Fresh & Easy Neighborhood Market and American Express Launch October In-Store Promotion

Promotions & Promotional Merchandising: News/ Analysis/Commentary

Tesco's Fresh & Easy Neighborhood Market and American Express have launched an October promotion at the grocer's 168 stores in California, Nevada and Arizona, in which customers who purchase at least four 'fresh&easy' private brand items as part of a minimum single total purchase of $50 will get a $10 credit on their American Express credit or charge card billing statement.

The promotion doesn't apply to debit cards. The $10 credit, for those shoppers who use their American Express cards, amounts to a 20% discount off of the minimum $50 grocery purchase. Alcoholic beverage purchases are exempted from the $50 minimum.

Customers receive the credit from American Express four -to- eight weeks after the promotion ends, which is on October 31, 2010. Additionally, Fresh & Easy customers/American Express credit card-users are limited to just one $10 credit during the promotional period.

The new in-store promotion is the most recent in a series of in-store promotions Fresh & Easy Neighborhood Market is conducting this year, which was something we suggested first in 2008 and again in 2009 the fresh food and grocery chain needed and needs to be doing to create excitement and drive sales in its stores.

Directly or indirectly, Tesco's Fresh & Easy has taken our advice. For example, below is our extensive coverage and analysis, along with commentary at times, of the grocer's most significant promotional and promotional merchandising activity thus far this year:

>August 2, 2010: Arizona 'Tweeps' Treasure Hunting in Fresh & Easy Neighborhood Market's Twitter-Trivia Contest

>July 19, 2010: Twitter Trivia + In-Store Treasure Hunt Promo Next Up On the 2010 Promotional Hit Parade at Fresh & Easy Neighborhood Market

>June 23, 2010: Integrated Retail & Twitter Wine Promotion Rates Fresh & Easy Neighborhood Market A Gold Medal

>February 8, 2010: 'I Taste Therefore I Tweet': Fresh & Easy Set to Hold 'Twitter (Wine) Tasting' Tomorrow Night

>May 11, 2010: Fresh & Easy Neighborhood Market Promotion Benefits America's Wounded Warriors

>April 19, 2010: Tesco's Fresh & Easy Joins Kroger Co. in Holding Earth Month-Earth Day Reusable Bag Design Contest

>June 17, 2010: Fresh & Easy Neighborhood Market Picks Eight Finalists in its Reusable Bag Design Contest; Website Voting Through June 30

>March 23, 2010: Fresh & Easy Kicks Off Three Week 'From Grapes to Gold Medals' Wine Promotion Tomorrow

>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.)

>June 7, 2010: 'Bigmista' Hits the Stores in Fresh & Easy Neighborhood Markets' Free Barbeque Road Show

>July 9, 2010: 'Bigmista' Hits the Road Again For Fresh & Easy Neighborhood Market's Free Neighborhood BBQ Road Show

>September 16, 2010: Fresh & Easy Neighborhood Market Launches 2010 'Shop for Schools' Program; Shopping Nights Add Foot Traffic & Sales

Fresh & Easy's level of promotional activity so far this year is already more than double its 2009 activity.

This is important, and the reason why we highlighted the grocer's lack of promotions in 2008/2009 and suggested it needs to do just what it's doing promotion-wise (regular and varied in-store promos), because even though Fresh & Easy is owned by mega-United Kingdom-based Tesco, it's a start up chain in California, Nevada and Arizona and therefore essentially remains an unknown retail brand.

Tesco continues to lose $200 million-plus a year with Fresh & Easy, which adds impetus to the grocer's most immediate need, which is to increase sales - higher margins and profits will have to come later, although the clock is ticking rapidly to achieve both - which creative and aggressive promotions and promotional merchandising can help achieve.

Varied and regular creative promotions and merchandising-oriented promotions are key for grocers, including those with extremely established retail brands, because they not only help over time to build retail brand, they also create excitement in the stores and drive shoppers to the stores in the short and medium run. For Fresh & Easy, which as job one needs sales and needs to build a base of shoppers who use the stores as primary and secondary food and grocery shopping venues rather then merely using the stores as tertiary or occasional places to shop, such promotional and promotional merchandising programs are therefore even more important.

In the current down economy we aren't sure if a promotion like the American Express $10 credit October event will drive much added business into the stores or increase sales significantly - although the $50 minimum to get $10 back might increase some shopper market basket sizes - because those consumers who can afford to charge on their cards right now probably aren't that concerned about saving the $10, while those shoppers who most need to save the $10 probably either don't have an American Express credit card or if they do are close to or have already maxed out on their credit limit.

But what's key for Tesco with Fresh & Easy is two-fold: (1) Keep trying a variety of different types of promotions - experiment - because there's no better way to find out what works best than by trying it, within reason of course, and (2) Continue with a regular schedule of in-store promotions as a way to try to create excitement around the stores and the brand, drive shoppers into the stores, and hopefully for the grocer increase sales and average customer market basket sizes in the process.