Saturday, March 7, 2009

Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track


First in a Series. Today: Tesco's Fresh & Easy's - Retail Operations

Fresh & Easy Buzz has been writing of late about and offering analysis on the change in positioning by Tesco's Fresh & Easy Neighborhood Market to a more "value-based" retail positioning model, which is something we've been saying for over a year that the grocery chain needs to do. [March 2, 2009: Fresh & Easy Buzz Redux: Much of the Value Proposition-Based Analysis and Suggestions We've Been Offering Now Being Adopted By Tesco's Fresh & Easy.]

However, we've always stressed a "value proposition," which is far more than just getting "down and dirty" on price, as Tesco Fresh & Easy CEO Tim Mason put it in a recent interview in the Sunday London Times. [February 26, 2009: Tesco Fresh & Easy, Research and Course Correction: What 'Was' Said and 'its' Context Matters Little; What 'Is' Matters Much, What's Done Matters More.] Although, in the current super-competitive aand recessionary food retailing climate in California, Nevada and Arizona, where Tesco's Fresh & Easy Neighborhood Market has its current 115 stores, getting "down and dirty" with low everyday prices and hot and deep promotional price offerings is a must -- regardless of what any other analyst might tell you.

Safeway is doing it. Kroger as well. Ditto on Supervalu.

Add Wal-Mart and basically all the other grocery chains to that list in these respective markets, as well as throughout most of the United States. Right now, "all grocers are discounters" in their own ways. Even Whole Foods Market, the natural-organic and premium grocer, is putting value above all else in its merchandising, marketing-promotions and operations right now. [August 4, 2008: The Value Proposition: Whole Foods Market's New Focus on 'Value' Demonstrates the Importance of the Value Proposition Currently in U.S. Food Retailing.]

But mere hot promotional pricing and advertising does not value make alone. That's something all grocer's need to keep top-of-mind, and most all successful ones do. [June 18, 2008: Tesco's Fresh & Easy and it's 'Value Proposition:' We Asked, They Answered; Discussion, Deconstruction and Fresh & Easy Buzz Analysis.]

Additionally, as we've detailed in Fresh & Easy Buzz for over a year, the problems Tesco has and is having with its small-format, convenience-oriented, combination grocery and fresh foods Fresh & Easy chain are far from exclusively price and promotional pricing-based. They involve other merchandising, marketing and retail operational omissions, mistakes and failures, which we've outlined in the Blog since December, 2007.

These problems, a theme we've been in the forefront of offering analysis and suggestions on regarding Tesco's Fresh & Easy, stem in our analysis from a failure to understand that food and grocery retailing in the U.S. (and in California, Nevada and Arizona) is a regional, sub-regional, sub-sub-regional and local business. [November 24, 2008: A Single Bird in the Ad (Even Wrapped in Bacon and Sage) Does Not Make For A Good Thanksgiving Promotion For A Neighborhood Grocer For 'Everybody.']

Like former Democratic Speaker of the House Thomas "Tip" O'Neill was famous for saying about politics, that "All politics is local," so to is it the case that "All food and grocery retailing in the U.S. must be locally-based," reflecting the unique democraphics, culture, history and local consumer behavior in the regions, sub-regions, sub-sub regions and neighborhoods where a retailer's stores are located.

This doesn't mean all U.S. food retailing is or should be done by locally-based independents. No indeed. What it means is that those chains that are successful in the U.S. generally put a serious and considerable focus on local and neighborhood merchandising and marketing in each of the market regions where they operate stores.

It's also why food retailing in the U.S. is, by-and-large, a regional business, with regional chains being the market share leaders in most regions of the country. Examples include Stater Bros in Southern California's Inland Empire region, Bashas in Arizona, and Save Mart and Raley's in Northern California. Each of these privately-held, regional chains is the number one, two or three market share leader in its respective regional and local markets. In fact, the only one of the four that isn't the market share leader in its respective market is bashas in Arizona. All do $3 billion-plus a year in sales. Save Mart does about $6.5 billion annually with about 230 stores.
It's also why the big chains like Kroger Co., Safeway Stores, Inc. and Supervalu operate multiple supermarket banners. Each of these three chains became semi-national food retailers not by organic growth, but rather through acquisitions of leading regional supermarket chains, nearly all of which were privately-held and built up by the local families or business people that owned them. And it is this local banner policy that helps them to be the market share leaders in the parts of the U.S. where they hold that status.

In Southern California, for example, that includes the number one and two market share leaders, Safeway Stores, Inc. and Kroger Co. Safeway-owned Vons was a privately held chain in Southern California before Safeway acquired it. Ralphs also was a privately-held chain, which was acquired by Southern California-basedsupermarket investor Ron Burkle's Yucaipa Companies in the 1980's, then acquired from Burkle by Kroger Co. in the 1990's.

The stength of the Vons' and Ralphs brands goes back to their privately-held, regional supermarket status, a status the owners of each of the chain's built by focusing on the local in Southern California. Safeway and Kroger realized this, which is why they never changed the names of the respective chains to "Safeway" or "Kroger."

Lastly, the local nature of food and grocery retailing also explains why multi and single-store independents are such a powerful and successful retailing force in the business in the U.S. It also expalins why, despite the long time and ongoing threat to independents from the mega-chains, the independent grocer sector continues to survive and even thrive. It's all about thinking and acting local in significant measure.

It's been our analysis for well over a year that unless and until Tesco realizes this fact about U.S. food and grocery retailing -- the regional, sub-regional, sub-sub-region and local nature of the business -- it will continue to miss the mark on creating a successful Fresh & Easy Neighborhood Market chain.

Ironically the word "neighborhood" is in the chain's name. But Tesco has yet to put the "neighborhood" in Fresh & Easy Neighborhood Market in terms of understanding and then acting on, with its merchandising, marketing and operations, the local natural of food and grocery retailing in America. [April 3, 2008: Our 'Fresh & Easy Stores' Lack A Sense of Place' Theory is Growing; Read What We and Others Are Saying Tesco Needs to Do With Fresh & Easy.] [October 8, 2008: Putting the 'Neighborhood' in Neighborhood Market: 'Localism' and Tesco's Proposed Fresh & Easy Neighborhood Market in Sacramento's Oak Park.]

*****************
Over the next few weeks, Fresh & Easy Buzz will be offering analysis of the current state of Tesco's Fresh & Easy Neighborhood Market in five key areas: (1) retail merchandising (today's focus) (2) merchandising, (3) marketing-promotions, (4) format, and (5) store location strategy, along with offering suggestions for changes the grocer should make, in our analysis, going forward in each of these respective areas, combining them all into a whole.

Nearly all of these suggestions we write about today and will write about in the upcoming stories are ones we've made in one form or another for about a year. We will add some new suggestions in the upcoming pieces.

Today, we focus on the retail operations area in the piece below:

As we mentioned earlier in this piece, Tesco needs to make many more changes -- all then tied into a comprehensive, defined Fresh & Easy format, with a clear and solid merchandising, marketing and operations strategy, which is then communicated to consumers in a comprehensive manner -- rather than merely getting "down on dirty" on its promotional pricing, which is something though it does need to do right now, but is only one tactic in what needs to become an overall strategy.

The most basic, needed and logical "no brainer" changes Tesco should make -- and can make rapidly -- are in its retail store operations policy and practice.

Below are seven retail operations changes, which we first offered about a year ago and have continued to regularly write about, that Tesco should make.

The changes were important for Tesco to have made (which it didn't) in the non-recessionary period in which we first made them over a year ago. They are even more important now, in the current and likely to last for probably all of 2009 and 2010, economic recession

The Seven retail operations changes Tesco's Fresh & Easy needs to make:

1. Accept WIC Vouchers (Women's, Children's & Infants Program) issued by the U.S. government to the poorest of poor mothers. [September 7, 2008: Analysis & Commentary: Should Tesco's Fresh & Easy Put An Asterisk Next to its Motto? Yes; Unless it Corrects Four Operational Omissions.]

The U.S. government issues WIC Vouchers, which come in a paper form that looks similar to a check, to the poorest of poor mothers so they are able to purchase infant formula, whole milk, cereals and related nutritious and healthy-oriented foods and beverages for their infants and toddlers, as well as for themselves. The federal government is in the process of expanding the varieties of healthy foods mothers can buy with the vouchers. Some of the new categories will include more fresh produce and additional whole grain cereals and breads.

Tesco's Fresh & Easy stores do not accept the WIC vouchers from poor mothers. What a mistake. By not accepting the vouchers, the grocer excludes an entire group of potential customers. These potential customers also tend to purchase other food and grocery items with food stamps and cash at stores that accept the WIC vouchers.

In the current recession, distribution of the WIC vouchers has and is dramatically increasing. Additionally, the $787 billion economic stimulus bill recently signed by the President allocates additional funds for WIC because of the increased demand for the assistance, including from many mothers not previously needing WIC.

All of Fresh & Easy's major (and most minor) competitors accept WIC. So should Tesco's Fresh & Easy. Why turn down a potenital sale, after all? Particularly for a grocer that needs such sales. Lastly, accepting the WIC vouchers is the right think to do for Tesco from a social responsibility standpoint. WIC is a part of the relationship between the U.S supermarket industry, the federal government and American citizens -- part of the socioeconomic compact.[December 29, 2008: Tesco's Fresh & Easy, 'Food Deserts' and WIC Vouchers; A 'Year-End' Analysis & Commentary.]

2. Accept manufacturer's "cents off" item coupons. Fresh & Easy stores don't accept the the popular coupons issued by food, grocery and consumer packaged goods manufacturers and marketers, which allow consumers to receive anywhere from a 25-cent to a $1 disount (and at times buy-on-get-one-free and other offerings) on food, grocery and related items. [December 12, 2008: Marketing & Promotions Report: Manufacturers' Coupons Becoming the 'New Black;' Use Among Consumers Soaring; Marketers Distributing More Than Before.]

All of the grocer's competitors accept them. Many like Kroger-owned Fry's (Arizona) and Albertson's (Southern California, Arizona) even promote acceptance of the coupons aggressively, by regularlydoubling and even tripling the manufacturer's coupons in special promotions.

Consumers are using the manufacturers' "cents off" coupons, and shopping at stores that accept the coupons, in greater volume than at anytime in recent history. Manufacturers'-marketers are distributing the coupons in greater volume today than they have been doing for many years -- if not in history.

Can Tesco's Fresh & Easy really afford to exclude coupon-clipping shoppers, and their dollars, from its customer mix? We think not, particularly since the use of the coupons is so fast- growing in the recession. But even in a non-recession accepting the manufacturers' coupons is a "no-brainer."

Some might argue that since about 60% of the items sold in Fresh & Easy stores are under its store brand, that taking the coupons doesn't make since. We beg to differ. That leaves a potential universe of 40% of the items sold in the stores available for manufacturers' "cents off" coupon shoppers. Again, a "no brainer."

3. Accept paper, personal checks. It's near-impossible to find a major supermarket or grocery store in California, Nevada and Arizona (or elsewhere in the U.S.) that doesn't accept paper, personal checks. Tesco's Fresh & Easy doesn't accept them; only cash, debit cards and credit cards.

Many supermarkets would love to stop taking paper, personal checks. But they don't, and won't anytime in the near-future.

Why? A couple reasons:

>Too many consumers in the 55-plus age bracket still prefer using paper checks to using cash, debit cards or credit cards to pay for their groceries.

>Additionally, the U.S. supermarket business is all about creating options. The industry has become successful in large part by increasingly offering shoppers multiple options to pay for their grocery purchases. That's why the industry finally began taking credit cards in the 1980's after holding out on doing so for many years after they were introduced.

And in the current recession, more and more consumers are going back to paying for their food and grocery purchases with paper. personal checks for two reasons:

>It allows them to better control the amount of money they spend at the supermarket. It's just too easy to add an extra $20 (or more) on that debit card, as we all know.

> In the case of credit cards, many consumers have maxed-out their credit limits. Many consumers also have had their credit limits reduced by banks because of the credit crisis.

>Lastly, consumers are getting smart. They know that paying for essentials like food and groceries with a credit card is a prescription for even more debt than they already have. Therefore many have stopped using the plastic at the supermarket. The savings rate in the U.S. is also up, another indication that American consumers are using their credit cards less. Additionally, retailers like Wal-Mart, Target and a few others have recently reported shoppers using credit cards far less in their stores, particularly for essential food and grocery items.

By not taking paper, personal checks, Tesco's Fresh & Easy is excluding potential customers who prefer this method of payment.

The food retailing business is not one in which you can force consumers to use payment methods that the retailer prefers. Rather, it's all about offering a wide-variety of payment options so as to draw shoppers to your stores.

Can Tesco's Fresh & Easy really afford to say to consumers who prefer using paper, personal checks "no thanks, we don't accept them"? We think not. But the grocer's competitors love it.

4. Cash payroll and government-issued checks. Wal-Mart, Safeway (Vons and Safeway banners in California, Nevada and Arizona), Kroger (Ralphs, Fry's, Smiths), Supervalu (Albertsons), Bashas and nearly every other food and grocery retailer in California, Nevada and Arizona, cash shoppers' payroll checks -- and even encourage the practice. Tesco's Fresh & Easy doesn't.

Why do these grocery chains cash payroll checks? Because it brings added business to a store, and thus to a grocery chain's overall sales numbers.

Wal-Mart even lowered the amount of money it charges to cash payroll and government (Social Security, SSI, Veterans, Unemployment, Welfare) checks to $4 last year, regardless of the check amount, as way to encourage consumers to bring their checks to a Wal-Mart store and cash them. Prior to that change in 2008, the greater the value of the check, the more Wal-Mart charged to cash it.

But, Tesco's Fresh & Easy does not cash payroll or government-issued checks, as a matter of the company's retail operations policy.

Unemployment is unfortunately booming in the U.S., particularly in California (over 10% for February), Nevada and Arizona, which are among the hardest three states hit by the housing foreclosure mess, the financial crisis and the recession in general.

Tens of thousands of new people are going on unemployment in the three states each month.

Many people receiving unemployment checks cash them at the supermarket -- just like many people do with their other government-issues checks, as well as payroll checks -- and then buy their groceries at the store after cashing the checks. Kroger and Safeway owned stores even in most cases cash the checks for free with a minimum purchase.

None of these thousands of consumers are cashing their payroll or government-issues checks at Tesco Fresh & Easy stores, and then buying groceries with the cash though, since the grocer does not cash such checks.

This pleases Wal-Mart, Safeway, Kroger, Supervalu, Bashas, ect. though. They love the added business that cashing payroll and government-issued checks bring their respective stores.

5. Add two full-service checkout lanes in each Fresh & Easy store.The Fresh & Easy stores offer only self-service checkout in which shoppers must scan and bag their own grocery orders. Store clerks then collect the customer's cash or process her debit or credit card transaction. In other words, the clerks still have to make change for cash purchases or process the card transactions.

If asked the store clerks also will (cheerfully) assist shoppers with checkout. But anyone who has any experience in the U.S. food retailing business knows customers hate asking such things, particularly since they get full service, in many cases including carryout service to their cars, at stores that offer as good or better prices than Tesco's Fresh & Easy stores do.

Tesco said their "research" showed shoppers would love this self-service model. A few do. But a "few" shoppers that love a particular feature like forced self-checkout don't make a successful grocery chain. [May 20, 2008: Take One Dose of 'Internal Research', Add An 'Independent' Survey From An Unnamed Source, and You Get A Consumer Preference For Self-Service Checkout.]

Most shoppers don't like a self-service-only forced choice by a retailer though. And many who tried it once or twice, according to our research, have never set foot in a Fresh & Easy store again. This is particularly the case with consumers in the 55-plus age bracket -- you know, the ones who have the most income and wealth in the U.S. and just happen to be the fastest-growing demographic.

Tesco should add two full-service checkout lanes in each of its Fresh & Easy stores. This would be smart in that it would welcome all those shoppers who hate the self-service-only system. Doing so creates "choice" rather than trying to force "choice" with self-service-only checkout. Ask you local consumer researcher if "choice" is a key element of American consumers. Yes, yes and yes, it is.

Additionally, adding the two full-serve checkout would also create a larger potential customer base for the Fresh & Easy stores, since self-checkout-only is a barrier to entry for many shoppers from the start. Why exclude?

At the same time, adding the two full-service checkout lanes would still allow Tesco's Fresh & Easy to keep a partial self-service checkout system, preserving for the most part its cost-cutting model. Of course, if the full-service lanes prove much more popular than the self-service, then we would think additional conversions would be warranted. There's only one way to find out -- convert two of the existing self-service checkout lanes to full-service.

Adding these two full-service lanes would also provide a simple operational system for accepting items number one, two and three in our list -- the paper WIC vouchers, paper manufacturers' "cents off" coupons, paper, personal checks and payroll and government-issues checks.

For example, all Fresh & Easy needs to do is put signage in the front-end checkout area of the stores that lets shoppers know in advance of checking out that if they are using the WIC vouchers, paper manufacturers' coupons or paper personal, payroll or government checks (or any combination of paper methods of payment and coupons) that they should then go to one of the two full-service checkout lanes.

If this proves to create too much traffic in those two lanes, then it isn't difficult to also accept the paper methods of payment at the self-serve checkout lanes. We probably would create a system to do both. But that's a simple logistic task that doesn't take much to implement. [July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.]

6. Add paper grocery sacks to the stores rather than offering only free single-use plastic bags, the "Bags for Life," which are reusable, synthetic bags sold for 20-cents each, and the more expensive canvas reusable bags (which start at 99-cents each).

This is all about offering customer choice.

Many consumers hate the single-use plastic bags. That's why nearly 100% of all U.S. grocers offer the "paper or plastic option."

Additionally, even though we like the 20-cent each reusable "Bags for Life," the fact is many shoppers just don't want to pay 20-cents for a bag, or two or three or four, so they go by default with taking the free plastic single-use carrier bags at Fresh & Easy. But many of these shoppers would go for paper if it were available.

Fresh & Easy should add the paper carrier bag option, even if it has to charge 10-15-cents per bag for it.

We wouldn't charge for the paper bags unless we also charged for the single-use plastic carrier bags though. The reason being that charging for one suggests favoring plastic over paper. That's a bad message to send.

Instead, if the grocer has to charge, which is what small-format, hard-disount grocery chain Aldi does, for example, then charge 10-cents each for both paper and plastic -- or offer both for free. Then give each shopper 5 cents back for every paper bag they bring back to the store, like many other grocers do. Also continue to push the reusable bags.

We favor the promotion of all kinds of reusable carrier bags, and Fresh & Easy is doing a good job at it, offering a range of bags from 20-cents each (the "Bags for Life), to 99-cents (an inexpensive cotton carrier bag) on up. But that fact is consumers aren't yet taking reusable bags to the store in any significant numbers. Therefore, offering both the paper and plastic option remains a smart thing for any competitive food and grocery retailer to do. [August 13, 2008: Tesco to Offer Shoppers Free Plastic Bags in UK Stores Only if Requested; Still Offering Plastic Bags-Only in Fresh & Easy USA Stores; No Paper Option.] [Click here for more posts on the subject.]

7. Add small, "neighborhood" customer assistance and service kiosks to each Fresh & Easy store.

Like the other six operational changes suggested above, this also is one we first suggested about a year ago. It's really more of an operational addition rather than a change though.

It also serves an additional, overall positioning purpose for Tesco's Fresh & Easy in that it helps put the "neighborhood" in Fresh & Easy Neighborhood Market.

We suggest that in each Fresh & Easy store Tesco install a small kiosk type area in the front-end of the store. This kiosk would be staffed by a store clerk. The kiosk would be used as a "neigborhood" and store informational center. Neighborhood groups could have the store distribute their information at the kiosk. The store could also distribute coupons and other information at the kiosk, like its literature and related materials for its store charity prograsm and "shop for schools."

The kiosk also could be used to pre-approve paper, person checks and either to pre-approve or even cash payroll and government-issued checks. That way time would be saved by shoppers and store clerks at checkout.

Additionally, Tesco's Fresh & Easy could use the "neighborhood" store kiosks to sell a selected variety of products, both for store sales as well as community and neighborhood assistance.

On the community-neighborhood side of the equation, sales could include things like bus and other mass-transit passes, tickets to local events and fund-raisers, along with related communitiy-based products. (We don't mean consumer packaged goods by products. BUt rather the type of things we describe.)

In terms of products for added store sales, items could include: pre-paid cell phones and phone cards, local area maps, Fresh & Easy gift cards, Fresh & Easy coupon books (a new creation) and other, similar products that could evolve over time.

These store "neighborhood" kiosks, which would be small and take up very little floor space, serve multiple purposes.

First, they assist with the check cashing process, as mentioned above. Additionally, they allow Fresh & Easy stores to add some incremental sales by selling the types of products mentioned. Further, they offer an added customer service element to the stores, and to the neighborhoods, and from a longer term positioning standpoint. Lastly, they help to better communicate what Tesco says is a central position of the Fresh & Easy format, which is to be the "neighborhood grocery store."

Safeway Stores operates similar customer service centers at the front-end of most of its stores, for example. Customers love it and it works out very well for store operations.

Adding the "neighborhood" service kiosks in the Fresh & Easy stores also would help add a better "sense of place" to the stores, something that we've been saying for over a year in our analysis is much needed. Remeber, the whole is more than the sum of its parts in food retailing.

Conclusion

Tesco's retail operations policy is a top-down, command-and-control-style model.

The policy says to shoppers: We want you to shop at our Fresh & Easy markets as long as you are willing to" pay with cash, debit and credit card only; aren't a poor mother who needs to use WIC coupons to feed her kids; are willing to not use manufacturers' "cents off" coupons to save on your grocery bill; are willing to scan and bag your own grocery order; and a will accept single-use plastic bags only, or pay for your own bag, but not be offered paper bags, even if that is your preference.

That's a mouthful.

On the other hand, all of Tesco Fresh & Easy's competitors say in their policies, which are bottom-up (choice) rather than top-down policies: We invite you to shop at our stores by offering you as many ways of paying for your grocery purchases as we can think of offering -- cash, paper checks, cashing payroll checks, credit cards, debit cards.

Their policies also say: We also invite you to use manufacturers' coupons to save money on your total grocery bill. We provide full checkout service (and in a few cases offer the option of self-checkout along with it). We offer you a choice of paper or plastic bags (and in many cases will carry the groceries out to your car), along with selling a variety of reusable bags. And we invite poor mothers to use their WIC vouchers in our stores. Your money is as good as anybody elses. And we treat you fairly.

Compare and contrast the two retail operations strategies and policies -- Tesco Fresh & Easy's and all the others. Which one seems like it would induce the greatest number of potential consumers to shop in a grocery chain's stores?

American consumers love choice and options. For that matter, even former Sovet Block nation consumers in Eastern Europe like and demand more choice than the Tesco Fresh & Easy command and control retail operations policy provides, despite having lived under command and control economies until recent times.

One of the positioning elements of the Tesco Fresh & Easy stores is that they are "for everybody." The grocer says the stores are for all consumers; that they are neighborhood markets where Tesco wants people to do the majority of their grocery shopping at. That's the positioning.

But how can a retailer say it's stores are for "everybody," all consumers, when its retail operations policy excludes so many by limiting choice? The answer is, it can't.

There's a major disconnect between what Tesco says is the positioning of the Fresh & Easy stores and what's its retail operations policy is. By making the changes we offer, the grocery chain can go a very long ways towards making a better connection between what it wants the Fresh & Easy stores to be and what its operations strategy and policy has created.

Food and grocery retailing is a wholistic and comprehensive process and strategy. You can't just tinker with one element of merchandising or marketing, for example, if their are problems, and expect doing so to solve those problems.

This gets us back to the value proposition concept and practive. Tesco Fresh & Easy Neighborhood Market CEO has indicated the grocery chain has discovered it needs to compete better on promotional pricing, as well as adopting some elements of what we've been saying it needs to do in terms of the value proposition. But remember, value isn't just hot pricing.

Because of its consumer-limiting retail operations strategy, policy and practice, it's our analysis that what Fresh & Easy could likely end up doing, unless it makes the changes we suggest and creates a pro-customer-choice environment for its stores, is that by offering the hot promotional prices it has started offering (which we agree with as part of a wholistic strategy), is to create a class of "cherry-picking" shoppers, who just shop the stores for the promoteddeals, then go elsewhere to one (or more) of Fresh & Easy's competitors to buy the rest of their food and groceries.

The reason behind this is because many shoppers will shop a store if it has a few deals with prices so hot they just can't pass them up. But they won't spend much time in that store, and spend money on other items that are more profitable for the retailer, if that particular retailer has created a retail operations policy and practice that so limits customer choice that it alientates shoppers, which we argue Tesco has done with its command and control policy at Fresh & Easy.

The whole -- retail operations, merchandising, marketing -- after all, is much greater than the sum of its parts -- offer hot promotional deals and all will be solve -- in food and grocery retailing.

Making the seven simple retail operations changes we detailed above, as we've argued for some time now, will also add sales to Fresh & Easy, along with opening up a much larger potential customer base for the stores than currently exists.

Adding sales, creating more customers -- isn't that what it's all about? Indeed it is. It's a "no brainer."

4 comments:

Ben-Arizona said...

I didn't know Fresh & Easy doesn't accept the WIC vouchers. That's outrageous.

They seem to want to be a grocery store and competitor to supermarkets but yet have adopted the operations policies of a convenience store chain like 7-Eleven.

Makes very little logical sense to do so.

Anonymous said...

I stopped shopping at Fresh & Easy completely after two initial trips because of the self-serve checkout. It's actually slower than full-serve because many customers take forever to scan and bag. If they offered a full-serve option I would shop the stores again on a semi-regular basis. And I hate plastic bags. Would even pay a dime for paper.

birddogs said...

I love F&E--the size allows me to browse without taking all of my time. (I'm a label reader.) While I agree that they should accept WIC, I disagree about manufacturer's coupons. I find that many people spend a lot of time clipping and not so much using, and many tend to buy things they would not otherwise buy, so coupons tend to be less economical than implied. I REALLY like the F&E coupons because you can use them no matter what you buy. Albertson's did that for a while too and I loved it.

I strongly disagree about the self serve. Americans are not healthy and should really take the opportunity to do any semi-physical activity for themselves that they can. I ONLY shop at grocery stores with self-serve, even when I am stocking up. The article says that you have to be helped with cash or cards but I have not found that to be the case when I use a card. The only complaint I have when checking out is that you can't get cash back and you can't turn off the conveyor belt, which would be helpful if you bag as you scan.

I take a box full of bags and really don't understand why more stores aren't putting their boxes by the registers (Costco style) for people to use instead of bags. In fact, rather than selling paper or plastic bags, when are we going to find a way to use crates or some kind of reusable sustainable box? Maybe this could be done with a deposit system like the big water bottles.

While I don't like all their products, I find that I return for the ones I love. However, I still go to other stores for certain things. I don't think they can change the store to change that fact. I would not like to see cafes and check cashing, etc. Just keep it fresh, relatively inexpensive, and try to improve the nutritional values on the prepared foods.

Let's Recycle! said...

I am a former employee off Fresh & Easy; good luck in getting the 'head in the sand' management to implement any of your great ideas. Won't accept checks because they do not want to pay a check acceptance company. No good on the kiosk, would take away from employee time to stock shelves, and somehow control waste and tossing out of code items. Which brings up a good point, always check date codes. Adding more personnel to the front end would cost to much money, and according to upper management, make the checkout lines less efficient. I know, sounds backwards. Then the employees get dinged if there are not, well let's just say the stores are more or less "Catch-22's". Upper management is more interested in the way the cans are on the shelf than making sure the amount of stock is correct for the store size; overstuffed stock rooms are the norm with Fresh & Easy.

It is a nice place to shop, good prices, and generally clean. After 2 1/2 years they are still searching for their niche, I guess it is out there somewhere.

Ford