Sunday, October 31, 2010

Employee Creativity Runs Rampant at Fresh & Easy Neighborhood Market's Halloween Great Pumpkin Carve-Off

Halloween is a holiday that employers and employees can and do celebrate in a number of fun and creative "out of the box" ways in the workplace.

For example, there's the employee Halloween costume contest, which can include office "trick or treating," although one has to be careful about the trick part, since everybody has to work together once Halloween is over. Plus, HR likes to keep a close eye on those tricks.

And of course there's what just might just be the most creative Halloween workplace event of all - the pumpkin or Jack O' lantern carving contest, which allows employees or teams of employees to test their creative juices by designing something from a blank slate - a pumpkin or a gourd. Along with being a creative exercise this "out of the gourd" Halloween tradition is also a good team-building - not to mention fun - exercise.

It was just this festive Halloween-themed event, a pumpkin carving contest - the "Fresh & Easy Great Pumpkin Carve-Off," to be precise - that employees who work at Fresh & Easy Neighborhood Market's corporate headquarters office in El Segundo, California engaged in last week, as a lead up to Halloween today.

The employees broke up into numerous teams for the contest. The judges named one first-prize winning team, and four employee teams received runner up honors. All the pumpkins are very creative pieces of work. Since pictures most often speak louder - and in this particular case better - than words, we present the winners below.

"The Pie Man" (above), who by all indications looks to be a Fresh & Easy Neighborhood Market shopper and follows the grocer's weekly advertising circular closely, took first place in the pumpkin carve-off contest. It looks like it was a solid (as opposed to custard) team effort.

This Fresh & Easy Neighborhood Market headquarters office employee team transformed its pumpkin into a Fresh & Easy fresh food and grocery store, complete with the green "Now Open" sign above the entrance. We aren't sure who the man in front is - perhaps the store manager? But the three-wheel bicycle heading to the "store" is a version of a real three-wheeler Fresh & Easy uses as part of its "green" retailing marketing and promotion.

Similar to the team above, this employee team used its pumpkins (the only team of the five using more than one) as a canvas on which to etch facsimiles of Fresh & easy grocery stores. But as you can see, this team added some mock fresh&easy private brand products as a way to play up its "Haunted Fresh & Easy" store theme. We're betting there were at least a couple Fresh & Easy Neighborhood Market buyers/merchandisers on this team, hence the product inclusions.

Our first thought when we saw this photograph was that an executive from Tesco's global headquarters in the United Kingdom was paying a visit to Fresh & Easy's corporate office in El Segundo. The suit does have a Savile Row look to it after all. But on second look we determined it's more likely the "Ghost of Halloween and Christmas Past," based on the combination of the white pumpkin for his head and the Santa hat on top. This team was doing some real "out of the gourd" thinking.

This Fresh & Easy employee team incorporated Fresh & Easy's signature clock logo in its witch-themed design. We wonder if they were shooting for a vote from Tesco director and Fresh & Easy Neighborhood Market CEO Tim Mason, who it's said is a huge fan of the clock logo.

Saturday, October 30, 2010

Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line

Private Brand Showcase: Fresh-Prepared Foods

Sacramento, California-based Raley's Supermarkets is this week introducing a new line of 23 varieties of pre-packaged, refrigerated fresh-prepared meals, entrees, side-dishes and related items under the 'Raley TO GO' brand.

Below is a list of the 23-SKUs in the new 'Raley's TO GO' pre-packaged refrigerated, ready-to-heat foods line:

Single Serve Meals
• Grilled Chicken Breast with Mashed Potatoes & Gravy
with Tender Vegetables
• Italian Style Breaded Chicken Breast Cutlet & Linguini
• Cheese Stuffed Shells with a Rustica Tomato Sauce
& Tender Mixed Vegetables
• Cheese Bandolini Pasta in Chardonnay Tomato Cream Sauce
with Tender Green Beans
• Verde Chicken Enchiladas (2-count)
• Red Chili Chicken Enchiladas (2-count)

Side Dishes
• Green Beans in Garlic & Chive Butter
• Broccoli Rice & Cheese Casserole
• Roasted Yukon Basil-Parmesan Potatoes
• 5 Cheese Macaroni & Cheese
Noodle Bowls

• BBQ Pork & Vegetable
• Grilled Chicken & Vegetable
• Beef & Shiitake Mushroom

Rice Bowls
• Grilled Teriyaki Chicken
• Yellow Curry Chicken
• Red Curry Chicken

Pasta Tosses
• Tuscan Style
• Asian Style
• Southwest Style
• Chicken Caesar
Family Entrees
• Grilled Chicken Penne Alfredo with Broccoli
• Italian Style Spaghetti & Meatballs
• Classic Beef Lasagna

Raley's, which is an innovator and pioneer among U.S. grocery chains in the fresh-prepared foods category, is promoting its 'Raley's TO GO' line launch extensively.

For example, this week the Sacramento-based family-owned grocery chain, which operates 133 stores in Northern California and northern Nevada under the Raley's, Bel-Air, Nob Hill Foods and Food Source banners, is featuring all 23 varieties of the pre-packaged fresh-prepared foods items in a promotion, which includes special price points - $5 each for all of the items except the family size entrees, which are $10 each - along with an added bonus: When shoppers buy any four packages (mix and match) of the $5 retail items (20 SKUs total)they get a fifth one free.

The $10 each family size meals provide four-six servings, according to the packaging. All of the items are designed to take about two and one half minutes to heat in a microwave oven.

In addition to promoting its new pre-packaged fresh-prepared foods line in its weekly advertising circular, Raley's has displays featuring the 'Raley's TO GO' products, along with colorful point-of-purchase signage in the refrigerated fresh deli sections, where the items are merchandised, in all of its stores.

Raley's is also promoting the new line on the radio, such as the promotion it's currently doing with Sacramento-based radio station KYMX. The promotion, which has been running since Wednesday, offers listeners a chance to win four free 'Raley's TO GO' meals each day. The meal includes one entrée and two side dishes.

The new fresh-prepared foods line was created by Raley’s corporate chef, Evelyn Miliate, who says about her inspiration for the products: "As a mom, I understand the need to have quick and easy dinner solutions that I can rely on. With Raley’s To Go, I can feel good about feeding my family food that I know they will love – and at a great value."

The "mom" mention in chef Miliate's quote dovetails with Raley's current positioning and marketing campaign focus, which is called "It's A Mom's World" (Raley's is, that is), and based on its Mom's World Panel, which is a volunteer group of mothers the grocer has assembled to provide the grocery chain with input, ideas, dialogue and feedback. Raley's has a special Facebook page and Twitter feed for its Mom's World Panel, as well as devoting this special section on its website to the group and campaign.

Raley's, which was founded by the late Tom Raley in 1935 and is still family-owned - his daughter Joyce Raley-Teel is the chairman and majority owner and her son Michael Teel is CEO - was one of the first movers among U.S. grocery chains in terms of getting into the ready-to-eat and ready-to-heat fresh-prepared foods category. It's been one of the food retailing leaders in the category since then.

Since the 1980's Raley's has offered an extensive selection of fresh-prepared foods in its stores. That offering has grown even more extensively in terms of the variety of fresh foods available. For example, the stores feature everything from simple ready-to-eat grab-and-go items like sandwiches and salads and ready-to-heat comfort foods, to a wide-variety of prepared ethnic foods and complete restaurant-quality gourmet dinners.

Raley's merchandises its fresh-prepared foods in both bulk deli-case-style form and pre-packaged. For example, sandwiches can be bought pre-packaged our ordered from the deli counter, where a clerk makes them by hand sandwich shop-style. Salads, meals, entrees and side-dish items are also available in both bulk and pre-packaged forms.

The 'Raley's TO GO' line of pre-packaged fresh, refrigerated foods is clearly designed to tap into the "on the go" shopper who doesn't want to order and wait at the deli counter for her fresh-prepared foods purchases. Raley's already offers numerous ready-to-eat and heat pre-packaged foods items, as mentioned above, but the new 23-item line is the most extensive introduction of convenience meals and related items the grocer has launched to date, based on our long time observation of Raley's.

United Kingdom-based Tesco's incoming CEO Philip Clarke (March 2011), who's currently head of the global retailer's international operations in Europe and Asia but not its Fresh & Easy Neighborhood Market fresh food and grocery chain in the U.S. (Tim Mason is CEO), said in an October 6, 2010 conference call reporting the Tesco plc's half-year sales that one of Fresh & Easy's advantages in California, Nevada and Arizona where it has its 168 stores is that the competition doesn't have the fresh-prepared foods offering that the Tesco-owned chain does.

Taking his statement as face value, that it isn't spin, which we do, it would appear Clarke isn't getting good competitive intelligence from Fresh & Easy Neighborhood Market headquarters in El Segundo, California when it comes to the fresh-prepared foods category and its competitors.

Additionally, based on his October 6 statement, it would also appear Clarke's not directly familiar with the numerous competitors (and soon to be competitors in Northern California in early 2011) to Fresh & Easy - Safeway/Vons, Walmart, Ralphs, Fry's, Raley's, Whole Foods Market, Trader Joe's, Bristol Farms, Bashas, Sprouts Farmers Market, Henry's Farmers Market (we could go on but will stop there) that offer extensive fresh-prepared foods selections in their respective stores and continue to add more variety and quantity to the offerings.

Memo to incoming Tesco CEO Philip Clarke: It's a fresh-prepared foods competitive jungle out there. Fresh & Easy's competitors in the category are many - and growing. Fresh & Easy has a good category offering - but it's just one among many competitors.

Raley's new 'Raley's TO GO' line of 23 varieties of pre-packaged fresh-prepared foods is merely one example of this growth, along with the continuing development in the category among grocers throughout the U.S.

Recent Private Brand Showcase Features

October 16, 2010: Fresh & Easy Neighborhood Market 'Bags' the Humble and Nutritious Plantain For A New Snack Chip Item

October 16, 2010: Fresh & Easy Neighborhood Market's Private Brand Kids' Cereal Wins Bronze 'Pentaward' in 2010 Packaging Design Competition

October 9, 2010: 'Use Me': Should Reusable Packaging Be Part of Tesco's Sustainable Private Brand Offering? A Student-Designer Thinks So

September 27, 2010: First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week

September 4, 2010: Fresh & Easy Neighborhood Market Unveils New fresh&easy 'goodness' Brand Items and Packaging

August 29, 2010: Fresh & Easy Neighborhood Market Expanding its fresh&easy 'goodness' Co-Branded Line; Launching Numerous New Items

August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category

July 21, 2010: 'Sipsational' & 'Quenchtastic': Safeway Introduces New 21-Flavor Line of Soft Drinks Under 'refreshe' Private Brand

July 17, 2010: New Fresh & Easy Neighborhood Market Clock-Shaped Private Brand Candy Line Hits the Shelves at Fresh & Easy

July 12, 2010: Tesco Launches Private Brand 'Lasagne Sandwich' in the UK Today...With No Apologies to The Earl of Sandwich

June 24, 2010: New Fresh & Easy Clock Logo-Shaped Candies Are A Pretty Sweet Idea

May 11, 2010: Tesco Might Want to Get 'fresh & naked' at 'fresh & easy'

April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7

April 11, 2010: When it Comes to Fresh, Prepared Foods, New York City's Duane Reade is Simply 'deLish' for Walgreens

February 22, 2010: Food, Drug Retailers With Stores in California, Nevada & Arizona Honored for Private Label-Store Brands' Excellence

Friday, October 29, 2010

CEO Kevin Davis, Execs and Investment Firm Buy Upscale Southern California Bristol Farms Chain From Supervalu, Inc.

Actress Halle Berry, who's a regular customer at the Hollywood, California Bristol Farms store at 7880 West Sunset Boulevard, will likely be happy to learn the upscale grocery chain isn't going away and is now back in local control. The photo of the casually dressed actress leaving the store was taken on June 3, 2010 by Hollywood celebrity blogger You can see the Bristol Farms logo on the grocery bags in her cart. Ms. Berry appears to be a paper and not plastic (or reusable) user when it comes to her grocery bag of choice. Based on the contents of her shopping cart, Halle Berry also appears to be a good customer for the upscale grocer when it comes to the house plant category.

From Twitter-to-the-Blog: Southern California Market Region Report

On July 22, 2010 we tweeted the following (reproduced in italics below) to Natalie Berg, an analyst with London-based retail research firm Planet Retail. The Tweet: @Natalie_Berg: Keep it under your beret: There is some talk about a possible senior exec w/investor or a grocery wholesaler participation buyout of BF (Bristol Farms) 3:09 PM Jul 22nd]

Our Tweet was in response to one Ms. Berg, who covers both the UK and U.S. retailing scenes for Planet Retail (and who offers insightful Tweets), posted on July 13, in which she wrote: "@Natalie_Berg Just updated SuperValu forecasts. Bristol Farms now classified as "other" and they are quietly selling off stores. Do I smell a divestment? 8:23 AM Jul 13th."

Then Supervalu, Inc.-owned Bristol Farms didn't sell any stores in 2010 but it has closed four stores in Southern California since it acquired the chain in 2006 from then Boise, Idaho-based Albertsons Inc. Those stores were located in Valencia, Woodland Hills, Redondo Beach and Mission Viejo.

Today Supervalu, Inc. announced it has sold the upscale 14-store Bristol Farms division to chairman, president and CEO Kevin Davis and a group comprised of 17 other executives and management members, who've acquired the division in partnership with private equity firm Endeavour Capital, which takes its name from the H.M.S. Endeavour, the ship that was piloted by noted explorer James Cook. Endeavor Capital has offices in Portland, Oregon, Seattle, Washington and Los Angeles. The new ownership team takes over today, Supervalu said.

Thirteen of the 14 stores operate under the Bristol Farms banner. One is a Lazy Acres banner natural foods market. It's in Santa Barbara. Twelve of the Bristol Farms banner stores are in Southern California. One Bristol Farms store is located in the Westfield San Francisco Centre at 845 Market street in downtown San Francisco.

Supervalu operated Bristol Farms, which is headquartered in the Southern California city of Carson, as an autonomous division, hence Kevin Davis' various senior-level titles.

Bristol Farms has also operated independently from Supervalu in terms of its procurement, continuing its previous policy of buying from Southern California-based retailer-owned cooperative grocery wholesaler Unified Grocers. Under its new ownership, Bristol Farms' CEO Davis says it will continue its long relationship with Unified, which he has been a board member of in the past.

Davis, along with Bristol Farms' executive vice president Sam Masterson and the 16 other employees will own a percentage of the specialty grocery chain along with Endeavour Capital, which has a track record of investing in grocery chains like Idaho-based WinCo Foods, Oregon-based New Seasons Market and others. [The private equity firm's investment portfolio is a varied one. You can view the companies it's invested in here.]

Interestingly, both WinCo Foods, which Endeavour Capital sold its stake in earlier this year, and New Seasons, which the firm invested in only last year, are both employee-owned food retailers, as Bristol Farms now is, at least to a limited degree (18 employees). WinCo has been employee-owned (except for a small percentage which is held by investors) for many years. New Seasons changed from private ownership to employee-ownership earlier this year.

Kevin Davis has been with Bristol Farms, which was founded by partners Irv Gronsky and Mike Burbank with a single store in Rolling Hills, California in 1982, for 14-years. Early in his career at Bristol Farms Davis was the head-buyer/merchandiser for the upscale Southern California grocery chain, which is a pioneer in specialty grocery retailing not only in Southern California but nationally.

Davis has an extensive background in the food retailing business in Southern California, including working as a store manager, district manager, corporate vice president of sales and advertising and senior vice president of marketing at Ralphs, which is the largest grocery chain in the region. He first went to work as a grocery clerk for Ralphs in 1974.

Bristol Farms has been the step-child of its two most recent corporate owners - Boise, Idaho-based Albertsons Inc., followed by Supervalu, which obtained Bristol Farms as part of its 2006 joint-acquisition of Albertson's Inc. in partnership with private equity firm Cerberus Capital Management. Cerberus owns Albertsons LLC. For example, the Albertsons stores in Southern California are owned and operated by Supervalu, Inc. But the Albertsons stores in Arizona are a part of Cerebus' Albertsons LLC.

Albertsons Inc., which is now part of Supervalu, Inc., bought Bristol Farms in 2004 from Los Angeles-based investment firm Oaktree Capital Management For $137 million, specifically as a play to enter the upscale specialty food retailing niche.

At the time the then Boise, Idaho-based chain said it planned to grow Bristol Farms not only in Southern California but would expand it geographically into other parts of the U.S. However, those plans never materialized. In the two years it owned the specialty grocery chain, Albertsons Inc. opened a few new Bristol Farms stores in Southern California and bought the Lazy Acres store in Santa Barbara (in 2005). But only one Bristol Farms' store opened outside of Southern California, the unit in San Francisco, which was opened in 2006, shortly before Albertsons Inc. was acquired by Supervalu and Cerberus.

When Supervalu, Inc. obtained Bristol Farms in the Albertsons Inc. acquisition, it too talked about expanding the upscale chain, both in terms of opening new stores in Southern California and in Northern California and potentially expanding geographically. That never happened either under its ownership. From 2006-2010 three former Southern California Albertsons units - in the Westchester neighborhood in Los Angeles, Palm Desert and La Jolla - were converted to Bristol Farms stores, and a new store in Valencia was opened in November 2008, but that's about it in terms of expansion. The Valencia store was closed in late February of this year due to poor performance

At its high point, Bristol Farms operated 17 stores under the banner of the same name. The closing of the four stores - Valencia, Woodland Hills, Redondo Beach and Mission Viejo - brought the store count down to the current 13 Bristol Farms units.

Being free from Supervalu's corporate ownership should allow Kevin Davis and company to get back to what Bristol Farms historically has done well: Innovative specialty food retailing with an independent grocer's local touch. The Bristol Farms stores offer a full-selection of basic food and grocery items but put a major focus on specialty, gourmet and natural food and grocery offerings across all categories, including fresh-prepared foods.

With its backing from Endeavour Capital we also expect to see Bristol Farms' selectively open new stores in a measured way, primarily in Southern California but perhaps out of the region as well. For example, Davis has long been interested in Northern California. And with just one store in the region, in San Francisco, there's certainly plenty of room to grow, particularly in the San Francisco Bay Area where Bristol Farms' brand of upscale specialty food retailing has a following in selected, higher-income communities and neighborhoods.

Additionally, with only the one unit in the Bay Area, it's difficult to do much in the way of cost-effective marketing and merchandising since the economies of scale aren't there for Bristol Farms with just the single-store in San Francisco.

Over the years there's been talk about closing the San Francisco unit. However that's not happened. This fact offers another good reason why it could make logical sense for the "new" Bristol Farms to look north for future stores.

Unified Grocers, Bristol Farms' supplier, also has a division in Northern California, which supplies the one store in San Francisco. As such, supplying additional stores in the region would pose no problem and would be seamless.

In fact, Unified Grocers is breathing much relief that Davis and company has acquired Bristol Farms, which means the wholesaler will be able to continue to supply the 14 stores, which provides a healthy amount of revenue for the retailer-owned wholesale grocer. For example, had Supervalu sold Bristol Farms to a self-distributing chain instead of the employee group and Endeavour Capital, that would likely have ended the supply agreement with Unified, or at least limited it.

We know this to be true because over the summer our sources - the same ones that informed our July 22, 2010 Tweet to Ms. Berg - told us Unified was considering investing with Davis and the other Bristol Farms executives if doing so was required to keep the chain independent. Having once owned Bristol Farms as part of a then move to own and operate retail grocery stores along with being a wholesaler, Unified wasn't crazy about doing so, but was considering it. However, with the backing of Endeavour Capital, such a move wasn't needed.

Look for a new round of interesting food and grocery retailing to come from the "new" Bristol Farms.

First off though the new owners have some top and bottom line concerns to address, as the recession has hurt sales at the upscale chain as many of Bristol Farms core customers have been trading down to more mid and lower-priced grocers like Kroger's Ralphs and Safeway's Vons, along with others.

Additionally, the competition in the upscale and specialty niche in Southern California has and is only getting more competitive. Whole Foods Market and Trader Joe's, for example, continue to add stores in the region. And hybrid niche players like Sprouts Farmers Market, Henry's Farmers Market and Tesco's Fresh & Easy continue to open numerous new stores throughout Southern California, including in cities where the 12 Bristol Farms stores are located.

Davis and his team are creative and innovative grocers though. As owner-executives who now have a personal financial interest in Bristol Farms' success and growth, coupled with Endeavour Capital as an investment partner, which understands the grocery retailing business because of its track record in the industry, and freed from being a step-child of Supervalu, Inc., things should be looking nowhere but up for Bristol Farms in the months and years to come.

And thanks in part to Twitter and Ms. Berg - but particularly to our sources - we pretty much had the acquisition deal story nailed over three months ago in our July 22, 2010 Tweet.

Suggested additional reading

April 29, 2010: Heard on the Street: There's Something About Albertsons ... In Southern California

June 27, 2010: The Insider: Will Tesco Acquire Supervalu, Inc. and Change its 'Fresh & Easy' Game in America?

October 18, 2010: Supervalu's Small-Format, Hard-Discount Save-A-Lot Food Stores Chain is California Bound

Notes to above:

>In the April 29 piece linked above our 'The Insider' columnist offered a strategy for Supervalu, Inc. in Southern California. He also noted a possible sale of Bristol Farms.

>In our October 18 story linked above we reported on and detailed Supervalu's push with its small-format Save-A-Lot chain in California. Cash from the sale of Bristol Farms will help fund that strategy.

>'The Insider' also mentions Bristol Farms in his June 27 column linked above. By the way, he says a Tesco acquisition of Supervalu, Inc. isn't in the cards at present. He will have an upcoming column on the topic soon.

Thursday, October 28, 2010

Beverage Company Reed's and Fresh & Easy Neighborhood Market Launch Month-Long Cooperative Radio Advertising Campaign

Listen to the Reed's/Fresh & Easy 30-second radio spot here.

Promotions & Promotional Merchandising

Los Angeles, California-based beverage and natural products company Reed's, Inc. has launched a cooperative radio advertising campaign in Southern California in partnership with Tesco's Fresh & Easy Neighborhood Market for its Reed's Ginger Brew and Virgil's Root Beer.

The radio advertisement is a 30-second spot focusing on a new in-store promotion at Fresh & Easy Neighborhood Market to support literacy. Winners get books donated to their public schools of choice.

The radio advertising campaign, which is a first for Reed's, runs October 27-November 23 on Clear Channel's Los Angeles 104.3 MYfm radio station.

Chris Reed, founder and chairman of Reed's, Inc., says he hopes the radio campaign will reach four million listeners via Clear Channel 104.3 MYfm during its nearly month-long run.

"This is the first time we will advertise our brands on the radio. We’re thrilled to be working with Fresh & Easy and Clear Channel Communications, the largest radio station owner in the U.S. for this media campaign, Reed says. "We are highlighting our relationship and a program with Fresh & Easy Neighborhood Market. Their focus on quality and freshness is a perfect fit for Reed’s and Virgil’s all natural beverages with their refreshing, delicious and wholesome great taste. We’re excited to be working with Fresh & Easy as they position themselves to become one of the top supermarket retailers in the United States."

Displays in selected Fresh & Easy stores feature the free books for school promotion, which is being touted in the Reed's/Fresh & Easy radio spot. (Listen to the spot using the link at the top.)
The free books for schools promotion ties-in with Fresh & Easy's 'Shop for Schools' program, which is currently going on in all the retailer's stores.

Reed's, Inc. brews six flavors of its Reed's Ginger Brew soda: Original, Extra, Premium, Raspberry, Cherry, and Spiced Apple. There are four varieties of Virgil’s soda's: Root Beer, Cream Soda, Black Cherry Cream Soda and Real Cola Connoisseur.

The company also makes and markets a variety of other beverages products, including: China Cola, Sonoma Sparkler, Energy Elixir, Reed’s Rx. Reed's also produces and sells Ginger Candy and Ginger Ice Cream.

Reed's Ginger Brew and Virgil's sodas were introduced in the 168 Fresh & Easy stores in California, Nevada and Arizona in August.

The cooperative radio advertising campaign, which is funded by Reed's, along with the in-store free book promotion, is a good example of leveraging external media, in this case radio, with in-store promotional merchandising, which is something we first started suggesting Tesco's Fresh & Easy needs to do on a regular basis about a year and a half ago. (See the stories linked at bottom.)

Beginning this year Fresh & Easy has been doing just that, conducting promotions, including leveraging various media sources with in-store promotional merchandising on a much greater scale than it did in 2008 and 2009, which we've noted in a number of stories in Fresh & Easy Buzz, like those linked below.

Related Stories

April 25, 2010: Thousands Get 'Cheesy' at Fresh & Easy Neighborhood Market Co-Sponsored Grilled Cheese Competition in Los Angeles (Note: This promotion was initiated by a Fresh & Easy store manager.)

Wednesday, October 27, 2010

Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group

The Insider - Heard on the Street

Bob Piccinini (at left), the majority-owner, chairman and CEO of Modesto, California-based Save Mart Supermarkets, has achieved far more than he likely imagined he would growing up as the son of an independent grocer in Modesto, where he was born and raised and returned to after doing a stint in the military and graduating from the University of San Francisco.

For example, when Piccinini took over as CEO of Save Mart in the 1980's, there were about 40 stores, all located in Modesto and in a few surrounding cities. Today, under his leadership, Save Mart, which operates 240 stores under the Save Mart, Lucky, S Mart and Food Maxx banners, is the largest privately-held grocery chain in California and in the top 10 nationally, with annual sales in the $5 billion range.

And Lucky, which Save Mart acquired a few years ago (former Albertson's Northern California) is the number two market share leader in the nine-county San Francisco Bay Area, behind number one Safeway Stores. Apparently Piccinini paid attention to the region all those many decades ago while he was attending the Jesuit-run University of San Francisco.

Along with selling groceries and building a business, Piccinini's other vocation and advocation has been sports. In his lifetime he's owned two minor league baseball teams: What in the 1980's and 90's was the then Oakland A's-affiliated Modesto A's (it's now the Modesto Nuts and not affiliated with the A's) and after that for a time the San Francisco Giants' Fresno, California-based minor league team. It's been a number of years since he has owned either team.

Bob Piccinini has also lead Save Mart into numerous sport-oriented sponsorships. For example, some years ago he put together a group of vendor-investors, including Pepsi, that along with the grocery chain provided much of the money to build the "Save Mart Center" on the Fresno State University campus. The combination indoor sports arena (college basketball, ect.) and entertainment venue was named after the grocery chain in return for Piccinini and company's financing a significant portion of the cost of the multi-million dollar facility.

For many years Save Mart also sponsored the California Relays in Modesto, which before they were ended a few years ago was one of the oldest and most prestigious Olympic-qualifying track and field events in the U.S.

In the 1990's, Piccinini and entertainment industry executive Peter Guber, who's now CEO of Mandalay Entertainment Group, along with a few other investors, made a deal to buy the Oakland A's, a deal that would have put Piccinini in the "Bigs."

Guber has said publicly it was a done deal, saying he and Piccinini bought the A's and signed the deal with the team's then owners, including offering A's baseball guru Billy Beane the position of general manager with an equity piece, which he accepted.

The investment partners had the plug pulled out from their deal though at the last minute, when Baseball Commissioner Bud Selig came up with an idea to merge the A's and the Minnesota twins, something the didn't end up happening.

Guber, who is said to love sports and entertainment in the same way Piccinini loves selling groceries and sports, went on to create Mandalay Baseball Properties, which now owns seven minor-league baseball teams. The most recent acquisition, the Oklahoma City RedHawks, the Triple-A affiliate of the Houston Astros, came last month.

The Mandalay Entertainment Group CEO is using Mandalay Baseball Properties as the base for what he hopes will be a mega-synergistic entertainment-sports empire. It makes sense: What's more logical from a business perspective than entertainment and sports, after all. And adding supermarkets, particularly a chain with numerous stores in just the right markets, could add considerably to that synergy.

Last July, Guber and Joe Lacob, a partner at the noted Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, made the winning bid to buy the Golden State Warriors basketball team, agreeing to pay owner Chris Cohan $450 million for the Warriors, which is the only professional basketball team in the San Francisco Bay Area, home to nearly seven million people.

The $450 million is the highest price paid for an NBA team in the league's history.

The investment partners snatched the Warriors away from a very heavy hitter and deal maker, Larry Ellison, the multi-billionaire founder, chairman and CEO of Oracle, who was neck-to-neck with the partners until the very final leg of negotiations with Warriors owner Cohan. The arena in Oakland where the Warriors play their home games is sponsored by and named after Oracle.

Approval of the deal by the NBA has sat on the shelf since then.

However, on Friday, October 22 NBA Commissioner David Stern told Comcast SportsNet Bay Area that winning bidders Joe Lacob and Peter Guber would own the Warriors within a week. Stern, who has a track record of following through on his words, said there's a "signed contract," and that the "deal will close" by the end of this week.

On Tuesday, October 19, I "tweeted" the following missive on Fresh & Easy's Buzz's twitter feed: "From #LasVegas #1: #Savemart Supermarkets owner #Bob Piccinini appears set to join the ownership group buying the #GoldenStateWarriors. via web ."

There have been rumors for a number of weeks that Save Mart owner and CEO Bob Piccinini was considering joining Guber and Lacob as an owner of the Warriors once the NBA approved of the sale.

However, they've mostly been rumors. And I didn't know what to make of them.

But my source, the person who told me Piccinini is in, and told me so just four days before NBA Commissioner Stern announced the sale would be final by the end of this week, is a very good one. If not, I wouldn't have put the information out in a tweet.

I'm told Piccinini will be one of two and maybe three other key investors who will join Guber and Lacob in comprising the Warriors ownership group. Lacob and Guber will remain the majority owners. My source claims it's a "Slam-Dunk." We'll see.

Another reason Piccinini's becoming one of the owners of the Warriors looks to be a "Slam-Dunk": Save Mart Supermarkets recently launched a promotional sweepstakes, featuring its various private brands, in all its Northern California stores. The promotion is called: "Slam-Dunk With Our Brands." The grand prize: A "Basketball in the Bay Package," featuring the Golden State Warriors. See here.

As I mentioned earlier, Save Mart, with its numerous Lucky banner stores in the San Francisco Bay Area and Save Mart banner stores elsewhere nearby in Northern California, adds the retail outlet synergistic element to the entertainment-sports empire Guber is attempting to build.

And, as you can already see by the promotion Save Mart is running in partnership with the Warriors, Piccinini's ownership, which would be his personally not Save Mart's corporately, gives Save Mart a professional sports team in which to cross-promote with. Of course, for Piccinini personally, it gets him, as well as Guber, into the "Bigs," particularly after the two had the plug pulled on their ownership of the Oakland A's years' ago.

With Guber's flair and entertainment industry expertise, combined with having 200-plus Save Mart, Lucky and other banner retail supermarket outlets available to cross-promote with, the Warriors have nowhere to go but up in terms of attendance and success. The team already has strong attendance in NBA terms -more than 18,000 fans per game for five straight years, including last year, despite the Warriors' pathetic 26-56 season. Imagine if they become a contender. And imagine when Guber adds the entertainment flair to the team that he's famous for.

We should know if Bob Piccinini has made it to the "Bigs" by the end of this week.

Tuesday, October 26, 2010

Going Semi-Rural: Fresh & Easy Neighborhood Market Buys Property For New Store in Northern California Town of Clear Lake

Northern California Market Region Special Report

Tesco's Fresh & Easy Neighborhood Market continues to acquire new store sites in Northern California in advance of its launch into the market region in early 2011.

The latest future Northern California Fresh & Easy store is in the town of Clearlake, which is located about 100 miles northeast of San Francisco in Lake County.

Fresh & Easy Neighborhood Market has purchased a vacant parcel of land for a future store at 53 and Dam Road in Clearlake. The lot is immediately adjacent to and east of a Carl's Jr. fast-food restaurant, which is at 15895 Dam Road Extension. The Carl's Jr. opened in 2008. The area where the future Fresh & Easy store is located is pictured on the map here.

Neighboring grocery retailers to the future Fresh & Easy market include a Walmart discount format store and a Ray's Food Place supermarket, which is owned by Brookings, Oregon-based family-owned grocery chain C&K Market, Inc. There's also a McDonald's and Jack In The Box nearby.

The Walmart store offers a selection of packaged and perishable food and grocery products but not fresh foods such as produce or meats. Walmart Stores, Inc. is remodeling many of its Northern California discount format stores into hybrid supercenters, which offer a full supermarket selection. The Clearlake Walmart unit isn't currently set for such a remodel. However a company spokesperson in Northern California tells us that status could change in the not to distant future.

Clearlake has a full-time residential population of about 15,000 but fills up with many more people on the weekends and summer months because its a second home and tourist town. The nearest big city is Santa Rosa (about 150, 000 people), which is 35 miles away in the North Bay Area. The town is about 68 miles from Sacramento in the other direction.

Tesco's Fresh & Easy Neighborhood Market hasn't publicly announced it's plans to build and open the store in Clear Lake. However, Fresh & Easy Buzz has verified through public records and with commercial real estate sources and local government officials that the retailer has bought the lot.

Additionally, Fresh & Easy has been issued an off sale beer and wine license (#473180) from the California Department of Alcoholic Beverage Control (ABC) for the Clearlake location, which the California ABC has verified for Fresh & Easy Buzz.

Tesco's Fresh & Easy Neighborhood Market is in many cases, particularly in areas in California where commercial real estate prices have dropped significantly over the last couple years, purchasing parcel's like the one in Clearlake rather than having a developer purchase the land, build the store building, and then lease the building from a landlord.

For example, earlier this year we reported on two new Fresh & Easy store sites in California - in Sutter Creek and in Los Banos. Both of these future store locations are vacant lots on which Tesco's Fresh & Easy plans to build stores from-the-ground-up. And Tesco's Fresh & Easy bought both of the commercial lots. [See - August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California and May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California.]

Owning locations is common for Tesco in the United Kingdom, where it's based. In fact, Tesco regularly leases back its owned properties in the UK, which have built-up equity over time, using the money for new store development and remodels.

The retailer owns a small percentage of its existing 168 Fresh & Easy store locations, along with a few future sites, in Southern California, Nevada and Arizona. However, we haven't seen it purchasing as aggressively or as frequently in the past (in those markets) as it is in Northern California. Doing so makes sense because Northern California is historically excellent in terms of a place to make commercial real estate investments. Tesco is essentially betting on that fact in buying the properties. It's a good bet. In the long run the value will increase nicely, based on all the historical evidence to date, along with a couple other variables.

Like Sutter Creek and Los Banos, Clearlake is a small city. Its full-time residential population as mentioned earlier is about 15,000. However because it is a second home and resort town, its weekend and summer population grows considerable.

Clear Lake, which the town takes its name from, is the largest lake in California. It has a substantial lakeside community surrounding it. There's also a large house boat community at Clearlake. In addition there a a number of resorts in and around the town, including the Konocti Vista Casino Resort Marina & Rv Park, the Ferndale Resort and Marina and others.

This second-home (mostly residents of the San Francisco Bay Area and Sacramento region) and resort town status results in many more shoppers for the town's grocery stores than the 15,000 population suggests, although much of those visitors are seasonal, primarily spring and summer.

Tesco plans to open its first batch of Fresh & Easy stores in Northern California in early 2011, likely starting in February, as we've previously reported. [Read this story - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011 - along with seeing the links to additional stories on it.]

The retailer continues to search for new store sites in the Northern California region, which stretches from the Northern Central Valley and Sacramento area, into the San Francisco bay Area, south to the coast, and north to the Oregon border. Stay tuned.

Recent Related Stories - Fresh & Easy Northern California

September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011.

September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California and May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

Linkage: 2010 'Northern California Market Region Special Report' series

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville

September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California

September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010

September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California

September 18, 2010: Keep On Truckin' - Whole Foods Market Celebrates 30 Years This Weekend

September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'

September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban

August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California

August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA

August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA

August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow

July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening

July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]

Monday, October 25, 2010

Fresh & Easy Neighborhood Market to Open 10 New Stores in 10 Southern California Cities in January-February 2011

Southern California Market Region Report

On October 17, 2010, we reported in this story - No Additional New Fresh & Easy Neighborhood Market Stores Set to Open This Year; Ten New Units Planned For January 2011 - that Tesco plans to open 10 new Fresh & Easy Neighborhood Market stores in Southern California in early 2011.

Since publishing our report last week, we've learned some additional information and details.

First, not all of the 10 new Southern California units are likely to open in January 2011, although a number of them will. Fresh & Easy Neighborhood Market has now set a time frame of early January 2011-February 23, 2011 for opening the 10 stores.

We've also learned the identity of the 10 California cities where the 10 new stores will be opened in January-February 2011.

The 10 Southern California cities are: Lake Forest, Camarillo, El Cajon, Ventura, Sandimas, Walnut Park, Oceanside, Long Beach, Costa Mesa and San Diego.

Fresh & Easy Neighborhood Market hasn't announced the new store plans.

As we previously reported in our October 17 story, no additional new Fresh & Easy stores are currently set to be opened for the remainder of 2010.

Tesco plans to start opening its first batch of 11 Fresh & Easy stores in Northern California in early 2011, likely beginning in February, although it could be March, depending on a couple of variables. [see - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011.]

Fresh & Easy Neighborhood Market is on track to close 13 stores by November 2, 2010, which will result in Tesco having 155 Fresh & Easy markets open and operating in California, Nevada and Arizona. [See - October 24, 2010: Tesco's Fresh & Easy Neighborhood Market On Track to Close 13 Stores By November 2, 2010.]

Sunday, October 24, 2010

Tesco's Fresh & Easy Neighborhood Market On Track to Close 13 Stores By November 2, 2010

Tesco plans to have the 13 Fresh & Easy Neighborhood Market stores it's slated for closure - six in metro Phoenix, Arizona; six in metro Las Vegas, Nevada; and one in Southern California's Inland Empire region - shuttered and fully-closed by Tuesday, November 2, 2010.

The locations of the 13 closing Fresh & Easy stores are:

Metro Phoenix, Arizona

858 S. Greenfield Road, Gilbert
3232 E. Guadalupe Road, Gilbert
1045 S. Gilbert Road, Mesa
2009 N. Stapley Drive, Mesa
9124 E. Apache Trail, Mesa
5802 W. Olive Ave., Glendale

Las Vegas, Nevada

Desert Inn Road and Pecos Road
Vegas Drive and Jones Boulevard
Lake Mead Boulevard and Hollywood Boulevard
Warm Springs Road and Eastern Avenue
Eastern Avenue and Fremont Street
Las Vegas Boulevard and Lake Mead Boulevard

Southern California

25050 Alessandro Blvd, Moreno Valley (Alessandro Blvd. at Perris Blvd.)

Tesco announced the closing of the 13 stores on October 5, as we reported in this story - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market.

Fresh & Easy Neighborhood Market by the numbers

Once the 13 stores are closed, Tesco will have 155 of its small-format (10,000-12,000 square-foot) Fresh & Easy fresh food and grocery markets operating in California, Nevada and Arizona, down from the current 168 units.

Below is a breakdown by market region of the 155 stores after the November 2 closures:

Southern California
= 92 units

Central Valley, California/Bakersfield Metro Region
= 7 units

Central Valley, California/Fresno Metro Region
= 7 units

Metro Las Vegas, Nevada
= 21 units

Metro Phoenix, Arizona
=28 units

Total = 155 units

We have a permanent link listing the 13 stores to close at the top of the blog.

Tesco's Fresh & Easy Neighborhood Market is boarding up the 13 stores and will continue to pay the monthly rent on the units unless it can either sub-lease the units, which it has been attempting to do, or work out some sort of reduced rent arrangement with the landlords, which is unlikely.

Tesco has said it could open some or all of the stores at some point in the future. It's called the closures "mothballing," in reference to that possibility.

However, based on our reporting, along with the fact Tesco would like to sub-lease the 13 units, we doubt if once closed any of the 13 stores will fly the Fresh & Easy banner and be reopened anytime in the future.

In terms of subleasing, the metro Phoenix and metro Nevada commercial real estate markets are so flooded with available retail commercial real estate space, particularly vacant buildings, we don't see Tesco having much success with that goal, outside of perhaps being able to sub-lease a handful of the units if it offers extremely appealing monthly rates. The Moreno Valley unit in Southern California could be easier, although the Inland Empire region also has plenty of vacant retail commercial real estate on the market.

Additionally, since Tesco couldn't make a go with the Fresh & Easy stores at the 13 locations, it's doubtful any other small-format grocer, outside of a local independent or two perhaps, or drug store chain (the buildings would be a good size drug stores) will be interested in the locations. Niche specialty type stores would seem to be the best available opportunity, considering the market and the smaller footprints of the store buildings.

Tesco currently isn't plan on opening any additional new Fresh & Easy stores this calendar year. No new units are set to open this month, and none are at present planned for November or December 2010.

The retailer opened nine Fresh & Easy Neighborhood Market stores in September of this year. See the linked stories below for details:

>September 22, 2010: California Dreamin': Fresh & Easy Neighborhood Market, Whole Foods Market Combined Open a Total of Four Stores Today in California

>September 21, 2010: Fresh & Easy Neighborhood Market and Walmart Create A September New Grocery Store Rain Storm in Oceanside, California

>September 15, 2010: Two New Fresh & Easy Neighborhood Market Stores Open in Fresno, California Region Today

>September 8, 2010: Fresh & Easy Neighborhood Market Hits (and Breaks) the 100-Store Mark in California With Today's Openings

>September 7, 2010: 'Big Bang' September: First Four of Nine New Fresh & Easy Neighborhood Market Stores Opening on September 8

>July 14, 2010: Fresh & Easy Neighborhood Market Confirms Our June 25 Report it Will Open Nine New Stores in September 2010

>June 25, 2010: A Four Month Pause: No New Fresh & Easy Neighborhood Market Stores Set to Open Until September 2010

As we previously reported, Tesco's Fresh & Easy currently plans to open 10 new stores in Southern California in early 2011. The current opening time-frame for the stores is January 1, 2011-February 23, 2011.

Additionally, the retailer plans to open its first batch of Fresh & Easy Neighborhood Market stores in Northern California beginning in early 2011, probably starting in February but it could be March depending on a couple of variables. [See - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011. Also see the related stories links at the piece.]

Saturday, October 23, 2010

Look Out California Happy Cows, A UK Dairy Farm is 'Rapping' About its Contented Cows and the Organic Milk They Produce

'Yeo... Wassup at Yeo Valley?'

The fun, humorous and effective Happy Cow videos and television commercials produced for California dairy farmers just got some serious competition from an organic dairy farm - Yeo Valley Organic - in the United Kingdom.

Yeo Valley Organic, an innovative and sustainable family-owned organic dairy farm and company in England's West Country, has released the world's first rap music video about an organic dairy farm and its organic dairy products - milk, creams, yogurt, fruit compotes, butter, cheese and ice cream.

Since rap was invented in California - west coast - and New York - east coast - now that across the pond Yeo Valley Organic has pioneered the rap genre for milk, we wonder if we'll soon see a rapping

Yeo Valley Organic's milk and organic other dairy products are know for their high quality among British retailers and consumers, and the company's environmental standards are high. Their motto: 'Live in Harmony.' And they refer to the dairy cows as friends.

The rap video, "Yeo Boyz," was shot in...where else, "Yeo Valley."

It stars three hard- working "yeomen" and one "yoewomen," all workers at Yeo Valley Organic.

The video is professionally produced by Canadian rap video director Julien Lutz, who's also known as "Little X."

Lutz says "Yeo Boyz" is the first time he's worked with farmers. See this behind-the-music video in which "Little X" talks about the making of the first ode to organic dairy farming and milk. Producing a rap video, particularly with first-timers, is...well, "yoemen's work." But Lutz has done it well.

We think doing the rap video was an utterly great idea. It's very well done, fun and different. We hope Yeo Valley Organic "milks" it for all it's worth.

Walmart's UK ASDA Chain Wins 'Best National Retailer' At Tonight's World Food Awards in London.

Live Blogging: The World Food Awards

Walmart Stores, Inc.'s ASDA grocery and general merchandise chain just won the 'Best National Retailer' in the United Kingdom (UK) award at the 2010 World Food Awards, which is currently going on at the tony Hilton Park Lane Hotel in London.

ASDA defeated Tesco and Sainsbury's for the honor at the annual awards ceremony, which some people like to call the 'Oscars' of British and European food industries.

The awards ceremony focuses on "the best" ethnic (or world) foods available for sale in the United Kingdom and Europe, along with honoring what the judges determine is "the best" food retailer in the UK.

ASDA is the second-largest food and general merchandise retailer in the UK. Tesco is number one. Sainsbury's is the third-largest, just slightly behind ASDA in market share.

Tonight's event is being broadcast globally in over 100 countries by Sony Entertainment Television. In addition to the various awards presented by various celebrities, sports personalities and chefs, the awards ceremony includes performances by a host of musical artists.

In addition to the 'Best National Retailer Award' won by Walmart-owned ASDA, the award's ceremony includes numerous other categories, all focused on various aspects of food retailing, distribution and restaurants.

The categories are:

>Best Independent Retailer
>Best Wholesaler
>Best New Product
>Best Packaging
>Best Marketing Campaign
>Entrepreneur of the Year
>Best Catering Supplier
>Restaurant of the Year
>Lifetime Achievement

You can learn more about the World Food Awards at the website here.

For real time results of tonight's winners, check the World Food Awards' Twitter feed here.

Thursday, October 21, 2010

Brookings Institution Takes In-Depth Look At 'Food Desert' Supermarket Access in 10 U.S. Metro Regions, Including California, Nevada and Arizona

The above video, "Getting to Market," features an overview analysis of the Brookings Institute's new "food desert" supermarket access study.

Fresh & Easy Buzz has written extensively about the topic of "food desserts" over the last three years, particularly (but far from exclusively) as the issue relates to the Western U.S., where Tesco's Fresh & Easy Neighborhood Market and its competitors operate fresh food and grocery stores. There are currently 168 Fresh & Easy stores in California, Nevada and Arizona. The grocer is closing 13 stores, which it says will be done by November 2, 2010. That will bring the total to 155 units. [See: 13 Closing Fresh & Easy Stores List.]

A "food desert" is defined as a low-income neighborhood - mostly urban inner-city but can also be rural - that is underserved by grocery stores that offer a decent selection of fresh foods and groceries at reasonable prices. Its residents lack sufficient access to grocery stores and must travel a distance to shop.

The "food desert" issue is a multi-facted one. First, it's a personal or individual issue. Residents who live in neighborhoods without adequate access to stores offering fresh foods and groceries tend to shop at mini-marts and convenience stores, buying and consuming less healthy foods, which leads to health problems, like obesity, diabeties, high blood pressure and other lifestyle-related problems.

Additionally, not having grocery stores offering fresh foods and groceries in the neighborhood is an economic issue for residents. Having to travel outside the neighborhood to shop means spending money on transportation, be it for gasoline for the car or for public transit. The economics can also play out in added costs for medical care and prescription drugs because of a reliance on less nutritious foods. High blood pressure and type 2 diabetis are often prevented by eating a healthy diet and getting exercise, for example. But once people get the diseases they tend to take perscription drugs to treat them for a lifetime.

The "food desert" phenomenon is also a social and public policy issue. In addition to the individual health and wellness problems residents in neighborhoods underserved by grocery stores face, there are negative social and economic implications for society at large as well. For example, because residents of neighborhoods underserved by grocery stores offering healthy foods often eat a much less nutritious diet, they tend to have more health-related problems than those living in neighborhoods well-served by such stores. Since most of the residents are low-income, they often lack health insurance and instead must seek public health care, which is paid for by taxpayers.

Prevention through access to fresh and nutritious foods goes a long way to not only making people healthier but also towards reducing the burden on hospital emergency rooms and other government-funded clinics, assuming of course people take advantage of the availability and practice a healthier lifestyle, which is something people from all economic segments of the U.S. population struggle to do. All these factors tax local and state government budgets, thereby creating a social and economic issue for even those residents that live in non "food dessert" areas.

But "food deserts" also present an economic opportunity for grocers and other food and grocery retailing format operators such as mass merchandisers (Walmart, Target) and convenience and drug store retailers wanting to offer fresh foods in the stores. For example, Walgreens is testing fresh foods, including produce, in some Chicago and New York stores. CVS Pharmacy is doing the same in about 40 stores in New York and New England.

Many food and grocery have been discovering this fact over the last couple years and have started to open stores in these urban food desert neighborhoods, after avoiding what are mostly low-income and inner-city areas since the flight to the suburbs movement took force in America a few decades ago. Wal Mart's recent deal with the City of Chicago to open up to 24 stores of various formats and sizes over a period of years includes a focus on stores in underserved neighborhoods on the south side, for example.

In addition, a number of states and cities have started initiates, many modeled after the Pennsylvania Fresh Food Financing Initiative, designed to lure grocers to these underserved neighborhoods. For example, the City of Los Angeles recently approved a multi-million dollar "food desert" initiative. Tesco's Fresh & Easy store in low-income south Los Angeles, which was opened in February of this year without any financial assistance from the city, is doing very well for the grocer.

The Washington D.C.-based Brookings Institute's Metropolitan Policy Program, in partnership with The Reinvestment Fund (TRF), which is a community development financial institution and research organization based in Philadelphia, has just released a major study of "food desserts," focusing on ten major U.S. metropolitan regions. The regions are:

>Los Angeles, California
>Phoenix, Arizona
>Las Vegas, Nevada
>San Francisco, California
>Atlanta, Georgia
>Little Rock, Arkansas
>Baltimore, Maryland
>Cleveland, Ohio
>Louisville, Kentucky
>Jackson, Mississippi

All of the metro regions listed above are live links. If you click on the name of the region, you'll get Brookings' analysis of the particular region in terms of which areas have the lowest-levels of access to grocery stores that offering a decent selection of fresh food and groceries at reasonable prices, along with some additional variables and analysis.

Brookings is a well known research center and think tank based in the nation's capital. It operates numerous programs in the areas of domestic and foreign policy. It's

TRF played a lead role in designing and implementing the Pennsylvania Fresh Food Financing Initiative, a program that provides grants and low-cost capital to facilitate the location of new supermarkets and fresh food retailers in that state’s underserved communities. That initiative is now the model for several other state and local programs, as well as the inspiration for a major new federal budget initiative that seeks to improve community health and economic development outcomes through supermarket attraction and expansion.

Brookings and TRF have also created an interactive map/data base [see it here] that can be used to analyze and pinpoint specific aspects of the underserved areas in the 10 metropolitan regions studied, which include the metro California, Arizona and Nevada regions listed above.

Unlike a lot of previous research that attempted to identify "food deserts," Brookings/TRF’s analysis looks at factors beyond distance to a supermarket that matter for access, including a community’s population density and level of car ownership. And it uses household income and expenditure data to help pinpoint the communities that have a significant untapped local demand for supermarkets.

This new and detailed information should be extremely helpful to retailers in considering locating food and grocery markets in these underserved regions.

For example, Tesco's Fresh & Easy Neighbrohood, which operates 168 stores in Southern California and the Bakersfield and Fresno metro regions in California's Central Valley, along with 34 stores in metropolitan Phoenix, Arizona and 27 stores in metro Las Vegas, Nevada, has opened a handful of those stores in low-income "food dessert" neighborhoods, such as its stores in south Los Angeles, Compton and a few others places.

[Note: we've seen and continue from time-to-time to see publications putting out stories saying Tesco's Fresh & Easy Neighborhood Market either has a "food dessert-focused" strategy or that it has been opening numerous stores in underserved neighborhoods. That's not the case. Less than 5% of the 168 Fresh & Easy stores are in areas that qualify as "food desserts." In fact, in our research we've only been able to identify three-four Fresh & Easy stores that are in areas that can be defined as "food deserts." The grocer currently has two-three new stores in development, including one in San Francisco, that are in urban neighborhoods underserved by grocery stores.]

"Across the 10 metro areas [Brookings] studied, about 1.7 million people (5 percent of total population) live in low- and moderate-income communities that are significantly underserved by supermarkets. African Americans, children, and very low-income families are over-represented in these areas," according to Alan Berube, a senior fellow and the research director of Brookings' Metropolitan Policy Program.

"Greater Los Angeles alone accounts for half a million of the underserved; and in the Cleveland metro region, more than one in nine residents lives in a low-supermarket-access community. Estimates suggest that upwards of $2.6 billion annually in grocery expenditures may 'leak' out of these communities due to a lack of nearby supermarkets," Berube says data from the study show.

That $2.6 billion annual figure, along with the respective figures for each of the 10 regions, is and important one for retailers. It means there's a sales opportunity gap of $2.6 billion in these 10 U.S. metropolitan regions alone that's being lost by the food and grocery industry in general and specific grocers in particular.

A number of grocers, including Kroger Co. and others (including independents), as well as Tesco's Fresh & Easy, have been opening a few stores in "food desserts" in California, Arizona and Nevada over the last few years, and are considering building and opening more. The Brookings research and the TRF food store access map should provide a useful tool for grocers and others, including municipal governments, in helping to determine the particular neighborhoods in the 10 regions studied that offer the most opportunity, combined with other research and data, of course. You can also access the data for the 10 metro regions studied using the PolicyMap’s feature, which offers 10,000 data indicators and full functionality. It's at

For those interested in additional U.S. metropolitan regions TRF has a nationwide analysis of low-supermarket-access communities at its website here. There's additional information on the "food dessert" issue at the website.

There's clearly loads of opportunity for grocers in "food dessert" neighborhoods, if done right. For example, Tesco has yet to open a Fresh & Easy store in downtown Los Angeles, which although now has a Kroger-owned Ralphs Fresh Fare supermarket which is doing extremely well, still needs and has room for additional markets. This is a real missed opportunity for Tesco's Fresh & Easy, in our analysis.

In the San Francisco Bay Area, the Fresh & Easy store in the Bayview district at Third Street and Carrol Avenue, which is one of the first batch of 11 stores set to open in early 2011, is in a "food dessert" neighborhood. Kroger has one of its Foods Co discount supermarkets not far away but it's the only full-service supermarket in the vast Bayview neighborhood. The fresh & Easy will be the second.

None of the other 20-plus Fresh & Easy Neighborhood Market store locations so far in the Bay Area are located in "food desert" neighborhoods, according to our analysis, although the 32nd and Clement site in San Francisco's Outer Richmond district, also one of the first batch of Fresh & Easy stores Tesco plans to open in early 2011, is in a neighborhood underserved by grocery stores, but its not low-income. [See our Northern California Fresh & Easy Store List.]

The "food dessert" issue is increasingly becoming a front burner topic among elected officials, government policy-makers and non-profit national, community and neighborhood groups. First Lady Michelle Obama's "Let's Move," nutrition initiative has also shined a spotlight on the issue, since increasing access to grocery stores in "food dessert" neighborhoods is a major element of the program.

There's significant opportunity in numerous American inner-city regions, where residents are lacking access to fresh food and groceries at decent prices (and in rural regions as well), for grocers that can operate the right food and grocery retailing format using the right formula.

Additionally, with more and more cities like Los Angeles and others now offering various economic incentives to grocers if they will open stores in the "food desert" neighborhoods, the incentives to enter these neighborhoods and open stores can be extremely favorable for retailers.

Readers Resource

Click here and here to read a selection of past stories in Fresh & Easy Buzz on the "food dessert" and access to fresh food and groceries topic and issue.