Tuesday, February 24, 2009

The 'Mea Culpa' 'Mea Culpa' By Proxy With A Dash of Spin: Tesco's Fresh & Easy Now Says CEO Mason's 'We Got it Wrong' Comments 'Out Of Context'

The photograph above of Tesco Fresh & Easy Neighborhood Market CEO Tim Mason is from an exclusive interview piece the CEO did with the London Times, which was published on November 12, 2008, the same UK-based newspaper Tesco's Fresh & Easy says attributed or quoted comments made by the CEO "out of context" in the report its Sunday addition ran two days ago. You can read two pieces (November 12 and 16) we wrote about the interview here: Analysis: Hard Times at Fresh & Easy - Northern California Expansion to Be Postponed or Shelved Do to Economy; But its Only a Symptom Not the Cause and here: Tesco Fresh & Easy CEO Tim Mason Says He's 'Deliriously Happy' With the Chain's Progress Thus Far; We Prefer Andy Grove's 'Only the Paranoid Survive.' There's a link to the November 12 story in the Times at both of our links above. [Photo credit: Times of London.]

Analysis & Commentary

In this piece [A Healthy 'Mea Culpa': Tesco Fresh & Easy CEO Tim Mason Says 'We Got it Wrong;' Comments Tend to Agree With Fresh & Easy Buzz Analysis and Arguments] on Saturday, February 21, we wrote about a report in the Sunday Times of London in which Tesco Fresh & Easy Neighborhood Market CEO Tim Mason is attributed and quoted as saying the retailer got it wrong when it came to the research that formed the basis for what the Fresh & Easy format is and how the stores are merchandised and operated.

Since it has been our argument and offering (along with including positive suggestions) for over a year that Tesco did indeed "get it wrong" with its self-touted "extensive" and "in-depth" research -- which was too heavy on consumer focus groups and ethnographic research (researchers spent time in consumers' homes observing their food-related behaviors) and almost completely lacking in gaining an understanding of the food and grocery retailing business and market in California, Nevada and Arizona, in our analysis -- when we read the Sunday Times' story with the quotes and words attributed to Mr. Mason it made perfect sense to us that he would say what was attributed to him.

Upon reading the words attributed to CEO Mason, we said two things: "Good for him, he is now standing tall," and "It's about time" the grocer admitted what it knows to be the case regarding the research and the conclusions it drew from it, mainly that a major food retailing opportunity gap (the Fresh & Easy format) existed in the three markets that was just waiting to be filled.

No such major opportunity gap existed, in our analysis and in that of others who know the markets well. That doesn't mean Tesco shouldn't have launched Fresh & Easy. Just that the premise based on the research was faulty, in our analysis and opinion.

It is always better in business, politics and other related endeavors to define your problems rather than let others do it for you. This is what we felt CEO Mason achieved in the comments attributed to him in the Sunday Times' report. Experienced marketing and PR hands call this "hanging a lantern" on your problems. Once you define them for yourself it puts you more in the driver's seat. It also makes it easier to move forward on your own terms. It also feels good to do.

This morning however we were treated to an e-mail containing a story from the online version of the supermarket industry trade publication Supermarket News. That story, titled, "Fresh & Easy On Course, Company Says," contains what appears to our eyes, and experience, to be what we are referring to as the "'Mea Culpa,' 'Mea Culpa' by proxy." (See the title of our February 21 piece. Some might say it's even "spin."

The angle of the Supermarket News report is that Tesco Fresh & Easy CEO Tim Mason's comments in the Sunday Times' piece were "taken out of context," according to what the story reports Fresh & Easy Neighborhood Market's spokesman, Brendon Wonnacott, told the reporter.

We reprint the brief report from this morning's Supermarket News (in italics) below. Here is a link to the story as well.

Fresh & Easy On Course, Company Says
Feb 24, 2009

EL SEGUNDO, Calif. — Comments to the Sunday Times of London by the head of Fresh & Easy Neighborhood Stores here — to the effect that Tesco has been operating under mistaken assumptions in the U.S. — were taken out of context, a chain spokesman told SN yesterday.

“We’ve been very clear from the beginning that Fresh & Easy is continually evolving,” Brendan Wonnacott explained. “Making changes is something we’ve done from the start and will continue to do. That shouldn’t be surprising — that’s just being a good retailer.”

The newspaper had quoted Tim Mason, chief executive officer of Fresh & Easy, as saying, “We may have assumed certain elements of the Fresh & Easy brand would do the work for us, and we would not have to go down and dirty on price. That may have been a mistake.”

According to Wonnacott, “The economic environment has changed immensely over the past several months, [during which] we have heard consistently from our customers that they are more conscious of price, and like any good retailer, we are responding. We rearranged our flier a few months ago to highlight a few key products at great prices. We have simply turned up the volume on price communication so people know we offer high-quality products at great prices.”

Since the onset of the recession, for example, Fresh & Easy has launched a 98-cent produce pack that has helped increase produce sales by more than 11%, Wonnacott said; and it has continued to introduce more national-brand products in its stores and added larger sizes of detergents — all in response to customer requests for help stretching their budgets, he explained.

“We continue to evaluate different categories where we may complement the existing Fresh & Easy product range and help customers make their dollars go even further.”

All of what Mr. Wonnacott says -- the introduction of the value-based 98-cent produce packs (a value proposition we like because we've been suggesting for many months that value-based is where the grocer needs to move to and focus more on), adding more national brands (something we first suggested in early 2008) and the like are true -- and he says it well.

And since we weren't present when CEO Mason and the writer of the Sunday Times' piece talked, we have no idea if the words attributed to Tim Mason in the story were taken out of context. We should add that Tesco and Tesco Fresh & Easy often goes to the UK-based Times' when it has news to report on an exclusive basis. [See the photo caption with links at the top of this piece.]

In fact, in our February 21 piece we even used the word "healthy" to describe the words attributed in the Sunday Times' story to Mr. Mason, and to his showing in our opinion strong leadership ability in saying them, regarding Tesco Fresh & Easy's operating the Southern California-based 113-store small-format, convenience-oriented grocery and fresh foods Fresh & Easy chain under bad assumptions cleaned from the company's research.

After all, it is no secret to many that Mr. Mason and other Tesco Fresh & Easy executives, along with some of the top Tesco plc brass back home in the United Kingdom, have voiced concern and discussed at length the pre-Fresh & Easy launch research that formed the basis for the format and wondered how and why it was of less than top-flight quality.

And in standing tall and saying so in the Sunday Times' piece, Tim Mason showed the things of a leader -- the confidence to admit a mistake, a determination to correct it and move on once admitted, and a touch of humility backed up by a nice sash of resolve. (Note how much positive street credibility President Barack Obama has recently got for saying he got it wrong on a couple of key things so far in his Presidency.)

But now the spin. By having the Tesco Fresh & Easy Neighborhood Market corporate spokesperson "clarify" CEO Mason's comments to the Sunday Times' for its report -- adding nuonce and conflict to the reported statements and saying they were taken out of context -- it's our analysis and opinion that the company has now just added an unnecessary element to the reported statements. (We aren't putting down the corporate spokesperson for doing his job.

There was nothing wrong or negative about what Mr. Mason was reported to have said. In fact, it was refreshing and could have formed a great premise to go forward with the changes the CEO knows need to be made, and plans to make.

If the comments were taken out of context, the simple thing would have been to contact the Sunday Times' writer and express that viewpoint. We are rather sure he would have done a follow-up story, particularly since the UK-based newspaper writes about Tesco regularly.

Additionally, Tesco and Tesco's Fresh & Easy has chosen to go to the British papers rather than U.S-based papers whenever CEO Mason has specific (non press release) news he wants to put out publicly, so its not like there isn't precedent in terms of media relations with Tesco, Tesco's Fresh & Easy and the British mainstream press. CEO Mason is British after all, and was an executive at Tesco in the UK before coming to America to head-up Fresh & Easy. [See the photo caption and links at the top of this piece.]

Instead someone decided to do a little spinning to the Supermarket News' reporter, and he reported it like any good reporter should. But it's our analysis that this "clarification" from Fresh & Easy not only was unneeded, but now takes what was a story at the end of its news cycle and created a new news cycle for it.

Instead the company should have used CEO Mason's bold and leadership-oriented comments attributed to him in the Sunday Times' story as the basis of the changes it plans to make with Fresh & Easy. Such a headline would read: "Confident CEO admits mistakes, vows to build on those mistakes with changes designed to greatly improve Fresh & Easy."

But instead the impression left is: "What did CEO Mason really say?" "And why does a corporate spokesperson need to interpret and clarify what the company leader said?" In other words, they've gone and muddied the whole thing up in our analysis.

We don't think you would see this happening with Safeway Stores, Inc. CEO Steve Burd, or just retired Wal-Mart Stores, Inc. CEO Lee Scott, who remains chairman of Wal-Mart's board of directors, for example, to offer just two examples of industry CEO's. The reason is because doing so would diminish the perception of their leadership ability to all stakeholders -- investors, employees, suppliers, industry peers and others.

It's key for stakeholders to clearly understand that when the person at the top is speaking out, he is doing so for himself and the company. And that if he or she feels something they said to a reporter was taken out of context, then they say so and describe what and how in their own words rather than via proxy.

As a result, Mr. Mason now needs to step back in and talk to the reporter who wrote the piece in the Sunday Times so that he clarify in what ways he believes his comments were taken out of context in the piece.

If not, the Tesco plc and Tesco Fresh & Easy stakeholders are left confusion -- with what to us were healthy, leadership-oriented made comments by the Tesco Fresh & Easy CEO in the Sunday Times' story, but which now today have been amended by the company spokesperson in the Supermarket News report, including suggesting the Sunday Times' writer took Mr. Mason's comments out of context, leaving confusion as to what was said, as well as to who is running the shop over in El Segundo.

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