increased slightly, and Vons remained steady.
Thursday, April 29, 2010
increased slightly, and Vons remained steady.
Tuesday, April 27, 2010
WinCo Foods' Entry Will Put the 'Ultra' in the Already 'Hyper-Competitive' Metro Phoenix, Arizona Market
Early this year we posted a "tweet" on our Twitter.com site, in which we predicted Idaho-based grocery chain WinCo Foods was planning to enter the Arizona market, starting with a few stores - the first opening likely in 2011 - in the Metropolitan Phoenix market region.
Our knowledge came as the result of information we first started receiving from sources in December 2009 that WinCo had set its sights on the hyper-competitive Metro Phoenix market.
Additionally, before posting our tweet, we checked in with a source at WinCo Foods via e-mail. And although the source said they couldn't "confirm" WinCo was "planning" to open one or more stores in the region, they said they could tell us "WinCo is very interested in getting into the Arizona market," which is about as good of a non-confirmation, confirmation as you can get.
Today, the Arizona Republic offers about as good of a non-WinCo Foods' spokesperson confirmation as a publication can get, in a story by staff writer Rebekah L. Sanders.
In the story, "Plan to put grocer at Glendale farm site irks neighbors," Ms. Sanders reports that a group of neighborhood residents in a semi-rural part of the Phoenix suburb of Glendale, Arizona, are objecting to a developer, and WinCo Foods', plans to locate one of the big (average 90,000 -to- 100,000 square foot) WinCo discount food and grocery stores on a vacant plot of land where the developer is planning a shopping center featuring the supermarket, four medium sized retail buildings, and 13 smaller shops. [Click here to read the Arizona Republic story.]
The project-area near Glendale is set to become a food and grocery retailing hot corner.
For example, Walmart is building a new (40,000 -to- 45,000 square foot) Neighborhood Market supermarket about one mile away.
Additionally, the CVS drug chain is building a new store nearby. CVS sells a fairly healthy selection of packaged food and grocery products, beverages (adult and non-adult) and perishables items in its drug stores. It also devotes about half of its weekly 12-page advertising circular to the promotion of consumables and non-foods packaged goods.
Evaluating the odds
Winco could be in for a fight from the neighborhood group in terms of gaining approval for its first Metro Phoenix store in Glendale, although the two members of the City Council, who's districts border the planned center, support the project, according to the Arizona Republic story. A similar group of neighborhood residents was successful in preventing retailer Target from building a 100,000-plus square foot store in the area a few years ago.
However, this was before Arizona's economy went into free-fall in 2008. With unemployment in the area at about 10%, it's going to be difficult for the City Council to say no to the project, particularly since WinCo employs about 300-400 workers in a single store. Those are 300 badly needed new jobs in the Glendale area. The odds: We put our money on approval by the council, perhaps with some minor changes to the current plan for the center.
What we know
We know (although they haven't confirmed it) that WinCo Foods is looking at multiple sites for stores in Metro Phoenix, and may already have decided on at least two additional locations, based on information from our sources. As a result, even if the neighborhood group is successful in getting the project killed when the Glendale City Council votes on it next month, the setback isn't going to stop Winco from entering the Metro Phoenix, Arizona market, with its mega-food and grocery stores.
WinCo Foods is a majority employee-owned company. In fact, just last week WinCo said it bought out the 10% of the company - the only part of Winco Foods owned by an outside investor - held by Seattle, Washington-based investment firm Endeavour Capital Management. WinCo said its employees now own 87% of the company, through its ESOP (employee stock ownership plan). The remaining 12% is privately-held by WinCo Foods under a different ownership structure.
WinCo is non-union, and since it's majority employee-owned - and the employee-owners have said no to being unionized more than once - we doubt that status will change in the foreseeable future, if ever, even though the United Food And Commercial Workers union (UFCW) has been trying to organize the owner-employees for many years.
WinCo puts the 'ultra' in 'hyper-competitive'
Metropolitan Phoenix, Arizona is arguably the most competitive food and grocery retailing market in the U.S. In our analysis it's not arguable.
WinCo Foods, which has 71 stores located in six western states - Washington, Idaho, California, Nevada, Oregon and Utah, and has opened about eight new mega-stores in the last 15 months - is one of the most competitive food and grocery retailing chains in the United States, particularly in the price-impact segment.
It's stores, which devote the majority of the 90,000 -to- 100,000 square feet to consumable and non-foods packaged goods - but not electronics, clothing and other general merchandise like Walmart and Target do in their mega-stores - are also destination markets, meaning that on average customers will come from many miles away to shop at them. This is one of the reasons why, with just 71 stores, WinCo has estimated annual sales of $4-$4.5 billion.
Once it gets just a handful of stores opened in Metropolitan Phoenix, we predict WinCo will begin to become a game-changer in the market. It will not only take sales from nearby - and not so nearby - Walmart Supercenters and Neighborhood Market supermarkets, but also from conventional supermarket chains like Kroger's Fry's, Safeway, Albertsons, Bashas', and even Tesco's Fresh & Easy and other grocers in the market.
This isn't to say Arizona and Metro Phoenix - and particularly market share leader Walmart -will be by any means be easy pickings for WinCo Foods.
And in terms of putting market share numbers up on the board, it will take numerous WinCo stores open and operating in the market before that can happen. Rather, in our analysis, WinCo will find, once it opens in the region, that the Metropolitan Phoenix food and grocery retailing market will be the most competitive - actually hyper-competitive - of all the markets it's in to date.
Let the fireworks begin. Stay tuned.
[Related story - December 29, 2008: Competor News: Winco Foods to Expand in California and Nevada in 2009; Put Aggressive Focus on Central Valley, Northern California and Northern Nevada.]
[Competitive related posts here. Past reports & analysis of the hyper-competitive Metro Phoenix, Arizona market here, here and here . Click the "older posts," "new posts" links at the bottom of each page at those above links as well.]
Sunday, April 25, 2010
Thousands Get 'Cheesy' at Fresh & Easy Neighborhood Market Co-Sponsored Grilled Cheese Competition in Los Angeles
The grilled cheese-focused competition and festival was held from 12 pm -to- 6 pm at Los Angeles Center Studios, (1201 West Fifth Street) in downtown Los Angeles.
Tesco's Fresh & Easy Neighborhood Market signed on as one of the sponsors of yesterday's Los grilled cheese competition, which the organizers call "the best thing to happen to sliced cheese since sliced bread," this year.
In fact, speaking of sliced bread, Fresh & Easy's official title as a sponsor for the competition was "Official Bread Sponsor."
The "Exclusive Cheese Sponsor," (yes, the head cheese) of the event was Oregon-based Tillamook Cheese company." Tillamook also was the lead sponsor of the grilled cheese competition.
Additionally, there was an "Official Potato Chip" sponsor - Boulder Canyon Natural Foods - and an "Official Soft Drink" sponsor - Izee Sparkling Juice.
And what self-respecting grilled cheese sandwich competition wouldn't include an "Official Tomato Soup" sponsor? Not this one. That honor went to another Oregon-based company - Pacific Natural Foods. [Full sponsor list.]
As part of its sponsorship of the grilled cheese extravaganza, Tesco's Fresh & Easy received prominent mention at the event, such as signage and other forms of media. And of course the sponsorship is touted by the grilled cheese competition's organizers on the event website here.
Additionally, at the event yesterday, members of the Fresh & Easy team were passing out $5-off store coupons. We were told by an event organizer that every person attending the 1st 8th Annual Grilled Cheese Invitational was to get one of the Fresh & Easy coupons.
One of the highlights of yesterdays grilled cheese festival and competition was the "Cheesy Costume Contest," which was added for the first time this year. The contestants for that competition turned out in a variety of very creative costumes. Trust that Wisconsin's famous "Cheese Heads" had nothing on this group.
Even more interesting, there was a "Cheese Calling Contest," which was similar to a hog calling contest but without the oinking or the odor. Although some squealing was reported to have been heard during the contest.
We suggest signing on as a sponsor of the grilled cheese competition and festival was a good marketing move to do for Fresh & Easy Neighborhood Market.
First, the demographic of those attending the grilled cheese festival yesterday skewed to younger and more urban. This is the demographic we've found to most like the Fresh & Easy format, and to shop most frequently at the stores.
Additionally, being the official bread sponsor of the event provides Fresh & Easy the opportunity to do some creative merchandising and marketing in the coming weeks. Good merchandising and marketing is all about integration, after all. And event sponsorship offers that opportunity for a grocer.
For example, the grocer should consider a major promotion featuring all of the various items that can be used to make grilled cheese sandwiches - numerous varieties of cheese and bread, butter, tomatoes, fresh herbs and on and on. Along with the main ingredients Fresh & Easy can feature some of the endless varieties of products that go well with a grilled cheese sandwich - soups (especially tomato), snack chips, pickles, beverages and the like.
If Fresh & Easy Buzz were advising Tesco's Fresh & Easy, we would suggest the grocer partner with the other food and beverage sponsors of yesterday's grilled cheese invitational - Tillamook Cheese, Boulder Natural Foods (potato chips), Pacific Foods (soups) and Izee (sparkling juices) - along with adding some additional (besides bread) Fresh & Easy store brand items that relate to the grilled cheese sandwich theme - and build displays featuring the items in all of the stores.
We'd include on the displays colorful point-of-purchase signage touting the event and the winners, which will be announced tomorrow.
We would also tout the promotion in the weekly Fresh & Easy Neighborhood Market advertising flyer with a headline reading something like this: "The winners of the Los Angeles grilled cheese sandwich competition use Fresh & Easy brand bread." All of the grilled cheese sandwich themed promoted items would then go below the headline in the ad flyer. (We actually would have done the displays and promotion leading up to the event, putting the promotional focus on the then upcoming grilled cheese competition. But its not too late. The grocer could just put the focus on the winner aspect, as mentioned.)
Third and last, we suspect starting tomorrow (yes, were early), Saturday's grilled cheese invitation will get lots of press attention in the Southern California media. That's because tomorrow, April 26, is when the event's organizers will announce the winners of the grilled cheese competition in its various categories.
That could (and should) create some buzz in the market for Fresh & Easy, assuming it makes sure to be mentioned as a sponsor of the event by contacting members of the print and broadcast consumer press in Southern California starting early tomorrow morning.
Fresh & Easy Buzz hasn't seen a press release to date from Tesco's Fresh & Easy Neighborhood Market about its sponsorship of the grilled cheese sandwich competition. That's a mistake on the part of the grocer's marketing and public relations staff, since there's real local news and human interest value in the grocery chain's sponsorship of the event, by virtue of the fact there's lots of interest in the event in general.
Finally, sponsoring the event shows good community relations and involvement by Fresh & Easy, which is a solid positive, even if it can't be quantified in terms of sales volume.
Since the announcement doesn't come until tomorrow (April 26, 2010), we can't end this piece with a list of the winners of the big grilled cheese competition.
But tomorrow you can go to the grilled cheese invitational website for a list of all the winners of yesterday's downtown Los Angeles grilled cheese sandwich competition.
Meanwhile, a grilled cheese sandwich sounds like a pretty good idea for today's lunch.
Thursday, April 22, 2010
Breaking Buzz: Tesco's Fresh & Easy to Accept WIC Vouchers at its East Adams Store in South Los Angeles
Tuesday, April 20, 2010
CEO: Supervalu to Open 100 New Sav-A-Lot Stores This Year; Strategy to Double Store-Count to 2,400 in 5 Years in Place
However, the global food and general merchandise retailer reported a loss of $253 million, on sales of $544 million, for its Fresh & Easy Neighborhood Market USA fresh foods and grocery chain for the fiscal year.
That's a loss of $45 million more than the $208 million loss Tesco reported for Fresh & Easy in its 2008/09 fiscal year. Fiscal year 2008/09 revenue for Fresh & Easy was $305 million. [Related post - April 19, 2010: Tesco Reports Fiscal 2009 Results on Tuesday, April 20; Estimated $250-$259 Million Loss For Fresh & Easy]
This higher loss is troubling for Tesco because central to its strategy for Fresh & Easy is the concept that by adding numerous additional stores fairly rapidly, which it did over the last year, and thus increasing its sales volume, it would narrow the amount of money it's losing with Fresh & Easy.
Revenue did increase considerably (as you can see above) from fiscal 2008/09 -to- 2009/10 - primarily because of the numerous (about 30) new Fresh & Easy stores opened during the period, rather than via same-store-sales growth. But rather than decreasing, the fiscal 2009/10 dollar loss amount increased in 2009/10, over 2008/09, as detailed above.
Tesco CEO Terry Leahy said today the retailer expects its fiscal year 2010/11 loss for Fresh & Easy to be about the same as the $253 million for fiscal year 2009. Leahy added he believes the losses for Fresh & Easy have peaked, meaning he doesn't expect the fiscal year 2010 loss to be higher than the $253 million. Tesco's fiscal 2010/11 year began on February 28, 2010.
The CEO also announced today that Tesco plans to open 50 new Fresh & Easy stores in fiscal year 2010/11, which started on February 28 and ends in early 2011.
Tesco: Strong group revenue and profit
Tesco plc's profit for the fiscal year rose to 2.33 billion pounds ($3.58 billion) from 2.13 billion pounds ($3.22 billion) a year earlier.
Fiscal year 2009/10 revenue increased 5.6% to 56.91 billion pounds ($87.5 billion) from 53.9 billion pounds ($82.82 billion) in the prior financial year, which included one extra week.
[Click here for a complete summary of Tesco's fiscal year 2009/10 financials. Click here for an interview with Tesco CEO Terry Leahy, along with a webcast of the financial results.]
Fresh & Easy Buzz will be publishing a detailed analysis piece, focusing on the Fresh & Easy loss and Tesco CEO Terry Leahy's 50% sales increase projection for fiscal year 2010/11, at the end of the week. Stay tuned.
Monday, April 19, 2010
Tesco is debating whether or not to begin opening the first of its planned Fresh & Easy stores in Northern California later this year, or to further postpone its launch into the market until 2011, Fresh & Easy Buzz has learned.
Tesco first announced its plans to open an initial 37 Fresh & Easy markets in Northern California - 18 in the San Francisco Bay Area and 19 in the Sacramento-Vacaville region - in early 2008, not long after its first stores opened in Southern California, Arizona and southern Nevada. [Click here for a list by address of the 37 confirmed Northern California Fresh & Easy locations. There's also some additional, non-confirmed, planned locations we've discovered and reported on]
The first stores in these two Northern California markets were planned to be opened in mid-to-late 2008.
However, Tesco postponed its plans later in 2008, suggesting it would wait until 2009 to launch into the northern portion of the Golden State.
Again in 2009 Tesco postponed opening stores in Northern California, sighting the economic recession as its official reason for doing so.
To date, over two years after announcing its plans to move into the San Francisco Bay Area and Sacramento-Vacaville market regions, Tesco has yet to open any stores in the north state. It is and has been paying the monthly rent and related expenses on the planned locations for these two-plus years however.
Most of the 37 confirmed Northern California locations are vacant retail buildings in which Tesco's Fresh & Easy is or planned to remodel. A few of the sites are new, from the ground-up construction, such as the planned location at Third & Carrol Street in San Francisco and the planned site in Sacramento's Oak Park neighborhood, for example.
A handful of the 37 Northern California store sites, along with at least one non-confirmed store in Pacifica, near San Francisco, which is completed and has been sitting vacant for well over a year, could be opened in short order.
However, the majority of the planned Northern California store locations are still in various stages of remodeling and construction. And in many cases work has been on hold at the locations for a very long time.
Work on some of the planned Fresh & Easy sites, such as a vacant building to be remodeled in Napa, California, which was formerly a branch of three-store local independent grocer Vallergas Market, and the planned built from the ground up store in Sacramento's Oak Park neighborhood, for example, haven't had any work done on them at all to date.
We also know of one location - in the Edgewood Shopping Center that's being remodeled in Palo Alto, California, which Tesco's Fresh & Easy never confirmed but the developer did confirm to us in 2009 - that the retailer has now decided not to go forward with at all.
The project's developer told Fresh & Easy Buzz earlier this year that Tesco's Fresh & Easy pulled out of the project and that a new grocer-anchor is being sought.
At issue for Tesco is whether or not it wants to make the substantial investment required to launch into Northern California this year.
This major investment includes opening and staffing its planned distribution facility in Stockton, California, along with the labor costs to staff the stores it opens, plus marketing and all other related costs required of a grocer when it launches into a major new market region such as Northern California.
And since both the San Francisco Bay Area and Sacramento-Vacaville markets are big and very competitive, rest assured the start up costs for Tesco will be massive.
The costs also will be high for Tesco because it will be marketing for and distributing to only a handful of stores in Northern California for a considerable period of time. From a logistical and marketing perspective, a retailer needs critical mass - a significant number of stores - before it can achieve any efficiencies in terms of logistics and other costs.
For example, with over 150 stores (159 at the end of April) in Southern California, Arizona and southern Nevada to date, based on the current sales volume, which we estimate at about $500-$600 million annual, Tesco has yet to achieve the type of critical mass out of its Riverside County distribution center that it both wants and needs.
The issue regarding launching Fresh & Easy into Northern California this year at all then comes down to investment versus added losses for Tesco.
Tesco reports its fiscal year 2009 sales and profit numbers tomorrow, Tuesday April 20, 2010. The United Kingdom-based global retailer says it estimates the full-year loss for Fresh & Easy will be about $250-$259 million. This is on top of a fiscal year 2008 loss of $208 million. We estimate Tesco has lost at least $700 million on Fresh & Easy Neighborhood Market thus far. [Related post - April 19, 2010: Tesco Reports Fiscal 2009 Results on Tuesday, April 20; Estimated $250-$259 Million Loss For Fresh & Easy]
Tesco's dilemma therefore is: Should it launch into Northern California this year, which in our analysis will cost the grocer even more money than it anticipates it will, or should it continue focusing on its existing stores, and opening new ones, in its current Southern and Central California, Metropolitan Phoenix, Arizona and southern Nevada market regions?
But on the up side, if the recession is really the main problem with Fresh & Easy's performance to date, then the Northern California stores should be opened as soon as possible since, as we've said and has been true since 2008, Northern California, especially the Bay Area, has been hit far less by the recession than Southern and Central California, Nevada and Arizona have and still are experiencing.
The decision, which according to our sources hasn't been fully decided as of yet by Tesco, will depend on just how much of a loss the retailer hopes to post in its 2010 fiscal year, when it reports those numbers in April of 2011.
Our conclusion: We predict Tesco will start opening some of its Northern California Fresh & Easy stores in the mid-to-late-third quarter -to- early fourth quarter of this year - or before the end of its current fiscal year, which ends in early 2011.
Tesco Reports Fiscal 2009 Results on Tuesday, April 20; Estimated $250-$259 Million Loss For Fresh & Easy
The global retailer will likely report a full-year loss of about $250-$259 million for its Southern California-based Fresh & Easy Neighborhood Market fresh foods and grocery chain.
Tesco offered the $259 million top-end loss estimate for Fresh & Easy months ago.
Offering the loss estimate was a smart move on the part of Tesco since, in our analysis, it serves as a form of inoculation, which we predict will serve to take some sting out of the media reports tomorrow and the days to follow on what is a significant loss at Fresh & Easy.
Fresh & Easy by the numbers
However, if Tesco reports a loss for Fresh & Easy that's much higher than the estimated $259 million - say even $5 million -to- $10 million higher - that will be, in our analysis, very bad news for the global retailing giant.
We don't suspect that to be the case though. Rather, we estimate the global retailer will report a slightly lower number than the estimated $259 million for its Fresh & Easy chain, which will have 159 stores in California, Nevada and Arizona at the end of April.
Either way - slightly more than $259 million or slightly less - right now we don't see much daylight for Tesco in the next year in terms of significantly reducing its losses with Fresh & Easy. Based on the chain's performance to date, we anticipate similar losses for its 2010 fiscal year.
Tesco plc's 2009 fiscal year ended in February 27, 2010.
It reported a loss of $208.05 million for Fresh & Easy in its 2008 fiscal year.
We estimate Tesco has lost at least $700 million so far on Fresh & Easy. Tesco set up shop in the U.S. in 2006. The first Fresh & Easy stores opened in November 2007.
Net positive fiscal 2009 for Tesco
In terms of its overall reporting tomorrow, most financial analysts that follow Tesco plc are expecting positive results.
Consensus estimates by London and Wall Street stock analysts are that it will report a strong, year-over-year (2009 over 2008) sales increase of 9%, and a pre-tax profit rise of just over 6%.
Tesco could also report tomorrow that it has reduced its substantial corporate debt significantly. For the past year the retailer has been selling some of its UK stores and then leasing them back in a program designed to generate capital and reduce debt
Tesco plc, which is the third-largest global retailing chain based on annual gross sales, derives 70% of its profits from its UK stores. It's the leading food and general merchandise retailer in the UK, with a 31% market share.
It's also a major player in the retail banking, insurance and mobile phone sectors in the UK.
Limited reporting data for Fresh & Easy
Don't look for Tesco to report many specifics (key indicators) - such as same-store-sales (like-for-like in the UK) or gross margin - about Fresh & Easy tomorrow - other than the overall total dollar loss amount for the fiscal year.
Fresh & Easy Buzz will be offering some analysis on Tesco and Fresh & Easy after the retailer's reporting on Tuesday. Stay tuned.
[Readers: Click here for a complete selection of posts on the reusable shopping bag topic and issue from Fresh & Easy Buzz.]
Saturday, April 17, 2010
Tesco's Fresh & Easy on the Agenda Today at Cal State Fullerton Social Justice Summit in Southern California
But today, nestled among the various seminars and workshops on social action, grassroots organizing, community development, human rights and environmental issues at California State University Fullerton's 6th Annual Social Justice Summit in Southern California, one particular workshop stood out among all the others to Fresh & Easy Buzz: "Organizing for Respect, Dignity and Justice at Fresh and Easy Neighborhood Market," presented by Berny Enriquez of the United Food and Commercial Workers union.
The workshop - also billed as "Building Worker Power at Fresh and Easy," is being held from 11:30 am -to- 12:30 pm today in the Titan Student Union Building at the free, all day summit, sponsored by Cal State Fullerton's Volunteer and Community Service Center, which is located on the campus in Orange County.
The university center bills the annual event, which is attended by thousands of academics, political and religious leaders, members of organized labor, and regular citizens, as "providing a forum for people to exchange ideas about improving the state of our communities, offers space to dialogue about the obstacles to creating effective change, provides effective tools for social action, and offers tangible grassroots solutions."
The inclusion of the UFCW-Fresh & Easy workshop at today's event is interesting for a couple of key reasons.
First, it's the only workshop on the agenda at the Social Justice Summit that focuses specifically on an individual company - Tesco's Fresh & Easy Neighborhood Market.
Second, it's also the only workshop on today's agenda with a specific focus on organized labor and the organizing of non-union companies.
Both of these items are important in that (1) the UFCW chose Tesco's Fresh & Easy as the one out of the numerous (Walmart, Target, Whole Foods, Trader Joe's, for example) non-union food and grocery retailers it's attempting to organize to focus on at today's event; and (2) the organizers of the annual Cal State Fullerton Social Justice Summit invited the UFCW to present the Fresh & Easy organizing workshop at the event.
It's our analysis one of the reasons the UFCW has been less overt, particularly in Southern California where Tesco's Fresh & Easy is headquartered and where it has the majority of its stores, over the last year is because the retail grocery clerks' union has been putting more of a focus on building a grass roots, community-based coalition to help it achieve its goal of unionizing the grocery chain's store-level workers.
The participation in today's Cal State Fullerton Social Justice Summit is an example of these efforts. There have been other similar grass roots-type efforts of late for the UFCW.
Another reason, in our analysis, the UFCW has been less active in its Fresh & Easy employee organization efforts is because of the recession (high unemployment), coupled with the fact Tesco has been losing tons of money with its small-format, combination fresh foods and grocery chain. We estimate Tesco has lost at least $700 million on Fresh & Easy since 2006. The first stores opened in November of 2007.
Because of the high unemployment rates in California, Nevada and Arizona, where Tesco has its 152 Fresh & Easy stores, the UFCW took some flack for its very aggressive campaign in 2008 to early 2009. Since then the union has taken a much more low key approach in its efforts to organize the grocer's store-level workers, particularly on the public relations front.
However, the UFCW hasn't given up its efforts by any means, although many observers wonder why it went from such an aggressive campaign to such a low key one.
Tesco's Fresh & Easy was recently found by the National Labor Relations Board (NLRB) to have violated a section of the U.S. National Labor Relations Act, something we reported on in this March 4, 2010 story: Administrative Law Judge Finds Tesco's Fresh & Easy Violated Labor Relations Act in Ex-Store Employee, UFCW Union Complaint. Fresh & Easy says it plans to appeal the ruling.
Interestingly, the UFCW hasn't publicly gone after Tesco regarding the NRLB ruling. For example, the union hasn't issued a press release about the issue, nor has it used the ruling in its campaign to unionize Fresh & Easy in any demonstrable way.
Tesco Fresh & Easy's public position is that its store-level employees have the right to organize a union if they so desire, based on U.S. labor laws. However, the NRLB violation involves a lawsuit by a former Fresh & Easy employee who charged the grocer interfered with her right to do just that, which the judge in the case agreed was the case.
Thus far, there hasn't been a Fresh & Easy store where employees have called for an open ballot election for membership in the UFCW, which is the key step to being recognized as a union shop.
We predict once there's a marked improvement in the economies, particularly lower unemployment, of these three states - California, Nevada and Arizona - we will see a marked increase in the level and intensity of activity on the part of the UFCW in its Fresh & Easy organizing campaign.
Also look for increased efforts on the part of the union to build a strong, community-based coalition in Southern California, likely comprised of many of the organizations and individuals in attendance at today's Cal State Fullerton Social Justice Summit, as a way to improve its odds in organizing Fresh & Easy employees.
[Linkage: Click here for an extensive selection of past stories in Fresh & Easy Buzz about the UFCW union-Fresh & Easy topic and issue.]
Sunday, April 11, 2010
When it Comes to Fresh, Prepared Foods, New York City's Duane Reade is Simply 'deLish' for Walgreens
Walgreen Co. is - as of Friday, April 9 - officially the owner of New York's Duane Reade drug store chain, which with 258 stores in the New York City metro area is the number one drug channel retailer in the market.
All of its fresh, prepared foods items are made for and distributed to Duane Reade by local food vendors (like Eli Zabar) on a daily basis.
There's also a selection of manufacturer branded refrigerated fresh foods, along with a huge assortment of chilled beverages, in the stores' "grab-and-go" fresh foods area. Each store also has a fresh-brewed coffee station, like the one pictured below. Duane Reade's is a full-blown fresh, prepared foods program, not a mere hobby.
The stores look more like mini-supermarkets than they do traditional drug stores. (See below.) Think "channel bending" - one part small-format food store and one part convenience store, combined with a full drug store and pharmacy, with a fresh, prepared foods cherry on top. About all that's missing are fresh produce and traditional fresh meats. There are some convenience-type meats in the stores.
These newer and more-recently remodeled Duane Reade stores also feature an extensive selection of packaged foods, groceries, perishables and non-foods - which the chain has been adding in nearly all of its stores in various degrees depending on the available square footage of each respective store.
The key feature in these above product categories are Duane Reade's various food (and beverage) and non food private brands, which in our analysis and opinion are some of the best looking (design) and better quality store brands produced by retailers of any channel we've come across in recent times.
In fact, according to our sources, Walgreen Co. plans to speed up the process of putting fresh, prepared foods in the Duane Reade stores. It also plans to use the Duane Reade program as the blueprint for testing the sales of the ready-to-eat and ready-to-heat foods in some of its existing 70 Walgreens banner stores in New York City, starting fairly soon.
Walgreen Co. has lots of stores in both these cities (328 in New York City, population 13 million) and 64 in San Francisco, population 900,000) resulting in what in our analysis is an excellent formula for fresh, prepared foods retailing. That formula: Dense urban markets/ lots of people on the ground x having a high store count in such markets = a good grab-and-go prepared foods market. (The Walgreens store above is in San Francisco's South of Market neighborhood)
Thursday, April 8, 2010
The Branded 'Signature Cafe' in Safeway Stores' Soon to Open 'Social Safeway' in Washington D.C. Should Turn A Few Heads
Safeway Stores' soon to open (May 6), completely remodeled (now 71,000 square foot) supermarket in Washington D.C's Georgetown neighborhood (pictured above) will include arguably the grocery chain's largest and most elaborate in-store branded "Signature Cafe" deli and fresh, prepared foods store-within-a-store to date.
In fact, take away the dry grocery, non-foods and fresh meat and produce departments, and it looks almost like Safeway's "The Market" prepared foods-focused small store format, two stores of which currently exist in Long Beach (opened in May 2008) and San Jose, California (opened in August 2009) respectively.
Of course, that's no accident: Safeway's Signature Cafe prepared foods brand, which the grocer has now extended as a brand for the deli and prepared foods departments in some of its newest built-from-the-ground-up and remodeled stores, is in large part the inspiration for its "The Market" small-format grocery stores.
And like Walmart, which is branding the deli and prepared foods departments in some of its supercenters and Neighborhood Market supermarkets "Marketside" - named after its small-format, fresh, prepared foods-focused stores and fresh, prepared foods brand of the same name - Safeway has figured out that a grocer doesn't need to build a small-format store all its own to be in the "store branded" ready-to-eat and ready-to-heat fresh foods business.
Rather, since both chains have existing mega-real estate in the form of thousands of U.S. stores, why not put that prepared foods store - be it "Signature Cafe" or "Marketside" - in existing stores, in the form of a branded store-within-a-store deli/prepared foods department and cafe.
The "Signature Cafe" in the soon to open two-story Georgetown Safeway (its Lifestyle format) store (pictured above), also called the "Social Safeway" because of the 'who's who' of Washington DC politicos and others that shop there, is indeed both a real eat-in cafe and a prepared foods store-within-a-store.
It's jam-packed with ready-to-eat and ready-to-heat fresh, prepared foods of all kinds. There's all of the Signature Cafe store brand ready-to-heat packaged entrees and side dishes, merchandised in self-serve refrigerated cases, for example.
There's also fresh, prepared foods (salads, entrees, snacks, sides and more) and deli items (lunch meats, cheeses and the like of every kind) merchandised in bulk, behind full-service cases. It's old fashion deli meets new-age self-serve prepared foods shop.
Add a mini-pizza parlor with fresh baked pizzas, a sandwich bar, and an Italian gelato bar to the mix.
There's also grab and go sections for other foods and beverages, along with separate pay stations, so that customers using the "Signature Cafe" don't have to use the store's central check outs in order to pay for foods they either eat-in or take-out. Think that store-within-a-store concept.
Additionally, there's a modern wood burning fireplace in the "Signature Cafe." Around the fireplace are numerous tables and chairs where customers can sit and eat. There's wide-screen flat-panel television screens and free WiFi in the cafe, which also has a balcony with a view of busy Wisconsin Avenue.
Of course, such features are only fitting for a store nicknamed the "Social Safeway."
Safeway closed the Georgetown store a little over a year ago for the remodeling. When it opens on May 6, we think its "Signature Cafe" deli and fresh, prepared foods store-within-a-store will turn a few heads, including perhaps a few in the food retailing industry.
Friday, April 2, 2010
Fresh & Easy plans to launch the EatWell line in its stores on April 7.
Among the 17 varieties of ready-to-eat and heat prepared meals and sides in the new EatWell line include: Salads, like the Market Salad pictured at the bottom of the piece; and ethnic dishes, such as the Singapore Style Noodles, pictured at top; and the Latin Arroz Con Pollo meal, pictured below.
Most of the EatWell items will retail for about $3.99 and slightly below, accept for a couple of higher-end fresh salmon ready-meals - a 12 ounce Honey Dijon Salmon entree and a 12 ounce Teriyaki Salmon meal - which will sell for about $4.99 each.
The EatWell brand ready-meals and side-dishes contain less than 25% of the average daily requirement in fat, sodium, and calorie contents, based on a 2,000 calorie per day diet, according to the grocer.
In our report we noted Fresh & Easy was holding a preview and tasting of the line last night for a selected group of people. And the grocer did just that.
Many of the people attending the event last evening were personal bloggers, targeted by Fresh & Easy in the hope they will write about the event and the new EatWell fresh, prepared foods. Today, Tesco's Fresh & Easy is announcing the new fresh, prepared foods line on its Twitter.com feed.
One of those personal bloggers, Oakley Boren, who publishes the Fresh & Easy Neighborhood Market fan blog "Temple of Fresh & Easy," attended the EatWell brand preview and tasting last night at the grocer's headquarters in Southern California.
Today she published some photographs of the new EatWell line, along with additional pictures from the event, on her flickr.com site.
Additionally, Fresh & Easy previewed some new Fresh & Easy brand food and grocery items at the event last night. There are a couple photographs of those new items on the site.
Click here to view the all photographs.
[Photo credit: Photos are courtesy of Oakmonster.]
Thursday, April 1, 2010
Fresh & Easy is previewing the new prepared foods line to a pre-selected group of people this evening at its Southern California headquarters.
The new EatWell brand and line differs primarily from the grocer's current Fresh & Easy brand of prepared foods items in that it has less sodium and fewer calories than the grocer's current fresh, prepared foods items do.
The primary product focus of the new brand and line is on ready-to-heat prepared meals and side dishes, or as Fresh & Easy refers to them in the British vernacular, ready-meals.
If the EatWell fresh, prepared foods line does well, Tesco's Fresh & Easy could extend the brand into other product and store categories.
The British government's Food Standards Agency also publishes a graphic guide called "the eatwell plate" (pictured above), which depicts how much of what foods from each food group people should eat in order to achieve a healthy and balanced diet. Among the health guidelines offered include suggested caloric and sodium levels. (Double-click on the graphic to enlarge it.)