Sunday, February 28, 2010

Walmart Launching New Value-Added Pre-Packaged Fresh Produce Line Under its Marketside Fresh Foods Brand

Fresh Foods Merchandising: Value-Added Produce Category

Walmart Stores, Inc. is introducing an extensive new line of value-added fresh, bagged and pre-packaged produce items under its Marketside fresh foods brand, Fresh & Easy Buzz has learned.
Thus far, the line includes 17 SKUs in the following categories: Fresh, bagged or pre-packaged spinach greens, salad mixes and lettuce, value-added fresh veggies, and a fresh salsa item.

All of the value-added fresh produce items come in either clear bags or plastic packages/tubs. Below are the 17 new Marketside value-added fresh produce items, detailed under the four categories we've created and grouped them under:

Spinach Greens

>Marketside Fresh Spinach, 10 oz
>Marketside Organic Baby Spinach, 10 oz
>Marketside Organic Baby Spinach, 5 oz

Microwave In-Bag Value-Added Veggies

>Marketside Broccoli Cauliflower, 12 oz
>Marketside Broccoli Florets, 12 oz
>Marketside Broccoli/Cauliflower/Carrots Vegetable Medley, 12 oz
>Marketside Snow Peas, 8 oz
>Marketside Sugar Snap Peas, 8 oz

Salad Mix, Salads & Lettuce

>Marketside Classic Iceberg Salad, 12 oz
>Marketside Classic Iceberg Salad, 24 oz
>Marketside Classic Iceberg Salad, 6 oz
>Marketside Shredded Iceberg Lettuce, 8 oz
>Marketside Broccoli Slaw, 12 oz
>Marketside Organic Herb Mix, 5 oz
>Marketside Organic Spring Mix, 10 oz
>Marketside Organic Spring Mix, 5 oz

Fresh Salsa Mix

>Marketside Mild Pico De Gallo, 10 oz

Five of the 17 bagged and pre-packaged fresh produce items are organic, as you can see in the above list.

Walmart is launching its new Marketside value-added, bagged and packaged fresh produce items in selected Supercenters and Neighborhood Market supermarkets.
Some of the 17 items have been sold at Walmart's four small-format 'marketside by Walmart' fresh food and grocery stores in Metropolitan Phoenix. Those stores opened in May 2008.

Earlier today we reported on and detailed that Walmart is introducing a new line of pre-packaged, ready-to-heat fresh, prepared entrees and soups under its Marketside store brand. [February 28, 2010 Walmart Introducing New Ready-To-Heat Prepared Entrees, Fresh Soups Under its Marketside Brand] The two new lines follow Walmart's introduction last year of its Marketside take-and-bake pizza line.

The extension of store brand Marketside to the new pre-packaged, value-added fresh produce line shows Walmart plans to use Marketside as a complete fresh foods store brand, including fresh produce - and other types of fresh foods - under the brand, along with the fresh, prepared foods line.

Interestingly, the new Marketside value-added fresh produce line includes not only the upscale, specialty items like the fancy and organic greens, but also more basic items like the iceberg lettuce and fresh vegetables.

For those who haven't thought Walmart isn't planning to exploit "Fresh," this new development, along with the Marketside fresh, prepared foods line extension, should offer a change of mind.

Additionally, Walmart will be rolling out additional fresh foods items under its Marketside store brand. Stay tuned.

Walmart Introducing New Ready-To-Heat Prepared Entrees, Fresh Soups Under its Marketside Brand

Fresh, Prepared Foods Merchandising

Walmart Stores, Inc. is adding additional fresh, prepared foods items to its Marketside fresh foods store brand, as we predicted it would in this January 9, 2010 piece: Walmart's 'marketside': What's 'In-Store' for 2010?

First, Walmart is introducing a new line of Marketside family-size, ready-to-heat prepared entrees. Fresh & Easy Buzz has located two items/SKUs in the new prepared entree line thus far: Marketside Macaroni & Cheese With Bacon, in a 3 pound package, and Baked Rigatoni with Italian Sausage, in a 46 ounce package. (The Rigatoni With Sausage entree is pictured above; the Mac and Cheese With Bacon is at the top.)

Additionally, Walmart has introduced a new line of ready-to-heat, refrigerated fresh soups (pictured above) under its Marketside brand.

The Marketside entrees and soups are similar to those marketed by Safeway (Signature Cafe store brand), Tesco's Fresh & Easy Neighborhood Market (fresh & easy brand) and a number of other U.S. food retailers. But the expansion by Walmart is significant from a competitive standpoint because the mega-retailer has thousands of U.S. stores in which it can sell the growing marketside fresh, prepared foods line

Walmart is in the process of launching the new Marketside fresh, prepared entree line and the fresh soup line in selected Supercenters and Neighborhood Market Supermarkets.

There will be additional items/varieties in the prepared entree line coming out soon, according to our sources and research.

The Marketside entrees and soups were originally created for Walmart's four small-format 'marketside by Walmart' fresh food and grocery stores located in the Metropolitan Phoenix, Arizona region, where the ready-to-heat fresh foods have been sold since the four stores opened in May 2008.

As we've reported and written about extensively, Walmart is using the 'marketside' stores as a laboratory for the development of its brand Marketside fresh foods program.

Walmart introduced its first Marketside branded fresh, prepared food item, a line of take-and-bake pizzas, to selected Supercenters and Neighborhood Market supermarkets last year. The pizzas were also developed at and are sold at the four Phoenix Metro region 'marketside by Walmart' stores.

Fresh & Easy Buzz reported in this December 21, 2009 piece - Wither Walmart's Small-Format 'marketside' Stores and Format? - that Walmart had replaced the Web site for its small-format 'marketside by Walmart' fresh food and grocery stores with a single page describing its new Marketside line of fresh foods.

We said this development signaled that Walmart was putting its primary emphasis regarding brand Marketside on the new fresh foods line rather than on additional 'marketside by Walmart' stores., which remains the case.

In our January 9, 2010 piece [Walmart's 'marketside': What's 'In-Store' for 2010?] we made three predictions about Walmart's brand Marketside for 2010.

One of those predictions was that Walmart would soon be rolling out additional fresh, prepared foods items under its Marketside store brand.

Here's what we said (in italics below) in prediction two of the three:

"Walmart will introduce a few additional packaged fresh, prepared foods items (SKUs) under its 'marketside' brand in some of its Supercenters, discount format stores and Neighborhood Market supermarkets in 2010, following up on the 'marketside' prepared, take-and-bake pizza.

Look for some or all of these prepared foods items in 2010: 'marketside' ready-to-heat fresh soups in containers and ready-to-eat packaged salads. Plus 'marketside' ready-to-heat prepared entrees in varieties like macaroni & cheese, meatloaf and pot roast, for starters."

Walmart is doing just what we predicted it would.

Walmart will be launching additional fresh, prepared - and other fresh foods - under its Marketside store brand this year.

Stay tuned.

[Click here and here for a selection of past posts in Fresh & Easy Buzz about Walmart's 'marketside' retail format and stores.]

[Editor's Note: In the past, Walmart used all lower-case letters for 'marketside.' It still uses lower-case for its 'marketside by Walmart' stores. However, Walmart is using Marketside (with a capital M) for its Marketside store brand. Therefore, we will follow this convention.]

Thursday, February 25, 2010

Safeway CEO Steve Burd Says Fresh, Prepared Foods Sales at $100 Million Annually

Fresh, Prepared Foods Merchandising

Safeway Stores, Inc.'s fresh, prepared foods category is currently doing about $100 million in annual sales in the food retailer's 1,730 supermarkets in the U.S. and Canada, CEO Steve Burd said today during a conference call with analysts.

The conference call today was part of Safeway's reporting of its fourth quarter 2009 earnings. Safeway reported a loss of $1.6 billion for the fourth quarter of 2009, largely on a charge taken for a decrease in the value of its Vons chain (something to watch closely) in Southern California and its Eastern Division chains. Sales for the quarter were down 8.1% over the previous year's quarter. Same-store sales also dropped. You can read the complete details here.

The fresh, prepared foods category at Safeway includes ready-to-eat and ready-to-heat items like entrees, side dishes, pizzas, sandwiches and related items all primarily under the grocer's Signature Cafe store brand, but doesn't include the deli category, which would make the annual sales figure much higher that the $100 million.

In response to this question (in italics) [One category I am interested in, around the trends you are seeing say to the fourth quarter and into the current period. What do prepared foods look like and what kind of price points are people drifting towards?] from analyst Chuck Cerankosky of Northcoast Research, Burd said (in italics):

"Our prepared foods business has actually really done well for us this year. If you go back I think it probably was two investment conferences ago, we actually served a number of our prepared meals to everybody at the investor conference. And at that time we were pretty excited about it and had it in only a sampling at stores.

We struggled to really make that a profitable business because we had relatively short shelf life and we had a lot of shrink. And at that time we probably had a lot of SKU’s. So that business has been completely reengineered giving us extended shelf life without sacrificing quality.

And in that business today we’ve gone from zero to more than $100 million in sales in a relatively short period of time. And so, in terms of overall price point, I’m not sure if those price points have materially changed. We have certain on tray items that are actually designed to feed as many as four people and others design to feed as little as one.

And so the price points can be quite varied. But I think that the vision that we had a couple of years ago has finally been realized and that business is growing nicely."

Although CEO Burd didn't have much to say regarding the price point part of the question, Safeway has been heavily promoting its ready-to-eat and ready-to-heat fresh, prepared foods since about October 2009, according to Fresh & Easy Buzz research and analysis.

For example, we've documented that since that time to this week, Safeway has promoted its Signature Cafe store brand packaged ready-to-heat entrees and side dishes in its weekly advertising circular nearly every week.

The entrees are ad-priced at $3.99 each; the side-dishes at $2.99 each.

Additionally, about once every other week since November 2009, Safeway adds an additional promotional offering on the entrees and sides: If customers buy any combination of three of the entrees and side dishes using their Safeway Club Card, they get an additional $1 off per item, bringing the sale price on the entrees to $2.99 each and $1.99 each on the side dishes.

Further, each week Safeway runs a hot buy of $5 on a fully-prepared family size center-of-the-plate meat item that feeds 3-4 people. Those items include boneless turkey breast, whole roasted chicken, fried chicken, St. Louis Style Smokehouse Ribs and a couple additional offerings. Each of the about five items are rotated in the ad weekly. For example, this week's offering is either a 24oz (for 3-4 people) Signature Cafe Roasted Turkey Breast or Turkey Pot Roast for $5

The grocery chain also frequently does the same thing with a family-sized non-meat entree, such as a pasta meal. In this week's advertising circular Safeway is offering a number of varieties of 32.5-38.5 ounce ready-to-heat Signature Cafe Pasta Meals at $8.99 each. The pasta meals are very similar to those sold at Tesco's Fresh & Easy stores.

As part of its heavy promotion of fresh, prepared foods, Safeway also has been offering weekly one or two ready-to-eat hot or cold sandwiches at price points of $3.99 and $4.99, depending on the variety and size of the sandwich. This week it has a new item for $3.99 - a BBQ Tri-Tip sandwich on a french roll.

The grocer also offers additional prepared food items like its Signature Cafe Take-and-Bake Pizzas and other ready-to-eat and ready-to-heat items regularly in the ads.

At least one Signature Cafe ready-to-eat salad item is run bi-weekly and often weekly in the advertising circular. And in the fall and winter Safeway has been running its Signature Cafe prepared soups on ad about twice a month.

Lastly, Safeway has been frequently offering various prepared foods full meal-deals like the chicken, side dish and rolls promotion for $9.99 pictured at left. Safeway partners with a vendor, in this case King's Hawaiian Bread, for these promotions. The vendors offer promotional monies which Safeway then puts into the promotional discounts on its prepared foods items.

On average, Safeway runs about 8-10 prepared foods items in the ad circular each week.

So as you can see, in terms of price points, Safeway is focusing on some strong fresh, prepared foods category promotion as a way to keep retail prices at the lower-end on a variety of items on a regular basis. The best evidence of this is its near-weekly promotion and advertising of the Signature Cafe packaged entrees and side dishes.

From a merchandising and marketing perspective this makes sense because in the recession shoppers aren't willing to pay much of a premium for prepared foods. However, priced right, considerably below restaurant take-out for example, prepared foods sales at supermarkets can be brisk.

Safeway continues to develop new packaged and bulk ready-to-eat and ready-to-heat fresh, prepared foods items and add the new SKUs in its stores.

Unlike Tesco's fresh & easy, Safeway merchandises fresh, prepared foods in both packaged and bulk/deli style forms.

As we first wrote about in early 2008 here and here, Safeway Stores, Inc. owns a restaurant in Redwood City, California named Citrine, which the grocery chain uses as its fresh, prepared foods research and development lab.

Safeway doesn't own Citrine, which it opened in 2007, because it wants to be a player in the restaurant business. The restaurant's chefs develop recipes, get feedback from restaurant patrons, and then Safeway turns the recipes into prepared foods items to be sold in its supermarkets.

We recently were told by a source at Safeway in a position to know that the retailer is currently working on a number of new fresh, prepared foods items to go under its Signature Cafe brand. The primary focus of the new prepared foods items in development is value - larger family-sizes of high-quality but at affordable price points - the source tells Fresh & Easy Buzz.

Safeway Stores, Inc. is the fifth-largest food and grocery retailer in the United States. Walmart Stores, Inc. is number one, Costco Wholesale is ranked second, followed by Kroger Co. and Supervalu, Inc.

Wednesday, February 24, 2010

Fresh & Easy Store Opens its Doors in South Los Angeles

United Kingdom-based Tesco opened its long-awaited Fresh & Easy Neighborhood Market grocery store today in the Central & Adams neighborhood in South Los Angeles.

South Los Angeles, like many lower-income neighborhoods in the United States, is underserved by grocery stores that offer a decent selection of fresh foods and groceries at affordable prices. Such neighborhoods are referred to as food deserts.

The opening of the Fresh & Easy market today, along with the opening of a store just a couple blocks away by local chain Superior Grocers, will greatly improve the access of food for neighborhood residents.

Fresh & Easy Buzz first reported on and wrote about Fresh & Easy Neighborhood Market's plans to build and open the new store in South Los Angeles in this July 2008 piece: Tesco's to Open A Fresh & Easy Grocery Market in Low Income, Underserved South Central Los Angeles Neighborhood.

[Additionally, see these follow-up stories: July 11, 2008: 'Food Desert' Neighborhoods and Southern California: More on the Fresh & Easy Store Planned For South Central Los Angeles and July 15, 2008: Fresh Food to Bloom in An Inner-City Food Desert: Tesco's Fresh & Easy Breaks Ground For New Store in Underserved South Los Angeles Neighborhood]

Added water for a food desert

A long line of shoppers and the mere curious were outside the new South Los Angeles Fresh & Easy store early this morning, waiting for the key to be turned in the lock to open the new market.

Los Angeles city councilwoman Jan Perry, who's district the store is located in, attended the grand opening this morning and was a featured speaker.

Councilwoman Perry, along with Los Angeles Mayor Antonio Villaraigosa, has for many years led the efforts to get more grocery stores and other food-oriented venues to open in underserved South Los Angeles.

For example, Councilwomen Perry was instrumental in Superior Grocers' locating its new, full-service supermarket in the neighborhood last year.

Superior Grocers currently has 33 stores in Southern California.

Tesco's Fresh & Easy has 88 of its current 145 stores located in Southern California. The other 57 stores are in Southern Nevada and Metropolitan Phoenix, Arizona.

Councilwoman Perry was the driving force behind the Central & Adams mixed-use development, which the Fresh & Easy store is the retail anchor for. There are 80 affordable-priced apartments located above the ground-floor grocery market.

A recent study by the commercial real estate firm CB Richard Ellis concluded that South Los Angeles is in need of food and grocery retailing, dining and entertainment businesses to service the community. The study also found that South Los Angeles-area residents have to travel at times up to 10 miles in order to buy fresh food and groceries as affordable prices.

At this morning's grand opening, Councilwoman Perry said: "Fresh & Easy is bringing quality fruits, vegetables, meat, and wholesome foods to an area in great need of grocery outlets and food options. I am excited to see this new urban model here in South Los Angeles. I am proud that we can count them as a new investor in our neighborhood."

Mayor Villaraigosa is attending the annual U.S. Conference of Mayors in Washington D.C. But Los Angeles Deputy Mayor Austin Buetner was there with Councilwoman Perry.

As part of the store's grand opening this morning, Tesco's Fresh & Easy gave a $1,000 donation to L.A. Works, a local organization that encourages volunteerism.

Getting from a half to a full loaf

Fresh & Easy Buzz congratulates Tesco's Fresh & Easy for opening the store in the underserved South Los Angeles neighborhood. We also believe its good business for Fresh & Easy to do so. Contrary to what's passed as conventional wisdom, which is changing, among many in the food retailing industry, locating stores in underserved, food desert neighborhoods can pay off in sales dollars.

In this piece yesterday - Food Deserts & WIC Vouchers: Half A Loaf For the New Fresh & Easy Store Opening Tomorrow in South Los Angeles - we wrote that Tesco's opening of the Central & Adams neighborhood Fresh & Easy market is a positive effort in the move towards increasing the food shopping choices of residents of underserved communities. And it is.

However, the thesis of our piece is that doing so only provides "half a loaf" in Fresh & Easy's case.

That's because Tesco's Fresh & Easy Neighborhood Market does not accept WIC Vouchers as a matter of company policy, despite the fact that nearly 100% of its competitors in Southern California do.

As such, this is the "half a loaf," as we detail in yesterday's piece linked above.

For example, the Superior Grocers supermarket just a couple blocks away from the Central & Adams Fresh & Easy store accepts WIC Vouchers, as do all of its 33 stores.

As the grand opening, Mary Kasper, Fresh & Easy Neighborhood Market's vice president & general counsel said: "We're opening stores in all types of neighborhoods because we fundamentally believe everyone – regardless of where they live – deserves access to quality, fresh food at affordable prices. We're also proud to bring more quality jobs to the neighborhood, particularly in this economy. We had hundreds of applicants attend our job fair at the local YMCA last month and we have worked hard to hire right from the neighborhood."

Ms. Kasper has worked hard with Councilwomen Perry and her staff in getting the Central & Adams Fresh & Easy store open in South Los Angeles. We think the goal and policy she stated this morning is a positive and laudable one.

However, we suggest the paragraph below as a natural corollary to the policy Ms. Kasper articulated in her statement today, and as such should be implemented by the grocery chain:

In addition to opening stores in all types of neighborhoods because of the fundamental belief that everyone - regardless of where they live - deserves access to quality, fresh food at affordable prices (something we agree completely with), wouldn't it also make sense to offer the many mothers, children and infants that receive WIC Vouchers in South Los Angeles and all of Southern California, along with in Nevada and Arizona, the opportunity to purchase fresh, healthy and nutritious foods using those vouchers at Fresh & Easy's 145 fresh foods and grocery stores, which is something they are unable to do at present?

Policy consistency - as well as positive corporate-community relations and plain old good business sense (added sales for accepting the WIC Vouchers) - suggests to us it would make not only good - but logical - sense to do so.

[Related Post: February 23, 2010: Food Deserts & WIC Vouchers: Half A Loaf For the New Fresh & Easy Store Opening Tomorrow in South Los Angeles]

[Photo credit: Fresh & Easy Neighborhood Market. You can view additional photographs from the store opening today here.]

Tuesday, February 23, 2010

Food Deserts & WIC Vouchers: Half A Loaf For the New Fresh & Easy Store Opening Tomorrow in South Los Angeles

[Photo Credit: Fresh & Easy Neighborhood Market]

Commentary & Analysis

Beginning tomorrow, when Tesco's Fresh & Easy Neighborhood Market opens its new food and grocery store at 1025 East Adams Boulevard (pictured above), residents of the low-income Central & Adams neighborhood in South Los Angeles, which is underserved by full-service grocery markets, will have an additional place to shop for fresh foods, groceries and related products.

The Central & Adams neighborhood, like most of South Los Angeles, is a food desert, a generally urban area (but can be rural too) in which few supermarkets or grocery stores offering a decent selection of fresh food and grocery products exist.

Residents of food desert neighborhoods have a limited choice of nearby food shopping venues. Instead, they must either travel a considerable distance to the closest supermarket or shop at neighborhood convenience stores or mini-marts, both of which offer a limited selection of foods (particularly nutritious ones), and have prices considerably higher than those at supermarkets and other format stores offering food and groceries, like Walmart, Costco and Target, for example.

Since most often food desert neighborhood residents are lower income folks, this serves as a "double-whammy" for them economically: shopping at the convenience stores and mini-marts costs at least 30% more than at supermarkets. Additionally, many residents of food desert neighborhoods don't own cars. This means they have to take public transportation to the nearest supermarket, which often means spending money they don't have.

And of course the lack of fresh and nutritious foods available nearby often leads to health problems such as obesity and diabetes, to name just two.

No WIC Vouchers at the new South L.A. Fresh & Easy

Unfortunately, not all of the residents of the Central & Adams neighborhood in South Los Angeles will be able to take advantage of the new Fresh & Easy market when it opens tomorrow.

That's because Tesco's Fresh & Easy doesn't accept WIC Vouchers, which are distributed by California's Women, Infants and Childrens Program to poor woman, infants and children., at any of its 141 stores.

WIC is a federally funded health and nutrition program for women which, among other things, helps families by providing checks for buying healthy supplemental foods from WIC-authorized vendors.

WIC is a lifeline for many women and their children

WIC is funded by federal dollars, administrated by states, and implemented by counties, as is the

case in Los Angeles County, where the new South Los Angeles Fresh & Easy store is located. For most of these families, which are often headed by a single woman, were it not for the WIC Vouchers, the infants and children would likely go without much needed essential and nutritious foods like infant formula, whole milk, whole grains, and fresh fruits and vegetables.

Unlike food stamps, which is another government food assistance program, the WIC Vouchers stipulate the kinds of foods families can purchase at grocery stores using the checks. [Here's a list of the qualifying foods under the WIC program.]

The vouchers look similar to a check, and list the types of foods on them users can purchase. At the grocery store the clerk fills in the voucher blanks and processes it just like stores do with paper checks.

In California, 82 local WIC agencies serve over 1.4 million women, infants and children each month under the nutritional food assistance program.

Additionally, in the last two years of the recession, requests for WIC vouchers have soared, according to California WIC, including requests from women who in the past have never received, or even thought about receiving, food assistance of any kind from a governmental agency.

According to California and Los Angeles County WIC, South Los Angeles has one of the highest percentages of women, infants and children receiving WIC Vouchers in the state. This shouldn't be a surprise because Central Los Angeles also has one of the highest poverty rates in California.

But because Tesco's Fresh & Easy Neighborhood Market does not accept WIC Vouchers as a matter of corporate policy, the many women, infants and children in the neighborhood who rely on WIC to survive and have at least a minimal amount of nutritious food, won't be able to use the vouchers at the 1025 East Adams Boulevard Fresh & Easy fresh food and grocery store that opens tomorrow.

Nearby competitor Superior accepts WIC Vouchers

There is some good news for these woman, infants and children though. A local chain, Superior Grocers, opened a supermarket last year in South Los Angeles, just a couple blocks from the new Fresh & Easy store - and Superior accepts WIC Vouchers at its South Los Angeles store, along with at all of its 33 supermarkets in Southern California.

When Superior opened its South Los Angeles store last year it made a major impact on better serving the food store-underserved residents of Central Los Angeles.

The new Fresh & Easy store will add to that better service for residents - accept unfortunately for the women, infants and children who rely on WIC program assistance in order to obtain nutritious foods.

And in many cases were it not for the WIC Vouchers, many of these women, infants and children would experience regular hunger. Many still do even with the vouchers, but the program provides a lifeline for them.

Time for Fresh & Easy to accept WIC Vouchers

Fresh & Easy Buzz has called on Tesco's Fresh & Easy to accept WIC Vouchers in the past - both because it's the right thing to do from a corporate responsibility stance and as a "neighborhood grocer," which Fresh & Easy defines itself as - but also because it makes just plain good business sense (self interest) for any grocer to do so, especially one that needs sales like Fresh & Easy does. These are basically the reasons pretty much 100% of Fresh & Easy's competitors in California, Nevada and Arizona accept WIC Vouchers.

Additionally, there's a historical social pact or contract between the state of California and its grocers in which accepting the WIC Vouchers is a part. Fresh & Easy is really out of sink in the industry but not understanding this social pact and changing its policy to accept the WIC.

Further, from the smart business perspective, WIC brings considerable added sales to grocers, particularly in lower income areas like Central Los Angeles which have many voucher users.

For example, many of the items that can be purchased using the vouchers are "high ring" items like infant formula, whole milk and whole grain cereals.

WIC recently added more fresh produce items to the program as well. Last time we checked, Tesco's Fresh & Easy could use all the added fresh produce sales it can get. There is still considerable shrink (throwing away) in the grocer's fresh produce category, along with regular 50% markdowns of produce and other fresh foods items as they near the end of their code dates.

WIC is one of the few programs that has widespread bipartisan support in Congress. Liberal Democrats from urban districts like the program for obvious reasons. However, many farm state conservative Republicans also support WIC, for among other reasons due to the fact that it brings considerable revenue to the farmers and food processors in their states.

Most moderates in both parties also support WIC. For example, in the last three Republican Presidential Administrations - Reagan, Bush 41 and Bush 43 - there was no serious discussion about getting rid of WIC.

When Republicans held a majority in Congress for years they made no efforts to eliminate WIC either.

Last year Congress passed legislation, which the President signed, that added $1.2 billion in funding to WIC, a 22% increase in its budget, as we wrote about in this March 2009 piece: Federal Government Spending Bill Increases WIC Voucher Program Dollars by $1.2 Billion; 21 Percent Increase.

Food deserts, food access and WIC Vouchers

Food deserts have been much in the news over the last week because of First Lady Michelle Obama's new "Lets Move" childhood obesity and nutrition initiative.

A major element of the "Lets Move" program is called "Accessing Healthy & Affordable Food." Here's what the First lady says about this part of her initiative (in italics):

"More than 23 million Americans, including 6.5 million children, live in low-income urban and rural neighborhoods that are more than a mile from a supermarket.

These communities, where access to affordable, quality, and nutritious foods is limited, are known as food deserts.

By using the new (USDA) interactive Food Environment Atlas, users can see the location of food deserts across the country and other indicators of how successful communities are in accessing healthy food.

Lack of access to proper nutrition is one reason why many children are not eating the recommended levels of fruits, vegetables, and whole grains.

Food insecurity and hunger among our children is even more widespread. A recent USDA report showed that in 2008, an estimated 49.1 million people, including 16.7 million children, lived in households that experienced hunger multiple times throughout the year. (Household Food Security in the United States, 2008.)

Too often, these same school age children are not eating the recommended level of fruits, vegetables, whole grains, and low fat dairy products. (source) So, Let’s Move to ensure that all families have access to healthy, affordable food in their communities.

As part of the President’s proposed FY 2011 budget, the Administration announced a new program – the Healthy Food Financing Initiative -- a partnership between the U.S. Departments of Treasury, Agriculture and Health and Human Services which will invest $400 million a year to provide innovative financing to bring grocery stores to underserved areas and help places such as convenience stores and bodegas carry healthier food options.

Grants will also help bring farmers markets and fresh foods into underserved communities, boosting both family health and local economies. Through these initiatives and private sector engagement, the Administration will work to eliminate food deserts across the country within seven years.

This Spring, will unveil specialized tool kits and strategies to help increase access to healthy, affordable food in communities across the country."

It's rather clear (read paragraphs three and four) that the federally-funded WIC Program plays a key part in the First Lady's "Lets Move" initiative - and it does.

After all, if you build a supermarket in a food desert neighborhood, but those living in the neighborhood who are in most need of affordable, nutritious food - mothers, children and infants receiving WIC Vouchers - can't use them at your store, are you really part of the solution for all residents?

Suggestion for Fresh & Easy: 'Lets Move' - on accepting WIC

Tesco's Fresh & Easy wants to get credit for opening stores in these underserved, food desert neighborhoods. For example, on February 19 the grocer tweeted on its feed being mentioned in this National Public Radio news report about the First Lady's initiative and the topic of food deserts.

As we've reported before, Fresh & Easy has opened about three -to- four of its current 141 stores in neighborhoods that can be classified as food deserts.

We give Tesco's Fresh & Easy credit for opening those three or four stores in food desert neighborhoods, as we have done in past pieces in the Blog.

But any credit the grocer takes or is given must be only "half a loaf."

The other half of the loaf comes when Tesco's Fresh & Easy changes its policy and, like nearly 100% of its competitors, accepts WIC Vouchers from those women, children and infants that today can't use them in any of the grocer's stores, including the new South Los Angeles Fresh & Easy market that opens tomorrow at 1025 East Adams Boulevard.

To quote the wife of the current American President: "Lets Move."

Related posts in Fresh & Easy Buzz:

March 20, 2009: Federal Government Spending Bill Increases WIC Voucher Program Dollars by $1.2 Billion; 21 Percent Increase

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

December 29, 2008: Tesco's Fresh & Easy, 'Food Deserts' and WIC Vouchers; A 'Year-End' Analysis & Commentary

September 7, 2008: Analysis & Commentary: Should Tesco's Fresh & Easy Put An Asterisk Next to its Motto? Yes; Unless it Corrects Four Operational Omissions.

June 3, 2008: Fresh & Easy Buzz Redux: Barack Obama to Tesco's Fresh & Easy in Our February 13 Piece: 'Build More Stores in Underserved Neighborhoods'

May 12, 2008: Food Deserts: Coalition to Create 'Blue Ribbon' Commission, Draft Report to Encourage Grocers to Open Stores in Underserved Los Angeles Neighborhoods

February 13, 2008: Leading Democratic Candidate for President Barack Obama Joins Group in Asking Tesco's Fresh & Easy to Put More Stores in Underserved Neighborhoods

September 23, 2008: Food Retailing, Society & Economics: 'Food Deserts' and Public Health

August 11, 2008: Arizona Region Market Report: Which Food Retailer Will Seize the Opportunity Offered by the Lack of a Grocery Store in Downtown Tempe, Arizona?

July 29, 2008: Tesco's Fresh & Easy and San Francisco's Tenderloin Redux: Upcoming Developments Offer First Mover Opportunity For Fresh & Easy or Competitors

July 15, 2008: Fresh Food to Bloom in An Inner-City Food Desert: Tesco's Fresh & Easy Breaks Ground For New Store in Underserved South Los Angeles Neighborhood

July 2, 2008: Tesco's to Open A Fresh & Easy Grocery Market in Low Income, Underserved South Central Los Angeles Neighborhood

July 11, 2008: 'Food Desert' Neighborhoods and Southern California: More on the Fresh & Easy Store Planned For South Central Los Angeles

July 6, 2008: Former NBA Great Earvin 'Magic' Johnson is Working His Business Magic in Urban, Inner City Neighborhoods; We Offer An Idea For Tesco's Fresh & Easy

May 28, 2008: Las Vegas Market Report: A 'Food Desert' Neighborhood to Get A New Grocery Store; But it's Not A Fresh & Easy Neighborhood Market

May 14, 2008: New Foods At Fresh & Easy: Los Angeles' 'Homeboy Bakery' and Tesco's Fresh & Easy Could Be A Match 'Made in Heaven'

June 1, 2008: Upcoming New Markets Special Report: From Food Desert to Urban Oasis? Tuesday Election Could Change San Francisco's Bayview-Hunters Point Forever

April 30, 2008: (Grocery) Storeless in Seattle: Food Deserts in Urban and Inner-City Seattle, Washington; Might be a 911 Call to Tesco's Fresh & Easy?

April 27, 2008: New Study Points to Increasing Urban 'Food Deserts' In North America: Locating Stores in 'Food Deserts' A Part of Fresh & Easy's Strategy

April 29, 2008: Tesco's Fresh & Easy an Issue in Sacramento, California Mayor's Race A Year Before its First Store in the Capital City Even Opens

April 13, 2008: San Francisco: Cool Bay Breezes, A City Full of History, Cable Cars--And A 'Fresh & Easy' State of Mind

March 7, 2008: Former NBA All-Star and Sacramento Native Kevin Johnson is the Driving Force Behind a Fresh & Easy Market in Sacramento's Oak Park Neighborhood

February 19, 2008: Tesco's Fresh & Easy Serving as an Economic Stimulus Package of Sorts for California's Troubled Commercial Retail Real Estate Industry

February 10, 2008: Tesco's Fresh & Easy Opens Latest New Store in 'Food Desert' City of Compton, California

Monday, February 22, 2010

Food, Drug Retailers With Stores in California, Nevada & Arizona Honored for Private Label-Store Brands' Excellence

Store Brands Innovation in the 21rst Century

Six food and grocery retailing companies - Supervalu, Trader Joe's, Target, Smart & Final, Walmart and Whole Foods Market - and two drug chains - CVS and Walgreens -with stores in California, Nevada and Arizona, the three states where Tesco operates its 141 Fresh & Easy Neighborhood Market fresh food and grocery stores, have been honored by the Private Label Manufacturers Association (PLMA) for their store brand products in the trade group's 2010 'PLMA Salute to (private label) Excellence Awards.' Two of the retailers - Trader Joe's and Smart & Final - are headquartered in Southern California.

PLMA is the leading U.S. industry trade association for private label and store brand manufacturing and merchandising.

The PLMA store brand excellence awards are in two sectors: food & drink and home & health (non-foods).

Food & Drink

First, in the food & drink sector, PLMA gave its private label excellence award in the Condiments and Dressings category to Supervalu, Inc., for its Wild Harvest Organic Sweet Pepper Thousand Island Salad Dressing

Supervalu, which is headquartered in Minnesota, operates the Albertsons supermarket chain and the Bristol Farms specialty food and grocery chain in Southern California. Supervalu also owns the small-format, hard-discount Save-A-Lot grocery chain, which has a few stores in California and Nevada.

Supervalue also was awarded two private label excellence awards in two food & drink categories for its Sav-A-Lot store brand products.

First, in the Children's & Baby Foods category, Sav-A-Lot's Coburn Farms MooGurts Lowfat Yogurt Combos store brand garnered the excellence award.

Additionally, in the Dairy Products category its Coburn Farms Creamy Whip Light Cream won the honors.

Southern California-based iconic grocer Trader Joe's grabbed two PLMA excellence awards: one in the Breakfast Foods category, for its Trader Joe's Gourmet Flakes & Chocolate Cereal, and the other in the Pasta & Pasta Sauces category, for its Trader Giotto's Arrabiata Sauce.

Trader Joe's was founded in Southern California in the 1970's - and its corporate headquarters remains there. Southern California has the greatest number of Trader Joe's stores out of the chain's about 314 units nationwide in the U.S.

Discount chain Target, which like Supervalu, Inc. is headquartered in Minnesota and has numerous stores in California, Nevada and Arizona, garnered a private label excellence award in the Mexican/Latin Foods category for its Archer Farms Roasted Salsa Verde.

Last - but far from least - Los Angeles-based Smart & Final Stores Corp. and its Henry's Farmers Market chain was awarded a private label excellence award in the Natural Foods category for its new Sun Harvest store brand Natural Wildflower Honey.

This is a big win for Smart & Final and Henry's because the retailer created the Sun Harvest natural and organic brand just last year, and only completely introduced the brand in its Henry's Farmers Market, Sun Harvest (Texas), Smart & Final and Smart & Final Extra stores this year. The Blog Natural~Specialty Foods Memo detailed the Sun Harvest private label program in this January 2009 story.

Home & Health (non-foods)

Supervalu, Inc.'s Sav-A-Lot scored another private label excellence award, this time for a non-foods item in the Baby Products category, for its Being Well Baby Premium Contoured Nursing Pads.

Arkansas-based Walmart also grabbed an excellence award (Bath & Body category) from the private label trade association, in its case for the retailer's Simply Basic Bath & Shower Gel brand.

Whole Foods Market, Inc., which is headquartered in Texas and has about 100 stores in California, Nevada and Arizona, took the private label excellence honors in the Pet Products category for its Whole Paws Hip & Joint Formula Dog Biscuits.

Rounding out the store brand excellence awards in the home & health segment are two drug chains - CVS and Walgreens. Both drug chains have numerous stores in California, Nevada and Arizona.

CVS won in what the PLMA calls its Kids Corner category for the drug chain's CVS Kids' (dental)Flossers.

Walgreen's, the largest U.S. drug chain, was awarded a private label excellence honor in the Personal Care and Toiletries category for its Studio 35 Beauty 11 Piece Beauty Makeover Essentials kit.

For a complete listing of all the 'PLMA Salute to Excellence Awards' retailer (and wholesaler)winners, along with complete details on how the winners were chosen, click here.

Store Brands: Growth

Private label is a fast-growing trend in the United States. For example, market research firm Nielsen reports that private label sales have increased by 12% in supermarkets, drug chains and mass merchandisers since last summer.

Total U.S. private label sales (retailers and wholesalers) for 2009 reached about $85 billion, and unit market share rose to more than 23%.

Additionally, consumers are taking to store brands, especially (but far from exclusively because of) in the economic recession.

According to a recent survey by the GFK-Roper, more than 60% of all shoppers now say that they purchase store brands frequently, up from 40% just three years ago.

Additionally, Eight out of 10 consumers surveyed said that store brands are as good or better than national brands, and nearly 20% of shoppers said they expect to buy more private label this year.

Further, 91 percent of the shoppers who say they switched from buying name brands to buying store brands during the past year said they will continue buying the store brand after the recession ends.

Most price-comparison surveys conclude that when it comes to everyday prices, store brands are about 20% -to- 30% cheaper than comparable national branded food, grocery and non-foods packaged goods.

Price has historically been the primary consumer motivation for purchasing store brands. However that's changing, as the survey data above, along with other research, suggests. Consumers are increasingly viewing private label products as equal to the quality of national brands in many if not most categories. Store brands have come a long way since the days of generics.

Store Brands: Focus

One of the pioneers in store brands is Trader Joe's, the winner of two PLMA excellence awards. About 80% of all items sold in Trader Joe's grocery markets are branded under one of the grocer's numerous store brands. Store brands are the focus rather than a secondary offering at Trader Joe's.

Tesco's Fresh & Easy, using Trader Joe's as its model, also puts an emphasis or focus on store brands - in its case its fresh&easy brand - in its 141 fresh foods and grocery stores located in California, Nevada and Arizona. About 60% of the SKUs sold in Fresh & Easy stores are under its fresh&easy store brand (called own brand in Britain where Tesco is based), with about 40% being national and regional manufacturers' brands.

Store Brands: Growth among Top Food Retailers

The top five (by annual sales volume) food and grocery retailers in the U.S. - Walmart Stores, Inc., Costco Wholesale, Kroger Co., Supervalu, Inc. and Safeway Stores, Inc. - all have extensive store brand offerings across nearly every consumable and non-foods product category, ranging from discount brands to (in the case of Costco, Supervalu, Kroger and Safeway) specialty, natural and organic offerings.

Safeway Stores is even marketing its O' Organics organic foods' line and 'Eating Right' healthy foods' brand to other retailers, both in the U.S. and globally.

Store Brands: Fresh, Prepared Foods

As we've written extensively about in Fresh & Easy Buzz, there's also a growing trend by retailers to create and merchandise their own brands in the fresh, prepared foods category.

Tesco's Fresh & Easy offers an extensive line of ready-to-eat and ready-to-heat fresh, prepared foods under its fresh&easy brand, for example.

Walmart has thus far introduced two fresh, prepared foods items under its 'marketside' brand: a line of ready-to heat-pizzas and most recently a line of 'marketside' fresh, refrigerated ready-to-heat soups. [See: January 9, 2010: Walmart's 'marketside': What's 'In-Store' for 2010?]

Safeway Stores, a leader in store brand fresh, prepared foods, has developed an extensive line of its own brand fresh, prepared foods under its 'Signature Cafe' brand. These items include dozens of ready-to-eat and ready-to-heat prepared foods products.

And of course, as Fresh & Easy Buzz has most recently reported on and written extensively about, the Walgreens drug chain is working on a fresh, prepared foods program of its own. The focus of the fresh foods program will primarily be on ready-to-eat, grab-and-go items, along with some ready-to-heat foods, branded under a store brand. (Note: We think one of the Walgreens' prepared foods brands will be under its existing 'Cafe W' store brand.)

Store Brands: Blue Sky

These food retailers represent just a small example of what's happening in the fast-growing store brand fresh, prepared foods arena, as do those mentioned represent a mere slice of what's going on in the industry in terms of overall private label or store brand development.

We see only continued innovation and growth in the development, merchandising and marketing of store brands by retailers.

In addition to the fast-growth fresh, prepared foods segment, we also see strong, continued store brands' growth in the natural and organic foods categories, as well as in the lower-end, value-based categories, both in consumables and in non-foods.

It would be a mistake as well to see private label as a mere reaction to the current, and now two-plus year old economic recession.

There's no doubt the recession has been a force to increase sales of store brands over the last two years. However, private label development and merchandising was going strong before the recession hit - and it will remain strong once its over - in our analysis.

Meanwhile, look for those retailers honored by the PLMA to be among those innovating and leading the store brands charge this year and in the years to come.

Monday, February 8, 2010

'I Taste Therefore I Tweet': Fresh & Easy Set to Hold 'Twitter (Wine) Tasting' Tomorrow Night

Tesco's Fresh & Easy Neighborhood Market has teamed up with the online wine tasting community Taste Live, and is holding a virtual wine tasting event tomorrow evening (February 9, 2010) from 7:00 pm -to- 8: 00 pm (Pacific Standard Time).

Fresh & Easy is calling the virtual wine tasting a "Twitter Tasting" because the event will focus on tasters' tweeting their evaluations of the three wines being tasted on the social media site

Tasters will be sampling three of Fresh & Easy's proprietary wines during the one hour virtual and social media wine tasting tomorrow night.

The three wines are: Montcadi Cava Rose from Spain, which sells for under $6; Boro Hills Sauvignon Blanc (from New Zealand), which sells at Fresh & Easy for about $11; and Matuco Malbec 2007 (Argentina), which retails for under $10.

Tasters can buy one, two or all three of the wines at a local Fresh & Easy market for the tasting. Here's a brief description of each of the wine varieties.

Taste Live often holds these virtual wine tastings in partnership with various wineries like Kunde Family Wines and others.

Here's how the virtual "Twitter Tasting" works:

>Those interested in participating first need to register at Taste Live using their Twitter or Facebook account, or by creating an account at the Web site here.

>Once registered, event participants then need to RSVP their intended participation to Tesco's Fresh & Easy here.

>Tasters then buy one or more of the three wines being tasted during the one hour "Twitter Tasting" at a Fresh & Easy store.

Karen Fletcher, Fresh & Easy Neighborhood Market's category manager for wine, is hosting the "Twitter Tasting" tomorrow night, according to Fresh & Easy.

During the one hour event Fresh & Easy will be tweeting at its @fresh_and_easy account on

The grocer's social media team has created a Twitter hashtag - #FandEWine - which it wants tweeter-wine tasters to use after each of their tweets in order to be able to track the one hour "Twitter Tasting."

Such hashtags used on Twitter allow for users to search particular topics on the site by entering the hashtag into its search function.

Fresh & Easy wine merchandising & marketing

First, Fresh & Easy Buzz likes the concept of the "Twitter Tasting." We give Tesco Fresh & Easy's marketing team, particularly its social media folks, a thumbs up for giving it a try.

The reason we like it is because it's different, is a bit out of the box, and fits in well with the much improved job (since about mid-2009) the grocer's social media team has been doing using Twitter, Facebook and YouTube.

We also like it because although it's virtual, it's also participatory - it brings tweeters and others together in a form of community around a common event - wine tasting.

Such uses of social media can over time build up a strong core of Fresh & Easy wine shoppers-consumers if done well.

It's using social media for marketing purposes but the event emphasises the "social" over the "marketing" aspect because of the focus on the wine tasting. Participants can be as critical as they want about the wines in their tweets, which means Fresh & Easy can't control the marketing message, like a retailer can do with paid advertising and the like.

One of Tesco's goals with Fresh & Easy is to build the Fresh & Easy retail brand in part through making its proprietary wines and wine merchandising program "famous." In fact, this is one of the charges the grocer gave to the marketing-oriented public relations firms it interviewed in March-April 2008.

Additionally, the fantastic success of wine sales at Trader Joe's hasn't been something lost on Tesco. It's no accident Fresh & Easy's wine and beer program looks very similar to Trader Joe's in terms of product selection, merchandising and marketing.

Fresh & Easy's wine program or wines aren't famous yet. But creative marketing programs like the "Twitter Tasting," combined with good product selection and merchandising, can go a long way in brand building, in our analysis.

Of course, key to tomorrow night's "Twitter (wine) Tasting" being a success is the fact that it has participants. The more tweets the better. Also, the more critical - not just pro the wines tasted - tweets during the tasting the more interesting it will be.

After all, when it comes to criticism (and even a bit of whining), some of the best involves wines.

[Readers: Click here for a selection of past stories from Fresh & Easy Buzz on Tesco Fresh & Easy's wine program, wine category merchandsing, and related topics and issues.]

Tuesday, February 2, 2010

Dunnhumby; Trial Balloons By Media; and Fresh & Easy's Loyalty Card Marketing Trap

Analysis & Commentary

There's been quite a bit of written and verbal discussion over the last couple months about whether or not Tesco's Fresh & Easy Neighborhood Market will adopt a loyalty card program like or similar to the one its parent company, Tesco, has in the United Kingdom.

On December 7, 2009 the Financial Times (FT) newspaper published a piece in which it suggested Fresh & Easy was going to start a loyalty card program modeled after the Tesco Clubcard.

However, a few days later (December 8, 2009) a spokesperson for Tesco's Fresh & Easy told the trade publication Supermarket News the FT report wasn't true, and that the Southern California-based fresh foods and grocery chain has no plans to institute a club card program in its stores in California, Nevada and Arizona.

Fresh & Easy Buzz wrote about these conflicting reports and the topic in general in this December 8, 2009 piece: Analysis: Why A Loyalty Club Card Program Makes Zero-Sense For Tesco's Fresh & Easy USA.

Much of the loyalty card or not for Fresh & Easy USA discussion centers around the fact Tesco is the majority-owner (84%) of the firm Dunnhumby, which in partnership with Tesco pioneered the use of loyalty card programs in the supermarket industry. Tesco doesn't advertise its majority ownership stake in Dunnhumby, just as for that matter it doesn't advertise that it owns Fresh & Easy.

Recent rumors and one report also suggest Tesco is considering acquiring the remaining percentage of Dunnhumby it already doesn't own.

For example, the British trade publication The Grocer reported here on January 23, 2010 that Tesco is preparing to acquire the remaining 16% of Dunnhumby from the firm's founders and principals. Tesco hasn't confirmed or denied this report to date.

And the conflicting information about Fresh & Easy USA adopting a loyalty card doesn't end with the reports we mention above.

Indeed, the trade publication Supermarket News came back with a report on January 18, 2010 in which it wrote in its lead: 'Dunnhumby, the U.K. loyalty marketing firm in which Tesco has an ownership stake, is having “discussions” with Fresh & Easy Neighborhood Market, El Segundo, Calif., about working with the chain, Edwina Dunn, chief executive of Dunnhumby, told SN last week.' Here's a link to the report.

The British trade publication The Grocer also reported in its January 23, 2010 piece that, according to information from an insider, Tesco is looking for a "solution" in the U.S., suggesting the loyalty card could be perhaps one such "solution."

What's it all about: Dunn & Humby?

What we think is going on here has more to do with the future of Dunnhumby - the potential acquisition of the remaining 16% by Tesco, along with the futures of its principals - than it has to do with Fresh & Easy wanting to start up a loyalty card program, at least in the near to medium-term.

The various reports - beginning with the initial piece in the Financial Times, followed by the rebuttal to the FT report by Tesco's Fresh & Easy to Supermarket News, and then the January 18, 2010 "semi-scoop" given to Supermarket News by Dunnhumby CEO Edwina Dunn - all look to us in large part to be "trial balloons by media" designed to gauge the reactions of the various stakeholders - Fresh & Easy's senior management; Kroger Co., which owns 50% of Dunnhumby USA (the principals own the other 50%), for example - to the idea of Dunnhumby developing a loyalty card program with and for Fresh & Easy USA.

Additionally, the fact these reports just happened to come out at the exact same time when discussions have been rampant in the industry about Dunnhumby UK either being 100% acquired by Tesco or doing some sort of IPO isn't a mere coincidence.
Rather, what we're calling the "trial balloons by media" appear to be part and parcel of what the future of Dunnhumby UK and Dunnhumby USA - and the founders and principals - will end up being, in our analysis and opinion.

By the way, we aren't chiding Ms. Dunn and Mr. Humby - known collectively as Dunnhumby - at all.

Will Tesco acquire 100% of Dunnhumby? What will Dunnhumby founders and principles Edwina Dunn and Clive Humby do with the 50% of Dunnhumby USA they own? As mentioned, Kroger Co. owns the other 50%.

Might Kroger buy the founders' 50% of Dunnhumby USA if it believes Tesco's Fresh & Easy, which is a competitor of sorts in California, Nevada and Arizona, is going to get a Dunnhumby-crafted loyalty card program? Perhaps?
Might Tesco attempt to acquire Kroger's 50% of Dunnhumby USA in order to be free and clear to start up a loyalty club card program at its Fresh & Easy USA? Maybe? But we seriously doubt it.

Fresh & Easy's loyalty card marketing trap

As we wrote in our December 8, 2009 piece, it's our analysis that Tesco's Fresh & Easy has no near or medium term plans to start up a loyalty card program.
And if Fresh & Easy were to do so, it would have much explaining to do to shoppers from a marketing and merchandising standpoint.

Why? For those not in the know, one of Fresh & Easy's key merchandising and marketing propositions for some time has been an explicit anti-loyalty card position best depicted in the text in the red box (pictured above) which the fresh foods and grocery chain runs as a banner each week in the "weekly specials" section on its Web Site here, along with using it in other marketing venues.

How do you explain starting up a loyalty card program anytime soon when one of your key merchandising and marketing propositions is and has been for some time the following (in italics)?

"Sticker shock. In a good way. At fresh&easy saving money is simple. We don't have loyalty cards or gimmics, just honest, low prices for everyone, every day. How do we know our prices are low? We check them against our competitors every week so you don't have to."

This should put to rest any future reports that Tesco's Fresh & Easy USA is planning to implement a loyalty card program anytime soon - right?

After all, would Fresh & Easy Neighborhood Market CEO Tim Mason, who before taking on the job in 2006-2007 was Tesco's chief corporate marketing man in the United Kingdom, really make such a fundamental marketing mistake as to position Fresh & Easy as the anti-loyalty card chain - and then make a complete 180 degree turn and become the loyalty card chain?

Interestingly, none of the media coverage of a potential loyalty card program at Tesco's Fresh & Easy has reported or discussed this important point: That a key element of Fresh & Easy's merchandising and marketing proposition is an anti-loyalty card positioning.

Monday, February 1, 2010

Reader Open Thread: Should Grocers Ban Shoppers From Wearing Pajamas While Shopping?

United Kingdom-based Tesco, the parent company of Fresh & Easy Neighborhood Market USA, is making waves at home in Britain over a ban on wearing pajamas that one of its stores, a Tesco Superstore in St. Mellons, Cardiff, enacted last week.

At the Cardiff Tesco store, Elaine Carmody (pictured at left), was escorted out of the store and off the premises by store workers for breaking the new dress code prohibiting the wearing of pajamas (pyjamas in Britain) and other nightwear.

Here's a selection of press clippings about the Tesco store ban on wearing pajamas while shopping.

What quickly became a favorite topic in the British press last week, the Tesco store's pajama ban, is becoming an even more written and talked about topic in Britain this week after the Daily Mail and The Sun newspapers published stories pointing out that one of Tesco's TV commercials in 2007 featured its pitchman, British actor Martin Clunes, dashing into a Tesco store to pick up some milk while wearing a pair of pajamas.

Pajamas and supermarkets

Another irony of the Tesco pajama ban is that many of Tesco's food and grocery stores in the United Kingdom sell clothing, including pajamas and other nightwear. And Tesco sells some very attractive pajamas in its United Kingdom stores - including some you might not be ashamed to wear out in public.

We're all familiar with the age-old "No Shirt. No Shoes. No Service" policy at American fast food restaurants; a policy that seems to have worked well for both the stores and customers. However, we aren't aware of any fast food shops that will refuse to serve a customer wearing pajamas, either in the U.S. or across the pond in Britain.

Those who have or currently work in supermarkets and other retail stores know all to well the variety of dress, and lack of dress, some customers show up in to shop.

Grocery stores particularly are a human laboratory for the sartorial choices and behaviors of consumers. After all, food stores are a crossroads of humanity. Everyone has to eat - and therefore nearly everyone has to shop.

Pajamas and the evolution of cultural dressing norms

In the case of pajamas though, the attire has undergone a bit of a revolution over the last decade or so. In fact, today one can find designer pajamas that look every bit as nice, or even nicer, than some forms of regular day wear.

Pajamas have also undergone a cultural shift as a form of dress, from being strictly bedtime clothing to today being much more general purpose wear. This change goes hand-in-hand with the higher quality and better looking pajamas we mentioned earlier.

For example, many time-pressed mothers might leave their pajamas on while dropping off the kids at school in the early morning, and then perhaps drop into the grocery store after before returning home.

Additionally, ask any college professor, and he or she will tell you that it's not unusual for a number of students to show up in early morning classes wearing pajamas. Some college professors dislike this trend. Others seem to care less about it.

We've even heard of party's and gatherings in which those invited are encouraged to wear pajamas to the event. This signals a cultural shift away from the view that pajamas are attire designed to wear just for bedtime.

Reader Open Thread: Your opinions please

So we ask: With all the cultural changes pajamas have undergone, and are undergoing, as a form of dress, does it really make sense for a retailer like Tesco to ban shoppers from wearing them like its store in Britain has done?

Or do any of those changes matter? Is the Tesco store right to have banned customers from shopping-while-wearing-pajamas?

And even further, we ask: Should all supermarkets ban shoppers from wearing pajamas and other nightwear in their stores?

Tell us what you think on the topic using the comments box below. Opine away.

[Photo Credit: Wales News Service.]