Fresh & Easy Neighborhood Market, Others Eyeing Closing Andronico's Store on Telegraph Avenue in Berkeley, California

Cars fill the parking lot of the Androncio's supermarket on Telegraph Avenue in Berkeley. The grocer is liquidating all of the merchandise in the store at deep-discounts prior to closing the store, most likely by the end of the month. Click on the photo above to enlarge it. Note the "store closing" sign on the store. [Photo credit: Fresh & Easy Buzz.]

Northern California Market Region Report
News/Analysis

On November 25, 2011 Renovco Capital, the new owner of Community Markets, announced it will close the store at 2655 Telegraph Avenue in Berkeley, California as part of its strategy to turn the once 14-store food and grocery retailer around, leaving it with just five stores in Northern California's San Francisco Bay Area.

[Read our 'The Insider' columnist's November 26 column: Andronico's to Close Another Store in Berkeley as Part of 'Comeback' Strategy for details. Also see what he wrote about Tesco's Fresh & Easy and Andronico's in this May 30, 2011 column: May 30, 2011: 82-Year-Old Grocer Andronico's Needs A Sugar Daddy of Sorts: 'The Insider' Suggest Tesco and its Fresh & Easy Neighborhood Market Might Fit the Bill.]

The Telegraph Avenue store is the second unit Andronico's has closed in Berkeley in as many months.

It's the third store the grocer has closed since July of this year.

Last month Andronico's closed a store on University Avenue in Berkeley. In July the retailer closed a store in Palo Alto.

Andronico's Community Markets started 2011 of with eight stores, down from a high of 14 units less than a decade ago. It now has five supermarkets - two stores in Berkeley and one unit each in San Francisco, Los Altos (South Bay Area) and San Anselmo (Marin County).

Renovco Capital bought 82-year-old Andronico's out of bankruptcy court of $16 million. (See the stories linked at the end of this piece for details.)

The closing of the Telegraph Avenue Andronico's supermarket, which has been a fixture at the location in Berkeley for many decades, offers a second store site opportunity for Tesco's Fresh & Easy Neighborhood Market in the Easy Bay Area University city (Cal Berkeley), where it's been looking for locations for some time.

In October Andronico's closed a store on University Avenue in Berkeley, and as we reported on October 18, 2011 here - Look for Fresh & Easy Neighborhood Market to Grab Closing University Avenue Andronico's Supermarket in Berkeley CA ... If it Can - Fresh & Easy is interested in the location.

In addition to Fresh & Easy Neighborhood Market, a couple other retailers, including a dollar store chain, are interested in the now vacant University Avenue Andronico's site, according to our sources.

Those same sources told us yesterday that Fresh & Easy's real estate folks have already expressed an interest in the closing Telegraph Avenue Andronico's store.

Additionally, we're told a natural foods chain and CVS Pharmacy, in addition to Tesco's Fresh & Easy, are also interested in the Telegraph Avenue location, which our 'The Insider' columnist reported on November 26 will likely close by the end of the year.

Andronico's is already holding a merchandise liquidation sale at the Telegraph Avenue store, offering products for deep discounts, which is what it did when it closed the University Avenue supermarket. It took the grocer just a couple weeks to liquidate most everything at the University Avenue location.

Our commercial real estate and other sources say one possible scenario involving Tesco's Fresh & Easy and CVS Pharmacy in the Andronico's Telegraph Avenue location would be for the two chains to divide the building in half, putting a Fresh & Easy fresh food and grocery market on one side and a CVS drug store on the other.

Fresh & Easy Neighborhood Market and CVS did just that in a former Albertsons supermarket location at 32nd and Clement Street in San Francisco's Outer Richmond District.

The Fresh & Easy store at 32nd Avenue and Clement Street opened June 22, as we reported that same day in this story: Tesco's Fresh & Easy Neighborhood Market Opens First Store in San Francisco - in Outer Richmond District.

The CVS drug store, which shares the building with the Fresh & Easy grocery market (view the floor plan here) opened about a month later.

The Telegraph Avenue Andronico's store in Berkeley has about 20,000 square-feet of selling space, based on our estimation. That would be enough room to put both a standard version (10,000 square-feet of selling space) Fresh & Easy store and a CVS drug store that's about the same size (or slightly smaller) as the unit at 32nd and Clement in San Francisco.

As an alternative, Tesco could put one of its Fresh & Easy Express stores (3,000 square-feet of selling space inside a 4,000 square-foot exterior) in the Telegraph Avenue Andronico's building, although going with a standard sized Fresh & Easy market makes much better sense, in our analysis.

But it's still early. And we suspect additional food retailers will be interested in the Telegraph location.

No deal has been done between the landlord and any retailer yet, according to our sources.

Of the two locations, the vacant Andronico's on University Avenue and the soon-to-be vacant unit on Telegraph,  the Telegraph Avenue location would be the better of the two for Tesco's Fresh & Easy if the grocer were to take just one of the sites, if it can, in our estimation and analysis.

The main reason for this is because a Fresh & Easy (or any other) store at the location would benefit greatly from the heavy pedestrian and auto traffic on Telegraph Avenue.

Additionally, the Telegraph Avenue location is closer to the University of California at Berkeley campus than the University Avenue site is, which is another big plus, because our research and reporting over the last 4-plus years shows that the Fresh & Easy format tends to be most popular among the millennial consumer segment, as well as college and university students.

Both the University and Telegraph Avenue locations offer excellent potential for Tesco's Fresh & Easy however. And commercial real estate buildings that can house grocery stores doesn't open up all that often in Berkeley.

Additionally, the Telegraph Avenue location, to a greater extend, and the vacant Andronico's building on University Avenue to a lessor but significant extent, both also have the potential to be excellent locations for the two farmers market format chains - Sprouts and Sunflower - both of which are putting a major emphasis on opening new stores in Northern California, including in the San Francisco Bay Area.

Berkeley is the ideal demographic for both farmers market style grocery chains, and as noted, grocery store (even smaller format) commercial real estate doesn't become available all that frequently in Berkeley.

Related Stories

November 26, 2011: Andronico's to Close Another Store in Berkeley as Part of 'Comeback' Strategy

October 30, 2011: 'The Insider' Offers Some Advice He Suggests the New Owners of Northern California's Andronico's Markets Should Take Post-Haste

October 18, 2011: May-to-October at 82-Year-Old Andronico's Markets: New Owner, 2 Stores Closed ... Now What?

May 30, 2011: 82-Year-Old Grocer Andronico's Needs A Sugar Daddy of Sorts: 'The Insider' Suggest Tesco and its Fresh & Easy Neighborhood Market Might Fit the Bill

See these links -  Fresh and Easy Northern California and Fresh and Easy San Francisco Bay Area - for additional related stories.

Raley's Combining High-Tech and High-Touch Tools to promote its Stores For the Holidays

Above: Inside the Raley's superstore on Colusa Avenue in Yuba City, California. The 'Raley's Kitchen' in the photo offers in-store, chef-prepared entrees, sides and more, including meats hand-carved to order by the chef. It's part of the extensive deli and fresh-prepared foods offering in the store, which is a category Raley's is noted for. Photo courtesy I-5 design. March 3, 2011.

Turkey & Technology -- Grocers, new technologies and holiday promotions

West Sacramento, California-based Raley's Family of Fine Food Stores is using a combination of high-tech digital and high-touch low-tech tools to create promotions it hopes will drive shoppers into its stores in Northern California and Northern Nevada during the crucial-for-grocers mid-November to December 31 holiday food and grocery sales period.

Text for a discount and chance to win

On November 16 (and running to December 31) Raley's kicked off a promotion in which shoppers are invited to send a text message to the number "678678 Save" in order to receive $10 off any purchase of $100 or more in one of the grocer's Raley's (superstores) Bel Air Markets and Nob Hill Foods (supermarkets). Raley's operates a handful of discount warehouse stores under the Food Source banner. The promotion doesn't apply to the Food Source stores.

After sending the text message, consumers get a confirmation code back, which they give the store clerk at checkout in order to get the $10 discount of their purchase of $100 or more.

Sending the text message also enters shoppers into a contest, which offers the chance to win a free deli party tray.

Raley's is giving away 10 of the deli party trays, which include: two Spinach Dip trays valued at $19.99 each; four deli meat and cheese trays (valued at $29.99); and four Quesadilla Party Trays, which have an estimated value of $44.99, according to the grocery chain.

Participants must be 18-years-old or older in order to enter the text message-based contest.

The drawing for the deli party trays, which is being conducted by the Pocketshop LLC firm for Raley's, takes place December 15. Any remaining prizes will be rewarded on December 31, according to the grocer.

Raley's promoted the send-a-text-for-a-discount promotion and contest on the front page of its November 16-24 weekly advertising circular, which is direct-mailed and inserted in daily newspapers, and distributed to homes throughout Northern California and Northern Nevada.

The grocer also promoted the send-a-text-for-$10-off promo using Twitter's Promoted Tweet program, doing so during the week running up to the Thanksgiving holiday.

Raley's is currently promoting it on its Facebook page, on Twitter and in its stores.

We like the text-for-a-$10-dollar discount for three main reasons.

First, it requires shoppers to do a little work in order to get their $10 discount, unlike merely putting a coupon in the weekly ad circular or posting it online. And since text messaging is so common and popular, it's second nature for consumers to take a few seconds and text for their discount, which helps to ensure a higher participation level (than say sending an e-mail to get the discount) in the promotion and contest because it uses what's become a fast to use and near-ubiquitous digital technology.

Additionally, having shoppers send a text in order to get the $10 off and participate in the contest also has the added marketing benefit of capturing all those phone numbers from which the texts are sent. Such a data base could be used by Raley's in the future, say to send out special text-based promotions our other communications, for example.

Lastly, the text-for-a-deal promotion and contest creates some excitement among shoppers who participate.

It also offers the potential to generate some good word-of-mouth PR for Raley's. For example, it's likely some people sent a text messages to family members and friends telling them about the $10 off deal and the contest, and in turn those folks might have sent text messages to others, sharing the message.

Using social media - Twitter and Facebook - to communicate the promotion also has the potential to create additional virally-spread excitement around it, resulting in even more word-of-mouth buzz for the text message-based promotion.

Retweet to help the hungry

Speaking of social media and creating buzz, on Monday Raley's launched a charitable promotion for its Food For Families program, which donates food and cash to food banks in the communities where it operates its stores.

Using Twitter - both the Promoted Tweets program and its own Raley's feed - along with its Facebook page, the grocer posted this tweet yesterday, November 28: "Giving goes viral! Please RT this message and @raleysstores will donate 25 cents to Food For Families. Visit us here at Facebook."

As the tweet says, for every RT, which stands for retweet and is a way people can share other users' tweets with their followers on Twitter, Raley's is donating 25 cents to its Food For Families program, and thus to the food banks, every time the tweet, and additional ones like it, are retweeted on Twitter.

Like the text message promotion, this donation-backed, cause-related promotion also offers Raley's a solid opportunity to have a considerable amount of buzz created around its brand and stores, along with doing good at the same time. The grocer obviously realizes the potential, as it hopes it's giving offer goes viral.

Raley's also has an additional - and generous - promotion going on for its Food for Families program for the holiday season.

The grocer is offering grocery bags of food for the hungry in its stores for $10 per-bag. Between now and Christmas, for every bag customers buy to donate, Raley's is doubling the offer, donating another $10 bag of groceries to local food banks, for a total of $20.

Shoppers don't even have to visit a Raley's-owned store to donate. They can do so online here, and Raley's will match the donation. The grocer will then donate the groceries directly to the food bank closest to where the person lives.

Free black coffee on Black Friday

On Friday November 25 (Black Friday) Raley's put away the high-tech tools and used old fashion human-power and shoe leather to promote its stores in its hometown Sacramento area, offering a touch of warmth and much-needed caffeine to early-bird holiday shoppers.

We call the approach high-touch, as compared to high-tech.

The privately-held grocer, which has sales of about $3.1 billion annually and is owned by Joyce Raley-Teel (daughter of founder Tom Raley and the company's chairwoman) and headed up by her son, CEO Michael Teel, sent street teams armed with hot cups of Peets Coffee and discount coupons out to numerous jam-packed malls and shopping centers in Sacramento and the nearby cities of Folsom, Roseville and Natomas on Black Friday (and the following Saturday and Sunday).

The Raley's ambassadors armed with free hot coffee and the discount coupons were "warmly" received by the early bird Black Friday shoppers on what was a fairly chilly late night/early morning in the Sacramento region, according to a Fresh & Easy Buzz reader from Sacramento who wrote us and said she was out shopping with her daughters on Black Friday and received a much-appreciated free hot cup of Joe (or in this case Peet) from members of the Raley's street team.

A Christmas tree lighting meets Foursquare 

The street team promotion on Black Friday came just two days before what is a big annual event for Raley's and the Sacramento area.

That event, held the night before Thanksgiving on November 23, is the annual Raley's-sponsored Theatre of Lights Christmas Tree lighting in Old Sacramento, which is an historic and popular part of the city that dates back to the California Gold Rush era of the 1800's. [Kati Garner, a writer for the local Sacramento Press blog has a write up and great photographs of the event, which was attended by over 4,000 people, here]

Raley's Stores, which also uses the Foursquare social media site in addition to Facebook and Twitter, offered consumers a $5 digital coupon if they checked in on their smart phones at its Foursquare home while attending the tree lighting event on November 23.

'Tis the season

The less than two month Thanksgiving through New Year's Day holiday selling season offers a huge opportunity for food and grocery retailers in the U.S. The three holidays are numbers one, two and three respectively in terms of the amount of money consumers spend on food, compared to all other holidays, for example.

But this opportunity, like most do, also comes with challenges, the big one for grocers being the fierce competition out there during this time of year. Every grocer knows, after all, what we just told you, which is that the period from mid-November to the end of December is a time when grocery shoppers are spending big. And each grocery chain wants the majority of those holiday food dollars to be spent in its stores, which generally means heavy promoting.

And, usually, to the victor go the spoils.

Beyond the season

Raley's is currently conducting a number of promotions in addition to those we've highlighted. One of the things the Raley's promotions we've discussed in this piece have in common is that each one also offers a secondary marketing/branding element to them for the chain, although we doubt the grocer planned it that way.

For example, the new-school digital and social media promotions help better brand Raley's as a modern and high-tech savvy of grocer, while the old-school street team event is a reminder of the high-touch aspect of the retailer.

And the generous food drive and assistance program to help the hungry, both in its digital and non-digital aspects, continues to brand Raley's as a caring grocer that helps people in the communities where it has its stores.

Raley's has been struggling financially for the last three or so years. Last year Michael Teel returned as CEO of the 75-year-old-plus family-owned grocer founded by his grandfather and owned by his mother, and has since been leading a reorganization strategy.

It's difficult to know how the plan is working because being closely-held Raley's does not release revenue or profit/loss information. Teel previously was CEO of Raley's in the 1980's-90's. He left to persue a variety of other business interests.

On the cost-cutting side of the balance sheet Raley's has so far gotten by fairly lightly, laying off about 300 people at its corporate headquarters and closing a few stores, in addition to most-recently announcing it will no longer pay health benefits for its retired except employees. Store-level workers, which comprise the vast majority of the grocery chain's employees, belong to the UFCW union. Therefore the move doesn't affect those already retired or future retirees.

As part of the restructuring which began last year when Teel took over as CEO, he flattened the organizational structure, eliminating many senior-level people, including in the marketing, buying and merchandising departments at the corporate headquarters in West Sacramento.

The move seems to have worked in our observation and analysis because since then Raley's marketing, merchandising and promotional activity has gotten not only better but more creative, along with becoming much more aggressive, as evidenced in part by the programs featured in this story.

The retailer has also sharpened its everyday pricing profile since early 2010, along with offering improved promotional prices on the items it advertises in its multi-page weekly advertising circular, among having made a number of other changes for the better.

The competition in Northern California, where the majority of the stores are located, is only going to get tougher, beginning next year, so Raley's will need to, among other things, continue sharpening its pricing pencil, along with continuing down the path it been on for a little over a year in developing, launching and implementing creative and effective promotions, both for the holidays and everyday, in order to meet the new challenges and increased competition coming its way.


[Editor's Note: It's a brave new high-tech, digital, social media world out there for food and grocery retailers. And the new tools offer retailers a myriad of new ways to promote their stores for the holidays. Between now and the end of December we'll be running a number of stories focusing on many of these new technologies, using the theme in the sub-head at the top of this story - Turkey & Technology to identify the stories. This piece about Raley's is our first.]

More Reshuffling: Number Two Marketing Exec Follows CMO Uwins Out the Door at Tesco's Fresh & Easy Neighborhood Market

Tesco's Fresh & Easy celebrated birthday number four November 9.



The top-level management reshuffling and integration of the marketing function into a new combination buying-merchandising-marketing department headed by chief customer officer and former chief commercial (buying and merchandising) officer John Burry continues at Tesco's Fresh & Easy Neighborhood Market.

The latest departure from the Fresh & Easy's El Segundo, California headquarters is marketing operations director Paul Madarieta, who was the number two marketing executive in what was until a couple weeks ago the standalone marketing department.

Madarieta, now gone, reported directly to former chief marketing officer (CMO) Simon Uwins, who as we were the first to report in this story on November 10 left Fresh & Easy and Tesco in a top-level shakeup initiated by Philip Clarke, the CEO of Tesco, and Tesco group deputy CEO/chief marketing officer Tim Mason, who's also the CEO of Fresh & Easy Neighborhood Market.

Madarieta joined Fresh & Easy in late 2007 in a retail operations capacity. His title before moving into marketing was regional director of California stores.

He was later brought into the grocery chain's corporate marketing department by CEO Mason, who, according to our sources, believed his knowledge of retail operations, particularly in California, and high-level of enthusiasm would make him a good addition to the department and to the grocery chain's marketing efforts.

Mason, who since March of this year has been Tesco's chief marketing officer and deputy CEO, in addition to remaining CEO of Fresh & Easy, was the United Kingdom-based global retailer's chief marketing officer before coming to California in 2006 to start up Fresh & as its founding CEO.

Madarieta became Fresh & Easy's marketing operations director in January 2010.

As part of the shake up that resulted in Simon Uwins' leaving Fresh & Easy (see here), Madarieta was offered a lessor position in the new, combined department being headed up by John Burry, which he ultimately declined, instead leaving the 184-store fresh food and grocery chain, according to our sources.

Madarieta's position, like that of his former boss Simon Uwins, has been eliminated by Tesco's Fresh & Easy Neighborhood Market.

Fresh & Easy Neighborhood market recently posted an advertisement for a marketing analyst, a position that pays considerably less a salary than the former marketing operations director position, and a whole lot less than the chief marketing officer position formerly held by Uwins. The marketing analyst will work in the new joint commercial (buying-merchandising)-marketing department being headed up by chief customer officer John Burry.

Prior to joining Tesco's Fresh & Easy, Paul Madarieta spent a number of years working for iconic specialty grocer Trader Joe's, which Fresh & Easy Neighborhood Market has sought to emulate in a number of operational and merchandising ways, ranging from store size and look and its focus on private brands, to putting an emphasis on the wine category, among others.

Madarieta started out as a crew member (store clerk) at Trader Joe's. He later became a store captain (store manager), and from there was promoted to a regional vice president position with the Southern California-based grocery chain.

Fresh & Easy Neighborhood Market has hired a number of former Trader Joe's employees.

For example, Larry Biggerstaff, Fresh & Easy's current director of grocery buying and merchandising (reporting to John Burry), was the vice president of merchandising at Trader Joe's prior to joining El Segundo, California-based Fresh & Easy Neighborhood Market last year, as we reported in this September 11, 2010 story - Ex-Trader Joe's VP, Winn-Dixie Exec Larry Biggerstaff New Director of Grocery at Tesco's Fresh & Easy Neighborhood Market.

A number of category managers and buyers at Fresh & Easy also have previously worked for Trader Joe's, which is headquartered in the Southern California city of Monrovia.

For example, in the November 10 story about Simon Uwins' departure, we mentioned that three key mid-level headquarters employees had also recently left the grocery chain.

One of the employees who left in the last 60 days is Mei-Lon Jimenez, who until her departure was the category manager for bakery at Fresh & Easy, and prior to joining the grocery chain worked for Trader Joe's.

In her position at Fresh & Easy Neighborhood Market, Jimenez played a significant role in the start up of the new in-store bakery departments the grocer is putting in many of its stores. We broke the news about the bakery development in this May 18, 2011 story. Fresh & Easy started the in-store bakery installations late this summer. It's on the record as saying its goal is to have the bakeries in about 100 of its 184 grocery markets by the end of this year.

The former Fresh & Easy bakery category manager is now working for the Coles supermarket chain in Australia.

We discovered she joined the down-under supermarket chain two weeks ago when Coles' posted her name on a portion of its website, listing her as its new category manager for cheese. A senior executive at the supermarket chain confirmed the posting. She started at the down-under chain last week, according to the source.

Coles' is headed up by former British supermarket executive Ian McLeod. Its senior management team includes numerous veterans of the food and grocery retailing business in the United Kingdom, including Tesco, as we detailed in this December 25, 2009 piece: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell.

Another related Coles-Tesco Fresh & Easy angle: Charlotte Maxwell, who worked for Tesco for nine years and was the director of grocery buying and merchandising at Fresh & Easy from 2006 until August 22, 2008, joined Coles in April 2009 as its general manager of deli and bakery, which includes cheese. Ironically, she left Coles (about 30 days ago) to pursue other occupational opportunities. (Click here to read about Ms. Maxwell's departure from Tesco's Fresh & Easy and her joining Coles in Australia.)

With the departure of the number one (Simon Uwins) and two (Paul Madarieta) marketing executives at Fresh & Easy Neighborhood Market, chief customer officer John Burry has taken on the dual-responsibility for the corporate commercial (buying and merchandising) and marketing functions at the Tesco-owned chain, as we reported in our November 10 story.

Additionally, as we noted in the story, Tim Lee, who's been Fresh & Easy's director of fresh foods, reporting to Burry, is stepping in as a key player in the grocery chain's marketing efforts. He continues to report to Burry

Lee is being replaced as director of fresh foods by Ian Fletcher, who previously was in charge of Fresh & Easy's kitchen operation. He too reports to John Burry, as does Lee and director of grocery Larry Biggerstaff.

From a balance sheet (cost savings) perspective, Uwins' salary is being absorbed into Burry's, perhaps with a slight bump, while Madarieta's position and salary will essentially be absorbed by Tim Lee. As previously noted, the two marketing positions have been eliminated.

Tesco will report its 2011/12 fiscal year third quarter results on December 8, although it won't likely offer specific sales and loss numbers for Fresh & Easy, as it generally doesn't do so except when reporting half (interim) and full-year results.

On October 5, 2011 Tesco reported a fiscal 2011/12 half-year loss of $112 million for Fresh & Easy, on sales of $470 million. The loss is 21-23% (depending on how recorded) lower than the one reported for Fresh & Easy for the same period in the previous fiscal year.

The United Kingdom-based global retailer's CEO, Philip Clarke, says Tesco will break-even with Fresh & Easy Neighborhood Market by the end of the 2012/13 fiscal year, which is 15 months away. The 2012/13 fiscal year ends February 2013. Tesco reports its sales and profits/loss for the year in April 2013.

Post Script: Take a look at prediction number 7 in this story from last year - December 30, 2010: Seven Predictions For Tesco's Fresh & Easy Neighborhood Market For 2011.

Also see these columns by our 'The Insider' columnist, all published before Philip Clarke became CEO of Tesco in March 2011:

>October 8, 2010: Incoming Tesco CEO Philip Clarke Needs to 'Imagine' When it Comes to Fresh & Easy Neighborhood Market USA

>September 13, 2010: Reading Philip Clarke's Tea Leaves: Might A Mixed Corporate/Franchise Model Be in Fresh & Easy Neighborhood Market's Future?

>June 12, 2010: Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

Additional Related Stories

November 17, 2011: 'Meat Guru'-Category Manager Bill Arnold Out at Fresh & Easy Neighborhood Market

November 10, 2011: Chief Marketing Officer Uwins Out in Top-Level Reshuffling at Tesco's Fresh & Easy Neighborhood Market.

October 27, 2011: Former Meat Buyer Wins $400,000-Plus Legal Judgment From Fresh & Easy Neighborhood Market

February 23, 2011: Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market

February 28, 2011: Changing of the Guard: Clarke Takes Over the Reins as Tesco CEO Wednesday

Click on this link - Fresh and Easy headquarters personel changes - for more related stories.

[Photo credit: Fresh & Easy Neighborhood Market.]

Andronico's to Close Another Store in Berkeley as Part of 'Comeback' Strategy

The Insider - Heard on the Street

On October 17, 2011 San Francisco Bay area-based Andronico's Community Markets and its new owner, Renovo Capital, said in a press release announcing the closing of its store on University Avenue in Berkeley, California that it didn't plan on closing any of the shrinking grocery chain's remaining three stores in the University city (Cal Berkeley) where it's had a major presence for decades with four supermarkets.

In my column the following day - October 18, 2011: May-to-October at 82-Year-Old Andronico's Markets: New Owner, 2 Stores Closed ... Now What? - I said this (below in italics):

"The new owner (investment firms Renovco Capital and Rosewood Private Investments) said yesterday that it doesn't plan to close any of the remaining three stores in Berkeley. But it wouldn't surprise me in the least bit if the investment firms aren't forced soon to close one of the remaining three Andronico's stores in the city, even though I believe it would like to keep all three for reasons of having a better retailing critical mass in Berkeley.

My predicted candidate for closure in Berkeley, if it comes, is the Telegraph Avenue Andronico's unit, which over the last couple years has lost considerable sales to a nearby Whole Foods Market store and Berkeley Bowl, a very popular and high volume local two-store independent grocer. Both Berkeley Bowl stores are located in the city."

Yesterday, Andronico's said in a prepared statement that it will close the Telegraph Avenue store in Berkeley.

Adam Alberti, who's acting as a spokesperson for the grocer and its new owner, said yesterday that the specific date the store will be closed has yet to be determined. I'm told by my sources though that Andronico's will most likely close the Telegraph Avenue store by the end of the year.

The closing of the Berkeley supermarket leaves Andronico's with just five stores - two units in Berkeley (East Bay area) and one store each in San Francisco, Los Altos (South Bay Area) and San Anselmo (Marin County) - down from a high of 14 units less than a decade ago.

Prior to July 2011 there were eight Andronico's grocery stores in the San Francisco Bay Area.

So far this year Andronico's has closed three supermarkets - a unit in Palo Alto in July, the store on University Avenue in Berkeley last month, and now the Telegraph Avenue-Berkeley store, which of the three was the largest unit in terms of square-footage.

In a follow-up column on October 30 - 'The Insider' Offers Some Advice He Suggests the New Owners of Northern California's Andronico's Markets Should Take Post-Haste - I offered Renovco Capital and Bill Andronico (who remains president of the grocery chain his family owned for 82-years until last month) a five-step playbook of suggested actions to take immediately regarding the turning around of Andronico's.

One of those action steps including the closing of an additional store, as you can read in the October 30 column linked above.

I also suggested Andronico's senior management team do a complete review of the chain's operations, marketing, merchandising and promotional functions. The closing of the Telegraph Avenue store is part of that evaluation process, which began around the first week of November.

If you bake it will they come? A selection of cakes on display in the bakery at an Andronico's store this month.

Additionally, I had a chance to visit two of the Andronico's Community Markets stores last week - the unit in San Francisco's Inner Sunset District and the store on Shattuck Avenue in Berkeley.

Both stores were fully-stocked and ready for the Thanksgiving holiday. The fresh foods departments - produce, meat, bakery and deli-prepared foods - all looked good, as did the numerous displays throughout the store.

Andronico's is using the signs above to communicate to shoppers it's stocking the stores and back in business.

When I last visited the two stores in late summer, they were looking a bit rugged, although not nearly as bad as the University Avenue store in Berkeley closed last month and the Telegraph Avenue store set to close did at the time.

But last week the two stores I visited - and I have a history of knowing what the two units look like at their best - were attractive and well-merchandised.

In my first column about Andronico's financial struggles, on May 30, 2011 here - 82-Year-Old Grocer Andronico's Needs A Sugar Daddy of Sorts: 'The Insider' Suggest Tesco and its Fresh & Easy Neighborhood Market Might Fit the Bill - I suggested one of the first things the grocer should do was to establish a social media presence, particularly on Facebook and Twitter, which is something it wasn't doing at the time.

As I noted in my October 30 column, three weeks later, on June 20, Andronico's Community Markets became active with a Facebook page, and on July 29 launched a feed on Twitter (@andronicos1).

In that same October 30 column (as one of the five action steps I suggested the grocer take immediately), I suggested Andronico's "Hold a 'Thanksgiving' community celebration at each store, thanking shoppers for sticking with Andronico's through tough times - and letting them know better days are coming soon," along with promoting the events on its Facebook page and Twitter feed.

Andronico's did just that in mid-November. For example, take a look (here) at the Thanksgiving-themed customer appreciation days the grocer has been hosting at its stores this month and promoting on its Facebook page. The grocer also used its Twitter feed to promote the "Thanksgiving" customer thank you events.

Andronico's also took advantage today of the nationwide small business Saturday event that's being promoted as the shop locally/small business version of Black Friday.

The grocer created the attractive poster pictured at top to promote the event, touting its stores as the place to shop locally for food and groceries today.

Andronico's Community Markets has also been conducting a variety of special promotions in its stores over the last few weeks, including a fall food festival at its Shattuck Avenue store in Berkeley that featured food samplings from the store's fresh foods departments and tastings conducted by numerous specialty foods vendors, like Dulce Chutney, pictured above.

The event also featured local guitarist Lucas Gonze (below) performing in the wine and spirits department at the Shattuck Avenue-Berkeley Andronico's store.

It's been about a month since Renovco Capital officially took over ownership of Andronico's, although its been providing financing for the small chain since around August-September of this year.

The senior management team and store employees have hit the ground running in the last 4-6 weeks, getting the remaining stores back in shape and promoting the "Comeback."

There's much more to do - and I will elaborate on my playbook for Andronico's, which I began in my May 30 column, continued on October 15 and October 30, and recapped here today, in the near future.

The future looks much better for Andronico's Community Markets (I still think the new owner should drop the community markets from the name and return back to the original Andronico's Markets) than it did just a couple months ago. But, as noted - there's still a long way to go in what is a very competitive market region.

Related Stories

October 30, 2011: 'The Insider' Offers Some Advice He Suggests the New Owners of Northern California's Andronico's Markets Should Take Post-Haste

October 18, 2011: Look for Fresh & Easy Neighborhood Market to Grab Closing University Avenue Andronico's Supermarket in Berkeley CA ... If it Can

October 18, 2011: May-to-October at 82-Year-Old Andronico's Markets: New Owner, 2 Stores Closed ... Now What?

May 30, 2011: 82-Year-Old Grocer Andronico's Needs A Sugar Daddy of Sorts: 'The Insider' Suggest Tesco and its Fresh & Easy Neighborhood Market Might Fit the Bill

>You can read all of our 'The Insider' columns at this link -  The Insider - along with all past coverage about Andronico's here.

Happy Thanksgiving ... From Fresh & Easy Buzz

Tesco and its Fresh & Easy Chain Hoping 'Seven' is the Lucky Number For 'Fresh & Easy Express'

Construction on the Fresh & Easy Express store at Victory Boulevard and Buena Vista Street in Burbank, California, pictured above and below, is in full swing. The store is set for an early 2012 opening. The photos were taken by a Fresh & Easy Buzz correspondent on November 18, 2011. Note the "now hiring" banner in the photo below. [Photo credit: Fresh & Easy Buzz.]

Tesco's Fresh & Easy Neighborhood Market opened its first 3,000 square-foot (of selling space within a 4,000 square-foot interior space) Fresh & Easy Express format store at La Cienega Boulevard and 18th Street (1788 S. La Cienega Blvd.) in Los Angeles, California on November 2.

[See - November 1, 2011: Analysis: Tesco Opens First 'Fresh & Easy Express' Store Tomorrow in Los Angeles ... So What ... ? and November 2, 2011: Open in Los Angeles: A Look at the First 'Fresh & Easy Express' Store for details.]

Over the last week or so we've received e-mails from numerous Fresh & Easy Buzz readers, asking how many additional 'Express' stores Tesco's Fresh & Easy Neighborhood Market currently plans to open.

As we've previously reported, including most recently in our November 1, 2011 piece linked above, we've discovered an additional six Fresh & Easy Express stores Tesco and its Fresh & Easy chain plan to open next year, for a total of seven units thus far. All seven stores are in Southern California.

As a service to our readers, we've identified the specific locations of the additional six Fresh & Easy Express stores Tesco's Fresh & Easy currently plans to open.

Listed below are the addresses of all seven 'Express' units - the store opened November 2 and the six additional units planned thus far.

Tesco's Fresh & Easy has not publicly announced the specific locations of the six of the additional 'Express' stores to date. Therefore, we believe you're seeing all six locations for the first time here.

1. Los Angeles
La Cienega Boulevard and 18th Street
Los Angeles County
(Opened November 2, 2011)

2. Los Angeles
Figuera Street and Jeffferson Boulevard (near USC campus)
Los Angeles County

3. Los Angeles/San Pedro
Sixth and Gaffey Streets
Los Angeles County

4. Burbank
Victory Boulevard and Buena Vista Street
Los Angeles County

5. Hermosa Beach
Pacific Coast Highway and 8th Street
Los Angeles County.

6. Laguna Niguel
Crown Valley Parkway and Golden Street
Orange County.

7. Seal Beach
800 Pacific Coast Highway and Main Street
Orange County


The Burbank Fresh & Easy Express unit, pictured above and at top, is in a strip mall.  It will be the only grocery market in the small strip center. There's a Kroger-owned Ralphs supermarket across the street. Ralphs' is the leading grocery chain in Southern California. [Photo credit: Fresh & Easy Buzz 11/18/11.]

Fresh & Easy Neighborhood Market is currently preparing three of the six yet-to-be-opened 'Express' format stores listed above - the Figuera Street and Jeffferson Boulevard store in Los Angeles; the Pacific Coast Highway and 8th Street unit in Hermosa Beach; and the Victory Boulevard and Buena Vista Street location in Burbank - for early 2012 openings, as we noted in this story on November 15.

Fresh & Easy has also started hiring employees for the three 'Express' stores.

In addition to the seven Fresh & Easy Express locations, the 184-store fresh food and grocery chain continues to look for additional sites in California where it might locate the micro-small-format stores, which are a scaled-down version of the 10,000 square-foot standard Fresh & Easy markets.

The Fresh & Easy Express stores offer all the product categories - dry grocery, perishables, produce, meat, beer and wine, fresh-prepared foods - that the standard version Fresh & Easy stores do, but in an edited version.

For example, the 10,000 square-foot markets stock about 5,500 SKUs. In contrast, the Fresh & Easy Express format features about 2,500-2700 SKUs in the 3,000 square-feet of selling space.

The 'Express' store opened on November 2 in Los Angeles also has an in-store bakery and self-service coffee bar, which are features Tesco's Fresh & Easy is adding to about 100 of its stores. According to our sources, plans are for all of the Fresh & Easy Express stores to include the bakeries and coffee bars.

Tesco and its Fresh & Easy chain have said the Fresh & Easy Express format is a test.

However, Tim Mason, the CEO of Fresh & Easy Neighborhood Market and Tesco's group deputy CEO-chief marketing officer, said last year and again this year (see here and here) that Fresh & Easy could open as many as 70 new stores in the Los Angeles area over the next couple years.

Fresh & Easy has opened a handful of new stores in Los Angeles this year, with some planned there for next year. Many of the 70 potential units Mason is referring to would be Fresh & Easy Express stores, according to the information we have.

But for now its a total of seven Fresh & Easy Express stores that Tesco's Fresh & Easy plans to have open and operating in 2012.

And ... Tesco and its Fresh & Easy Neighborhood Market chain are hoping it's the 'Lucky Number Seven' when it comes to its Fresh & Easy Express format.

'Friends' Card Problems Make it Even More Difficult to Earn A Little 'Loyalty' at Fresh & Easy Neighborhood Market

Analysis & Commentary

On June 30 of this year we broke the news in this story [Tesco's Fresh & Easy Neighborhood Market Developing Loyalty Card Program it's Planning to Launch This Year] that Tesco's Fresh & Easy Neighborhood Market would be launching a customer loyalty-rewards program and card this year.

On July 18, 2011, the grocery chain confirmed our report in a press release, announcing its plans to test such a card in its seven stores in the Bakersfield, California region in October, with a chainwide roll out to follow before the end of the year.

Fresh & Easy "tested" its "Friends" loyalty-rewards card very briefly in the Bakersfield-area stores in early October, deciding to launch the card, which offers customers points they can then redeem for cash discounts in the stores, shortly thereafter, saying the brief test went so well they decided to take the card chainwide earlier than originally planned.

As part of our detailed June 30, 2011 story, we noted the comments below, which came from a source in a good position to speak about the loyalty/rewards program's development at Tesco's Fresh & Easy:

"In fact, one of our sources who's familiar with Fresh & Easy's loyalty program tells us, from the source's perspective, the program lacks expertise from a marketing, information technology and software delivery standpoint. And when it comes to loyalty programs, IT, software performance and marketing are about all that matters. Therefore, in the source's view, Fresh & Easy's loyalty program is far from ready for prime time." (Read the entire story for the full context of the paragraph above.)

Our source was, as they like to say across the pond ... "spot on."

Fresh & Easy Neighborhood Market's launching of the card has been plagued by problems, some of which we've tweeted about periodically on our Twitter feed since the October launch.

Since the launch last month, we've heard from numerous readers who've experienced various problems signing up for the card online, along with, in the case of those who didn't give up on the online sign-up process completely, having problems loading the digital points on the card, and for those who achieved that, then redeeming the cash reward points in-store.

We've also observed the problems first-hand in various Fresh & Easy stores we've visited, where we've talked to both customers and employees about the card's introduction and problems.

We also conducted an online sign-up process in-house here at Fresh & Easy Buzz to test it. The result: Numerous problems, most of which are described in this piece.

Fresh & Easy customers who've signed-up for the card in-store have reported a less painful process than those attempting to do so online, based on our reporting.

We haven't written about the problems with Fresh & Easy's loyalty card - the first heads up which was given in our June 30 story - in the blog until now for two reasons - (1) we haven't had a chance to yet (it's been a busy month), and (2) we wanted to give the grocer a decent period of time to fix the problems, which are at their most basic and most immediate technological, but also are systemic with the loyalty card scheme itself, in our analysis.

That systemic aspect has at its heart two things: The rewards points are just too low from a relative perspective, and the entire card scheme is way to complicated. Both can be fixed - and should be soon.

Nancy Luna, a writer-blogger for the Orange County Register newspaper in Southern California has been hearing similar complaints from her readers, along with experiencing the technological and related problems with the "Friends" card directly.

She wrote about her own experiences with the card today (see here). In her piece Luna also offers a number of comments from readers about their experiences signing up for and using the "Friends" card.

For her story, Fresh & Easy Neighborhood Market's corporate spokesman tells the writer that the main problem with the loyalty card has been a faulty magnetic strip on the back of the physical card, which he says the grocer is fixing with the next batch of plastic cards it orders.

But the problems we've identified since the October launch go far beyond just the magnetic strip on the plastic card.

Those problems include: difficulty with the online sign-up (Fresh & Easy's twitter feed has been filled with customer requests for assistance with this process since the card was launched in October, for example), not getting proper discounts in-store and a number of others, many of which are the same complaints voiced by Ms. Luna's readers in her piece today and communicated to use by readers of Fresh & Easy Buzz and others.

Tip: One reader told us he's solved the magnetic-strip problem by using the scanner-price gun at the checkout stand to read his "Friends" card because the card reader won't read it when it's swiped.

Fresh & Easy's loyalty-rewards card was developed in-house and by its Dunnhumby firm in the United Kingdom, which it now owns 100% of. Dunnhumby has an office in the U.S., in Ohio, but could not develop the card for Fresh & Easy because the U.S. branch has an exclusive loyalty card program deal with Kroger Co., as we noted in our June 30 story.

It's clear our source was correct in June when he said the technology behind Fresh & Easy's loyalty card was not ready for prime time, evidenced by the numerous problems consumers are having signing up for it and using it in the stores.

We should say the rank-and-file employees at Tesco's Fresh & Easy - from the people answering the many complaints and questions on Twitter to the workers in the stores - have been working hard and doing their best to fix the problems and make the card work for customers.

But we should also say: They shouldn't have to be using their time to do so. Senior management and CEO Tim Mason should have made sure the card, the technology behind it, and the launch was "ready for prime time."

Why then did CEO Tim Mason decide to launch the "Friends" card chainwide in October?

He was made aware of the potential technological problems, our sources say, including the one who gave the heads up in June. And, of course, the caution was right there in our June 30 story, for all to see. The blog does get a number of daily hits from the El Segundo, California USA zip code.

We can't answer that question fully, although a prime motivator behind the card is the hope among senior management that it will allow Fresh & Easy to stop issuing its deep-discount store coupons on a chronic basis.

That hasn't been the case so far this month however. The grocer has issued online coupons good for $10-off purchases of $50 or more coupons via its "Friends" e-mail program four times this month. The first one coming out November 2, followed by another voucher on November 9, a $10-off-$50 coupon on November 16, and another of the same value today. Fresh & Easy has also distributed the coupons in its paper-version advertising circulars this month.

But specific motivations aside, this isn't the first time Fresh & Easy has launched a program it wasn't ready to handle, although this is the first major instance of doing so in a big way in the Philip Clarke era.

Clarke replaced Terry Leahy as CEO of United Kingdom-based Tesco in March of this year. Fresh & Easy Neighborhood Market was Leahy's baby, and was launched in the U.S. in 2006, the first stores opening in November 2007. There are currently 184 Fresh & Easy markets in California (135 stores), Nevada (21 units) and Arizona (28 stores).

Since becoming CEO of parent company Tesco, Clarke has taken a very hands-on approach with Fresh & Easy, which in his previous positions as head of corporate IT and chief of European and Asian retail operations at the United Kingdom-based retailer he had virtually no involvement with from 2006-2010.

For example, Clarke visits Fresh & Easy's corporate headquarters in El Segundo, California and the distribution campus in Riverside County near-monthly, along with visiting stores regularly when he's in Southern California. Three of his regular stops, for example, are the Fresh & Easy markets in Manhattan Beach, Burbank and Whittier, where he talks with employees regularly.

Clarke has also initiated numerous changes at Fresh & Easy, the in-store bakeries and coffee bars being installed in about 100 of the 184 stores being two of the most significant, since becoming CEO of Tesco in March.

The loyalty card is also something he promoted, as it takes as its inspiration Tesco's ClubCard, which has proven to be very successful for the retailer in the UK. Leahy, Clarke and Mason are all big fans of the Tesco card.

But the Fresh & Easy "Friends" card is a card of a different matter - it's a different type of loyalty card (100% rewards) for a different type of grocery chain (small-format only; Tesco operates multiple formats in the UK) that's located in another country (the U.S. and not the UK.)

The "Friends" card program problems we describe and those described in the Orange County Register story have existed since the first day of the chainwide launch in October. Whatever test there was in Bakersfield obviously didn't serve any real purpose. Tests are supposed to spot such technological problems, after all.

We've talked to a number customers who like the card despite the problems - although most tell us they feel it's too complicated a scheme, and that the points aren't high enough relative to purchase amounts to make the savings significant.

For example, it takes 500 points to equal a $5 discount.

We don't think this is a particularly insignificant discount, based on our experience in the industry. However, Fresh & Easy shoppers are used to getting coupons from the grocer for $5 off purchases of $20 or more, so their frame of reference regarding it taking 500 points, which requires a shopper to spend $100 to obtain, is based on the coupon value they've been getting regularly for years in the "friends of Fresh&easy" e-mail-based program, which the loyalty card is now the central aspect of. From that perspective, we understand why many customers feel requiring 500 points to get a $5 cash discount is too low in terms of the spend-to-points ratio.

Fresh & Easy has heard this complaint from customers because it's now offering two-times the regular point value on the card between now and the end of the holidays. However, come January 1 the grocery chain is going to have to figure out what to do about the point value, because it is something many shoppers are not happy with.

Additionally, the more points Fresh & Easy offers on the card, the more discounts it gives out. Those discounts to customers don't come out of thin air or from the Tesco Santa Claus. Instead, the discounts come out of Fresh & Easy's gross margins.

For example, Fresh & Easy is offering Jenni-O frozen turkeys for 39-cents pound, which is already at or below the grocer's cost. Last week they gave 500 bonus points to "Friends" card holders who bought one of the birds, which is a $5 cash discount that can be redeemed in-store.

But Fresh & Easy also issued a $10-off $50 store coupon the same week, which can be used to turn a $50 purchase, which might include a frozen Jennie-O turkey or two, into a $40 purchase.

The point: All these discounts come out of margin, which at Fresh & Easy must be raised demonstrably from its current negative 30%-plus level (trading margin) in order for Tesco to meet its objective of breaking even with the chain by February 2013, the goal CEO Clarke has set. Heavy discounting like that described above makes achieving that extremely difficult.

These technological problems with the "Friends" card can be fixed, although its late November and they haven't all been fixed yet. But damage has already been done.

In terms of the overall loyalty/rewards card scheme, simple and significant are two key variables for any successful program. Therefore, Fresh & Easy must make its program more simple overall and make the points system more significant to shoppers, if it wants the card to do what it hopes it will do. And it needs to do that soon.

Meanwhile, as we were the first to report in this story on November 10 [Chief Marketing Officer Uwins Out in Top-Level Reshuffling at Tesco's Fresh & Easy Neighborhood Market], Simon Uwins, who was Fresh & Easy's cheif marketing officer and had ultimate responsibility for the launch of the loyalty card program, has left the grocery chain.

Responsibility for the loyalty scheme now falls to John Burry, who has taken on the marketing responsibility at Fresh & Easy, along with keeping his previous responsibility as the grocer's chief commercial officer (head of buying and merchandising). His new title is chief customer officer.

Burry, who had a very full plate already - the center of which features a heaping serving of gross margin improvement as job one - must now make room on that plate for fixing the loyalty card program, which was Uwins' ultimate responsibility before he left two weeks ago.

We will offer some detailed analysis on the loyalty card program at Fresh & Easy in an upcoming story.

But for now the difficulties couldn't come at a worse time for the chain. The October-December holiday sales period is a key selling season for all grocery chains, and particularly for Fresh & Easy because it needs to hit sales goals that have been set relatively high for the period.

Fresh & Easy's employees need to be focused 100% on merchandising and in-store customer service for the Thanksgiving and Christmas period, which are the top two sales holidays in the grocery business in the U.S., rather than having to spend valuable time dealing with technological problems related to what was too early of a chainwide roll-out of its loyalty card, which is something the source in our June, 2011 story made clear for all to read - offering it as an intentional heads up.

Related Stories

November 18, 2011: Fresh & Easy Neighborhood Market Combining Big Seasonal Foods Assortment With Promos and Discounts to Lure Holiday Shoppers

July 17, 2011: Send in the Clowns: Did You Hear the One About Fresh & Easy Neighborhood Market Launching A Customer Loyalty Program?

June 30, 2011: Tesco's Fresh & Easy Neighborhood Market Developing Loyalty Card Program it's Planning to Launch This Year

February 2, 2010: Dunnhumby; Trial Balloons By Media; and Fresh & Easy's Loyalty Card Marketing Trap

December 8, 2009: Analysis: Why A Loyalty Club Card Program Makes Zero-Sense For Tesco's Fresh & Easy USA.

One-Year On: Bristol Farms Adds 4,500 New Natural, Organic, Local and Gluten-Free Items to its Stores

Click on the letter above from CEO Kevin Davis to enlarge it.

Southern California Market Region

It's been about one year since Bristol Farms' senior management team and the private equity firm Endeavour Capital acquired the Southern California-based specialty grocery chain from Supervalu, Inc., which obtained the trend-setting upscale chain some years' earlier as part of its buyout, in partnership with the Cerberus private equity firm, CVS Pharmacy and a couple other players, of Boise, Idaho-based Albertson's Inc.

As we wrote about in detail in this story last year - October 29, 2010: CEO Kevin Davis, Execs and Investment Firm Buy Upscale Southern California Bristol Farms Chain From Supervalu, Inc. - the deal to buy Bristol Farms from parent Supervalu was quarter-backed by CEO and President Kevin Davis, who spent many years at the specialty grocery chain while it went through numerous ownership changes.

Davis has an extensive background in the food-grocery retailing business in Southern California, including working as a store manager, district manager, corporate vice president of sales/advertising and senior vice president of marketing at Ralphs, which is the largest grocery chain in the region.

Kevin Davis joined Bristol Farms after leaving Ralphs, which he first joined in 1974 as a retail grocery clerk. Kroger Co. bought the Ralphs and the Food 4 Less chains in Southern California from billionaire supermarket industry investment guru Ron Burkle in the 1980's.

This month, a year after he, his management team and the investment firm took over ownership of Bristol Farms, Davis is announcing what he says is the launching of the specialty grocery chain's "most important change to our merchandising plan in our 28 year history."

That change, Davis says in a letter to customers and potential customers featured at the top of this week's Bristol Farms' advertising circular (see at top), is the "adding of over 4,500 new organic, natural, local and gluten-free products, combined with more specials and more everyday values on key brands throughout the store."

"We’ve added more shelves, more items, more variety, and more value to the extraordinary products and unique Bristol style customer service our shoppers expect and deserve," Davis writes in the letter addressed to shoppers included in this week's (November 16-29) advertising circular, and posted at the top of this story.

The addition of the 4,500 new organic, natural, local and gluten-free SKUs into the 13 Bristol Farms stores (12 in Southern California and one in San Francisco) looks to be completed, based on visits we've made to three stores over the last couple weeks, and conversations with workers in those stores. Bristol Farms also operates a natural foods store in Santa Barbara under the Lazy Acres name.

Davis also wrote a brief post on the Bristol Farms company blog on November 8 announcing the merchandising initiative. The content of the advertising message to customers in this week's ad circular is taken from that post.

Bristol Farms has also unveiled the special logo - "Great Taste Just Got Better: More Organics, More Natural, More Local and More Value! - (pictured at top) as a way to tout and promote the addition of the 4,500 new SKUs in the respective product categories noted above.

The logo is being used throughout the grocer's stores, as well as on its website and in printed media materials.

The addition of the 4,500 new natural, organic, locally-produced and gluten-free products is a natural for Bristol Farms because the small chain's focus since the first store was opened in 1982 in Rolling Hills, California, has been on the specialty-natural-organic-fresh foods niches.

In its early days Bristol Farms became best-known for the numerous specialty and gourmet groceries it stocked in the stores, along with its extensive and high-quality fresh-prepared foods offering. Scouting and introducing unique specialty and gourmet food products remains something Bristol farms prides itself on doing.

The grocer built on this positioning and added more and more natural and organic products into the 1990's.

The 1990's, however, brought major new store growth to Southern California from natural-organic grocery chains like Whole Foods Market, Wild Oats Markets (now part of Whole Foods) and its Henry's Farmers Market chain (now part of Sprouts Farmers Market), along with others, therefore making Bristol Farms' specialty grocer niche one that's today occupied by a lot of competitors, including Whole Foods, Trader Joe's, Gelsons, Sprouts and others, such as Tesco's Fresh & Easy, which has opened 105 stores in Southern California since November 2007, and is increasingly being positioned by Tesco as a specialty grocery chain.

A focus on "local" in general, not just offering locally-produced products, has also been a hallmark of Bristol Farms popularity in Southern California.

For example, in 2000 when Bristol Farms' acquired the old Chasen's restaurant building in Beverly Hills/West Los Angeles, which was known as the gathering place for Hollywood's biggest stars, it incorporated many of the  famed eating and watering hole's existing design elements into the store it constructed , and that still stands at the location, including keeping the high-backed leather booths Chasen's was famous for, and re-using them in the store's restaurant-dining area. About a half-century ago then actor and future President Ronald Reagan proposed to his second wife, actress Nancy Davis (no relation to Kevin we're told), who became First Lady, while sitting in one of those booths during dinner at Chasen's.

A year earlier, in 1999 Bristol Farms acquired another landmark business, this one in Hollywood. The grocer retained many local elements of that landmark business, the former Chalet Gourmet, in the design of its grocery store at the location in Hollywood.

Earlier this year Kevin Davis said, in relation to the acquisition of Bristol Farms from Supervalu

He also said at the time the now "locally-owned" grocer was interested in opening additional locations in Northern California, where there's just one store in San Francisco, if the right location were to come along.

Our 'The Insider' columnist offered one suggestion for Bristol Farms' in Northern California in his May 30, 2011 column here. Andronico's new owners, Renovco Capital, which finalized its acquisition of the grocer at the end of October and is working fast and hard to turn the six-store San Francico Bay Area operation around, might be interested in talking turkey down the road.

The San Francisco Bristol Farms store is inside the big, vertical San Francisco Centre shopping mall on Market Street downtown. The store's focus in more on ready-to-eat and ready-to-heat fresh-prepared foods than it is on groceries, although it includes a small assortment of groceries, fresh foods and perishables. There's also seating inside the store, where breakfast, lunch and dinner is offered to eating-in as well as for take-out.

Since the October 2010 buyout, Bristol Farms has also been improving and beefing-up its in-store deli/fresh-prepared foods offering, which was already extensive. For example, the grocer recently introduced a new line of high protein and fiber-packed ready-to-eat "energy salads," featuring varieties like Italian Salad with Middle Eastern Couscous, Wheatberry Salad, Quinoa Salad and Edamame Tofu Salad.

Fresh bakery is another department where Bristol Farms has over the decades created a signature image. It was one of the first grocers in Southern California, for example, to introduce a full line of in-store baked fresh artisan breads, doing so in the 1980's.

Another in-store bakery feature Bristol Farms started many years ago - and it should use it more aggressively in its current marketing and merchandising efforts, in our analysis - is its "One of A Kind" baked goods program, in which it creates and offers a unique item that's generally not available at any of its competitors. A few of its "One of A Kind' baked goods items have included: Texas Chocolate Cake, Carrot and Pumpkin Cake, Bristol Farms' Gourmet Brownies and various unique varieties of fresh-baked scones.

Bristol Farms is also expanding its private brand program, developing and introducing more products under its "Bristol Farms" brand, such as a line of cookies it debuted this summer, which feature conventional varieties like chocolate chip, ginger, snickerdoodle and iced oatmeal, along with two certified organic vanilla and lemon wafers.

The specialty grocery chain also recently introduced a new line or organic fruit preserves under its "Bristol Farms" brand, and has expanded its own-brand line of organic herbs and spices as well.

The grocer is also branding many fresh meat, pork and poultry items under the "Bristol's Own" private brand, which is a new and more aggressive branding effort than its made with the categories in the past.

Bristol Farms finds itself independent and in a very competitive niche in Southern California.

Not only are there numerous grocers like Whole Foods, Trader Joe's, Tesco's Fresh & Easy, Gelsons and Sprouts focusing today on the specialty, natural, organic, fresh food and gluten-free categories - and have their own brands of products in the respective categories along with selling manufacturers' brands - the once very niche categories have become much more mainstream, which is why Safeway Stores, Inc., for example, features an extensive selection of specialty, natural and organic foods in its Lifestyle format Vons stores and more-upscale Vons Pavilions markets in Southern California, as does Kroger-owned Ralphs in its same-banner stores, as well as in its more-upscale Ralphs Fresh Fare units.

Both the Safeway and Kroger-owned chains (Vons and Ralphs, which are the top two grocers in the region) feature their own brands of organic, natural and premium food and grocery products as well. Supervalu-owned Albertsons, the third-largest grocery chain in Southern California by market share, also offers its own brand, Wild Harvest, of natural and organic food and grocery products.

Bristol Farms, now celebrating its first year of independence from Supervalu, Inc., has to carve out its own niche in competitive Southern California, having on one side the giants - Safeway (Vons), Kroger (Ralphs), Supervalu (Albertsons) - each offering a strong assortment of private-brand and manufacturer-branded specialty and organic foods in each of their respective chains - while the numerous specialty grocers in the market region - Whole Foods, Sprouts, Trader Joe's, Gelsons, Fresh & Easy and others - push at it with similar positioning and product offerings from the other end.

As a result, it's worth watching what Bristol Farms' management team, 17 members of which are now owners as well as employees, does in the coming year or two to attempt to differentiate the grocer from the specialty format-focused competitors noted above and others, while at the same time offering consumers a reason to shop at its stores, even though increasingly many of the same products it offers are available at the thousands of mainstream supermarkets and other format food and grocery stores in the region.

Fresh & Easy Neighborhood Market Combining Big Seasonal Foods Assortment With Promos and Discounts to Lure Holiday Shoppers

Holiday 2011 Merchandising & Promotion

Tesco's Fresh & Easy Neighborhood Market is out with an online (and print version) holiday food and drink guide that's packed full of seasonal fresh-prepared entrees, side-dishes, appetizers, ready-to-eat desserts, fresh meats, gourmet groceries, wines and more.

The Thanksgiving and Christmas season food and drink items featured in the holiday guide are set to be available beginning tomorrow, according to Fresh & Easy Neighborhood Market.

Fresh-prepared foods in abundance

Among the many product offerings in Fresh & Easy's 12-page online holiday food and drink guide, which you can view here, include an impressive assortment of its own-brand seasonal ready-to-eat and ready-to-heat refrigerated, fresh-prepared foods, made at its kitchen facility in Riverside County, California.

A small sampling of those offerings include: Roasted Butternut and Beet Salad ($6.99); Apple-Cranberry Stuffing ($6.99/26oz); Butternut Squash Risotto ($7.99/46oz); and Pumpkin Bisque ($3.69/22oz), along with numerous other Thanksgiving and Christmas dinner-themed fresh- prepared food items.

Baked goods, desserts and more 

The 184-store El Segundo, California-based fresh food and grocery chain is also offering numerous ready-to-eat holiday-themed desserts in its holiday food guide. For example, there's Pumpkin Cheesecake ($6.99/40oz); Traditional Italian Panettone Bread ($5.99/24oz); Pumpkin-Pecan Coffee Cake ($3.99/16oz); Eggnog Gelato ($2.99 pint); and much more.

There's also some very decadent gourmet desserts that can do double-duty as gifts, as well as for enjoying at home. For example, there's a Cranberry & Almond Carmel Apple, at $9.99 each - yes, that's each - and the Espresso Truffle Trio ($5.99/3oz).

The guide also features numerous holiday-oriented wines and other drinks, along with specialty seasonal coffees like Organic Ginger Bread Ground Coffee ($6.88/12oz).

Holiday meals - online ordering option

Fresh & Easy is also offering three fully-prepared holiday meals: A turkey dinner for eight, for $50; a ham dinner for eight ($45); and a beef rib roast dinner for eight ($65).

The turkey and beef roast dinners come with three side-dishes and gravy. The ham version comes with four sides and a honey-brown sugar glaze. There are 11 side-dishes shoppers can choose from.

The pre-cooked, ready-to-heat dinners can be ordered by shoppers online, as well as in the stores. The deadline for Thanksgiving is today, for pick up at the designated store from November 21-24.

Fresh & Easy hungry for holiday dollars

Tesco's Fresh & Easy Neighborhood Market is aggressively going after shoppers for the Thanksgiving holiday.

For example, it's offering Jennie-O brand frozen turkeys for 39-cents a pound, which (see out twitter feed) is the best price we've found so far in Northern California, and the second-best promotional offering we've found in Southern California, after the Superior Grocer's chain, which is offering branded whole frozen turkeys for 37-cents pound in its 30-plus supermarkets in the region.

Fresh & Easy is offering Jennie-O fresh turkeys for $1.19 pound. That price is at the low-end - but not the lowest promotional price - in California, Nevada and Arizona.

For example, Safeway stores (Safeway and Vons banners) in offering its Safeway Select brand fresh birds at 99-cents pound in all three states. Safeway has around 600 stores in California, Nevada and Arizona.

A couple other grocery chains in California, such as 133-store West Sacramento-based Raley's in the north, also have fresh birds (Raley's brand) on sale for 99-cents pound.

Fresh & Easy's $1.19 pound price is a good one though, as a number of other grocery chains in California, Nevada and Arizona are offering comparable brand fresh turkeys for $1.29-$1.49 pound.

Deep discounts: coupons, bonus points

Fresh & Easy, which has 135 of its 184 stores in California - there are 28 units in metro Phoenix, Arizona and 21 stores in metro Las Vegas, Nevada - is also doing heavy deep-discounting this month, distributing its 20%-off store coupons weekly online and in its paper-version weekly ad flyers.

So far this month Fresh & Easy has distributed three $10-off (purchases of $50 or more) online discount store coupons via its friends of fresh & easy e-mail program - the first on November 2, another coupon on November 9, and a third $10-off/$50 or more voucher on Wednesday. Today Fresh & Easy sent out another new "friends" e-mailer and included the Wednesday coupon in it.

The store coupons are also being distributed in Fresh & Easy's direct-mail flyers, and in some cases in full-page newspaper advertisements the grocer has run this week in selected markets. We've also seen store workers handing out the coupons to customers in some of the Fresh & Easy grocery markets we've visited this week.

The friends of fresh & easy program is now part of the grocery chain's loyalty card program of the same name. However, customers need not have a loyalty card to use the store coupons.

In fact, the online coupons are available all over the web because various coupon and mom bloggers post them on their sites.

Do an Internet search for "Fresh & Easy coupons" or a similar version, for example, and you'll  see what we mean.

Fresh & Easy Neighborhood Market launched the loyalty card in October. The card gives customers bonus points which they can convert to discounts on their grocery purchases.

For example, shoppers who sign up this month get not only the 250 points that are an incentive for joining, but also an additional 250 bonus points that Fresh & Easy is adding as a bonus. The 500 points are good for $5 off any purchase over that amount.

Additionally, Fresh & Easy is giving members of its "Friends" loyalty card two-times the bonus points this month on numerous items they purchase. For example, last week, when the grocer was offering the frozen Jennie-O brand turkeys for 59-cents a pound (it slashed the price on the birds by 20-cents pound on Wednesday), it gave card-holders 500 bonus-points, which is the equivalent of a $5 coupon.

Holiday sales period key

The Thanksgiving holiday period is a crucial one for Tesco and its Fresh & Easy chain, which is in-part why the heavy discounting is taking place. Not only is Thanksgiving the number one holiday for consumers food and grocery spending - and the most competitive among grocers - in the U.S. (Christmas is second), Tesco's fiscal-year 2011/12 third quarter is over at the end of this month. The quarter began August 28.

The six months from August 28, 2011 to the end of February 2012, when its 2011/12 fiscal-year ends, is an important period for United Kingdom-based Tesco because in March 2012 the one-year clock starts - to 2012/13 fiscal-year-end (February 2013) - which is when CEO Philip Clarke says the global retailer will break-even with Fresh & Easy Neighborhood Market.

Tesco recently reported a fiscal 2011/12 half-year loss for Fresh & Easy Neighborhood Market of $112 million, on sales of $470 million. The loss an about 21% improvement over the loss of the previous fiscal half-year period.

Fresh & Easy needs to continue the trend in order to have a chance of achieving the goal set by Tesco's CEO. Tesco will report the fiscal 2012/13 results in April 2013.

Meanwhile, Fresh & Easy Neighborhood Market has put together a comprehensive, interesting and solid holiday season promotional guide, particularly when it comes to the numerous own-brand fresh-prepared foods and baked goods/desserts offered.

Right now its all about selling.

But the break-even deadline, which is less than 16 months away, is also very much top-of-mind at Tesco's global headquarters in the United Kingdom and at Fresh & Easy's headquarters office in El Segundo, California - and in the Fresh & Easy stores, with its employees.

To see all of the food and beverage items featured in Fresh & Easy's Holiday Guide, click here. A zip code is required to view the guide. If you don't live where there's a Fresh & Easy store, just type in the following zip code: 90266.