to do so soon.

The second Temecula Fresh & Easy store would be built on the south side of Rancho California Road, west of Cosmic Drive in the city, according to the planning commission.

The commission in March approved plans for a Fresh & Easy Market at Margarita and De Portola roads. Matt Peters, a planner with the city, said that project is under construction and the application for the second project was received in May.

The plan for the new Fresh & Easy market heard at the commission's hearing on Wednesday night calls for locating the store on a 2.47 acre parcel in the city, adjacent to two other approved projects: a Rite-Aid Pharmacy and a 160-unit apartment complex.

An issue at the hearing was Tesco's application for a beer and wine permit for the store. The planning commission said it had no objection to that because it doesn't feel their is an over concentration of stores that sell liquor, beer and wine in the neighborhood. The proposed Rite Aid store has applied with the state of California for both a spirits/hard liquor license and a beer and wine permit for the store next to the proposed Fresh & Easy unit in Temecula.

Temecula is in Riverside County in Southern California which is where Tesco Fresh & Easy Neighborhood Market's 850,000 square foot distribution center is located.

One year (store) birthdays

The very first batch of Tesco's Fresh & Easy small-format, convenience-oriented grocery and fresh foods stores officially opened in November, 2007. We say "officially" because the first Fresh & Easy market located in Hemet in Southern California actually opened about two weeks early in late October. In fact, it will have been open one year next week.

November is just a couple weeks away, which means one year birthdays for those first Fresh & Easy stores.

One of those stores, the Fresh & Easy at Foothill and Second Street in the Southern California city of Arcadia is planning a one year anniversary party on November 12.

According to store manager Tammy Goddard, the Arcadia Fresh & Easy will be celebrating in a variety of ways at the store on November 12. She says customers and others are invited to the birthday party at which the store "will have some special promotions, sample a few customer favorites, and give away reusable canvas bags on the first day (while supplies last) as part of its one year anniversary."

[Since Fresh & Easy Buzz has been suggesting since early this year that Fresh & Easy hold free reusable bag giveaway days since it only offers only free plastic bags in its stores and not the paper option, we're pleased a reusable bag giveaway -- the first we've heard about -- is being included in the one year birthday party at the Foothill & 2nd Arcadia store.]

"We are so grateful to our customers for a fantastic first year. We are starting to change the way people shop," says Fresh & Easy Arcadia store manager Tammy Goddard. "We couldn't have accomplished so much in one year without everyone's support and we look forward to being a part of the neighborhood for many years to come.”

The store also will make a $1,000 donation to a local charity in celebration of being open in the city for one year, she says. When the store opened last year it made a $1,000 donation to a local non-profit group, the Foothill Unity Center. Store manager Goodard says residents of Arcadia can submit the name of a local charity group for consideration of the awarding of the $1,000 donation at They have until October 24 to do so.

Tesco PLC News & Views

Cook it like Beckham: United Kingdom-based Tesco, which is the world's third-largest retailer, the leading retailer in the UK, and owns and operates Fresh & Easy Neighborhood Market in the U.S., is teaming up with famous British football (soccer for the yanks) star David Beckham to introduce a line of frozen, prepared foods Beckham has created in partnership with a company called G03. The frozen foods line will be launched in Tesco stores in the UK.

you can read about the development here: Beckham launches food range. Here: NOSH ’N’ BECKS. And here: How David Beckham might look as Captain Birds Eye. You might also enjoy the UK Web site's take on David Beckham's entry into the food business. Click here: DAVID BECKHAM: VICTORIA’S GREAT WITH MINCEMEAT.

Of course Beckham and his famous wife Victoria (Posh Spice) Beckham now live in sunny California where Mr. Beckham received a multi-million dollar contract to play U.S. professional soccer. The Beckhams live in Southern California's Beverly Hills/Brentwood area.

The big question is: Since Fresh & Easy is owned by Tesco, and Tesco is launching Beckham's frozen, prepared meals range in the UK, and Beckham like Tesco is a product of the UK with a U.S. outpost (Beckham still has a home in Britain, Fresh & Easy is Tesco's U.S. outpost), will Tesco's Fresh & Easy USA sell David Beckham's prepared meals in its stores?

Since half of the Fresh & Easy stores are in Southern California where the Beckhams live and receive lots of media attention, it might not be a bad idea to sell a few of the froaen meal items in the region's Fresh & Easy stores. Of course, we would make a condition of doing so that the Spice Girls would have to do in-store samplings.

Additionally, Fresh & Easy Buzz's Promotional Pundit, who tipped us off to the story, says he thinks a Fresh & Easy store appearance or two or three by David Beckham would likely generate lots of foot traffic for those stores, especially of the high heeled variety.

Tesco cuts petrol costs...finally: In the UK Tesco sells petrol (gasoline) just as many supermarket chains in the U.S. do. Britain's Prime Minister (PM) Gordon Brown, who under former PM Tony Blair was the nation's Treasury Minister among other things, has grabbed the UK's financial crisis by the horns and among other actions is calling on the country's businesses to help out. It's being said by numerous observers that the UK financial crisis and the rapid and comprehensive way Brown is responding to it could ironically save Brown's leadership, which prior to the crisis was falling by the wayside.

One of the things PM Brown has done is to aggressively call on the UK's petrol retailers to cut the price of gasoline as a way to help the economy and Britain's cash-strapped citizens. Many have been doing just that, including Tesco. Tesco originally was reluctant to cut prices as low as Brown has been calling for. But the giant retailer now has. But after all of its competitors already did so. You can read about it here: Tesco cut petrol to below £1.

Wal-Mart-owned Asda, along with Sainsbury's and Morrisons, in the UK cut its petrol prices in line with what PM Brown has been asking some time ago. Asda is the number two chain in the UK after Tesco, followed by Sainsbury's and Morrisons. However, Tesco was a holdout -- until now. On October 16 Brown threatened an inquiry unless all of the nation's petrol-sellers lower prices in the wake of the tumbling price of oil: Cut your petrol prices or face an inquiry, Brown tells fuel giants.

The UK press has been tough on Tesco for being a laggard rather than a leader in this effort. For example, read the piece from The Sun here: Greedy fuels. Also from This is Money UK: Tesco drops fuel price. Both those pieces were published shortly before Tesco announced it would join all of the other retailers in lowering the price of petrol. Also read about the fury over the high fuel prices in this piece: Forecourt fury as petrol prices stay high.

Lower food prices too: UK PM Brown also is after the nation's food and grocery chains to lower their prices on food and grocery items. We told you he was going full bore in his efforts. Brown also believes the current oil slump with slash food costs in the UK. And yesterday he promised Britain's struggling families those prices would come tumbling down. Read about it here: Brown: Oil slump will slash food bills.

UK basic food prices up: Brown's calls for reduced food prices in the nation can't come too soon for some. The most recent data shows the prices on basic food and grocery items in the UK have increased in the current quarter by 14pc. Read more here: Basic food prices 'up by 14pc'.

Tesco is by far the leading seller of food and groceries in the UK with a 31% share of the market. Number two Asda follows with 17%. Number three Sainsbury's has a share of about 15% and number four Morrisons about 12%.

Since Tesco has a greater market share than the number two and three UK chains combined, it tends to come under the most intense scrutiny by the government and media in terms of the price of basic food products in the nation. Look for that scrutiny to intensify as the economy gets worse, especially if food price inflation continues at current levels.

Sister act at Tesco: Tesco Workers 'Similarity'. When Debbie Day and Marilyn Morris shared a coffee and a chat during their working day at a Tesco store in the UK, they remarked on how much they looked like each other. Here's why: Tesco workpals for 30 years were lost sisters. Read more: Friends find out they are sisters. BBC News: Friends discover they are sisters.

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