Wednesday, December 15, 2010

Fresh & Easy Neighborhood Market's California WIC Voucher Expansion Program Stalled

Related story - December 15, 2010: A Tale of Two California's: Welcome to the Once Thriving Central Valley.

In July of this year we reported that after much delay, Tesco's Fresh & Easy Neighborhood Market finally began accepting WIC Vouchers at one of its 106 stores in California, the unit at 1025 East Adams Boulevard (Central & Adams) in low-income South Los Angeles. There are 155 Fresh & Easy stores. In addition to the 106 California markets, there are 28 units in Arizona and 21 stores in Nevada.

In our story about the development - July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow - we reported that following the test at the Central & Adams store in South Los Angeles, which opened in February 2010, Fresh & Easy planned to roll out the acceptance of the vouchers, which are provided by the state to low-income mothers so they can purchase specific nutritious foods like whole milk, infant formula, whole grain cereals and breads, and fresh produce, for their children, to selected other stores in California.

At the time, Fresh & Easy was looking to expand its acceptance of the WIC Vouchers to additional stores by at least the early fall, according to our sources.

However, nearly five months later, the grocer has yet to begin accepting the vouchers at any additional Fresh & Easy Neighborhood Market stores in the Golden State, according to our research.

Not long after it began taking the WIC Vouchers at the south Los Angeles market in July, Fresh & Easy sent out a memo, which included a "WIC cabinet/shelf schematic," to store managers at various stores in Southern California and in the Central Valley (Bakersfield and Fresno regions), alerting them that an expansion to other stores would be coming in the near future. But five months later, and with 2010 coming to an end, the roll out has been long-stalled.

We've recently talked to a number of store managers and team leaders at Fresh & Easy markets in Southern California and in the Central Valley, particularly those in low-income neighborhoods, who tell us they aren't sure if or when the acceptance of WIC Vouchers will be rolled out to additional stores, despite being under the impression since this summer that such a roll out was coming well before the end of the year.

One Fresh & Easy management employee in the Central Valley tells us that at least three of the seven stores in the Bakersfield region could see a 10%-15% sales boost simply if WIC Vouchers were accepted at the markets. The employee also told us the other four stores should see an at least 5%-10% increase from WIC because WIC Voucher use is up so much since the recession hit the area hard in 2007-2008.

The Fresh & Easy worker sited a Save Mart-owned Food Maxx discount grocery store and a Safeway-owned Vons supermarket, both located near a Fresh & Easy unit in Bakersfield, that generate tens of thousands of dollars a week in sales from customers using the WIC Vouchers to purchase high-ticket items like infant formula, whole grain breads and cereals, and gallons of whole milk.

A store-level manager in the Fresno area told us a similar story, saying WIC Voucher and food stamp use has grown so much in the Central Valley region over the last few years because of the high joblessness and growing poverty rate that the particular store turns away customers regularly who attempt to purchase WIC-approved items like whole milk, produce, cereals, eggs and other items but are unaware the Fresh & Easy stores don't except the vouchers.

The manager, who has extensive grocery retailing experience in the region, said all seven of the Fresno-area Fresh & Easy stores would see sales growth if they could accept the vouchers, with at least three of the stores likely gaining double-digit sales increases if the WIC acceptance to expanded to the area.

The Central Valley has the highest joblessness rates in California, ranging from 14% unemployment in the best counties to 20% in the worse areas. California's unemployment rate is currently 12.4%.

The region's poverty rate is also among the highest and fastest-growing in the nation. Many experts have taken to calling the Central Valley "America's new Appalachia," for example, because of its high and growing poverty rate.

Unlike food stamps, which today are called SNAP and come loaded on a plastic debit card so grocery stores can handle the transfer of payments electronically at the point-of-sale, WIC Vouchers are paper, similar to a check. Grocers must process the vouchers in the same way they do paper checks.

Tesco's Fresh & Easy Neighborhood Market has self-service checkout and doesn't accept paper checks in the stores. Therefore, its point-of-sales systems aren't set-up to process the paper vouchers - along with paper checks or manufacturers' cents-off coupons.

In order to process the WIC Vouchers at the south Los Angeles store, Fresh & Easy had to make modifications to the store's point-of-sale system. Additionally, store clerks must assist each customer who pays for their purchases using the vouchers.

Based on our reporting, it appears two factors are primarily behind Fresh & Easy's having not rolled out the acceptance of the WIC Vouchers to additional California stores, despite the fact its plans, at least this summer, were to do so.

First, Fresh & Easy Neighborhood Market has had numerous problems with the adapted point-of-sale system at the Third & Adams store in south Los Angeles, in terms of processing the paper WIC Vouchers.

In addition, the grocer doesn't want to establish a full-service checkout lane in each of its stores, which it might have to do if it accepted the vouchers in all 106 of its California stores. Doing so would add to overall store labor expenses. (In our experience and analysis, the added sales from WIC would more than make up for any such added labor costs though.)

Meanwhile, store managers and clerks at numerous Fresh & Easy markets in California, particularly those in low-income neighborhoods in Los Angeles and other parts of Southern California, as well as in the Central Valley, wonder what's taking so long in terms of expanding the acceptance of the WIC Vouchers to additional stores in California?

It seems like a good question for them to ask, since as they've told us, Fresh & Easy store workers are regularly sending shoppers who come in the stores wanting to use WIC Vouchers - as well as customers who use food stamps and cash to shop at the stores but also get WIC Vouchers but can't use them when they shop at Fresh & Easy - down the street to a Vons, Ralphs, Stater Bros., Albertsons, Walmart, Save Mart or other competitor's store - virtually every chain and independent of note in California accepts WIC Vouchers - and losing needed sales in their stores.

[Editor's Note: Three years ago, Fresh & Easy Buzz first pointed out and reported on the fact that Tesco's Fresh & Easy Neighborhood Market, which opened its first stores in November 2007, didn't accept WIC Vouchers. Additionally, in analysis and commentary pieces beginning in 2008 - and right up until the grocer decided to accept the vouchers at its first store, the Central and Adams unit in South Los Angeles on July 29 - we've also pointed out in detail how, from both business (added sales) and ethical grocer perspectives, Fresh & Easy was missing the boat by not accepting WIC in its stores. All this time later, the grocer continues to miss that same boat by failing to roll out the acceptance of WIC to additional stores in California.

Below is a selection of some of those past stories from Fresh & Easy Buzz:

July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow

July 28, 2010: What A Long, Strange Trip it's Been: South Los Angeles Will Be First Fresh & Easy Neighborhood Market Store to Accept WIC Vouchers Starting Tomorrow

July 7, 2010: Tesco's Fresh & Easy Neighborhood Market to Start Accepting WIC Vouchers at Central & Adams Store in South Los Angeles This Month

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

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

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

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

March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track

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

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

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

February 24, 2010: Fresh & Easy Store Opens its Doors in South Los Angeles

April 22, 2010: Breaking Buzz: Tesco's Fresh & Easy to Accept WIC Vouchers at its East Adams Store in South Los Angeles

May 14, 2010: Fresh & Easy Neighborhood Market Not Yet Accepting WIC Vouchers at South L.A. Store; No Start Date Set

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

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

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

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

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

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

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

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

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

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


F&E Employee said...

The POS systems aren't designed to process paper of any kind. There's been talk that in order to accept WIC at all the stores we will have to probably get new systems. That's not in the cards for Fresh & Easy right now.

Anonymous said...

The F&E store where I work in the Fresno area could probably increase sales by 5-10% if we took WIC. We gets lots of customers trying to use them. We even have a store employee who's a single mom and uses WIC for baby formula and other stuff on the list. She buys it at Food Maxx or Vons. We've been asking but receive no info about the company expanding WIC to other stores.