Tuesday, February 28, 2012

First Two My Fit Foods' Stores Open in California; Santa Monica Unit Coming Soon

My Fit Foods, Hermosa Beach, California. [Photo credit: Fresh & Easy Buzz, February 28, 2012.] Storefront photo here.

Texas-based fresh-prepared foods retailer My Fit Foods has opened its first two stores in California, at 1005 Pacific Coast Highway in Hermosa Beach and 2543-G Pacific Coast Highway in Torrance.

The Hermosa Beach store (pictured at top) opened Monday, February 27. The unit in Torrance, located right next to a Trader Joe's grocery market (three photos below), opened today.

Grand opening events for both stores were held today.

The top photo of the three above is the storefront of the Torrance My Fit Foods' store. The next two photos show its close proximity to the Trader Joe's market. My Fit Foods' side/second entrance in the photo above is immediatly next to the Trader Joe's store. [Photo credit: Fresh & Easy Buzz, February 19, 2012.]

My Fit Foods originally planned to open both Southern California stores Friday, February 24 but delayed the openings until this week.

[Photo credit, Fresh & Easy Buzz, February 28, 2012.]

As we've previously reported, My Fit Foods plans to open additional stores in California this year and beyond.

The next store set to open is at Wilshire and Barrington (11701 Wilshire Boulevard #7) in Santa Monica, as noted in the brochure pictured above, which was available today at the Hermosa Beach store. That store is slated to open in a couple months.

Above: Inside the My Fit Foods store in Torrance, before it opened today. The fresh-prepared foods are stocked in the refrigerated display cases above by day-part - breakfast, lunch, dinner. See the vertical listenings on the case doors. Below: The focus is on takeout, but the Torrance My Fit Foods store also includes eating in at tables and the counter pictured. [Photo credit: Fresh & Easy Buzz, February 19, 2012.]

[Photo credit: Fresh & Easy Buzz, February 19, 2012.]

The stores offer fresh, pre-packaged refrigerated meals, side-dishes, snacks and deserts in buildings ranging from about 1,100-to-1,800 square-feet.

In Southern California, the fresh-prepared food iterms, like the pre-packaged Tenderloin Roasted Vegetable Dinner below, are made in a kitchen inside the My Fit Foods store in Hermosa Beach, which is larger than the unit in Torrance.

The stick figure graphic on the package is an icon of  founder Mario Mendias. It indicates a meal is a customer favorite. [Photo credit: Fresh & Easy Buzz, February 28, 2012.]

The fresh-prepared foods are transported from the Hermosa Beach unit to the Torrance store in the van pictured below. The Torrance store doesn't have a kitchen.

[Photo credit: Fresh & Easy Buzz, February 19, 2012.]

Related Stories

February 19, 2012: California Launch: My Fit Foods Opening Hermosa Beach, Torrance Healthy Fresh-Prepared Food Stores February 24

February 17, 2011: Texas-Based Healthy Fresh Foods' Retailer My Fit Foods Opening First California Store in Hermosa Beach

January 10, 2012: Welcome to the (Eclectic) Neighborhood: Second of Seven Fresh & Easy Express Stores Opens Tomorrow in Hermosa Beach, California

December 20, 2012: Hermosa Beach, California Fresh & Easy Express Taking Shape For January 11, 2012 Opening

December 13, 2011: Welcome to the (Eclectic) Neighborhood: Hermosa Beach, California Fresh & Easy Express Set to Open Jan. 11, 2012

Sunday, February 19, 2012

California Launch: My Fit Foods Opening Hermosa Beach, Torrance Healthy Fresh-Prepared Food Stores February 24

My Fit Foods this week erected the tall sign above at its soon-to-open Hermosa Beach store to attract attention from drivers on the busy Pacific Coast Highway. [Photo credit: Fresh & Easy Buzz, 02/19/2012.] 

Houston, Texas-based healthy fresh-prepared foods' retailer My Fit Foods plans to open its first two stores in California in the Southern California cities of Hermosa Beach (1005 Pacific Coast Highway) and Torrance (2543-G Pacific Coast Highway) Friday, February 24, according to a fresh posting on its new website, which the retailer went live with Friday, as we noted in this story - February 17, 2012: Texas-Based Healthy Fresh Foods' Retailer My Fit Foods Opening First California Store in Hermosa Beach.

The Hermosa Beach and Torrance My Fit Foods' stores are the first two of what the fresh-prepared foods' retailer says will be numerous retail outlets in the Golden State.

 A view of the Hermosa Beach My Fit Foods store from the busy Pacific Coast Highway. [Photo credit: Fresh & Easy Buzz, 02/19/2012.] 

The Hermosa Beach store (pictured at top, above and below) is about a quarter-mile away from the Fresh & Easy Express market on the Pacific Coast Highway, which was opened by Tesco's Fresh & Easy Neighborhood Market on January 11, 2012.

Coming soon: My Fit Foods, 1005 Pacific Coast Highway, Hermosa Beach, California. [Photo credit: Fresh & Easy Buzz, 02/12/2012.]
[Photo credit: Fresh & Easy Buzz, 02/19/2012.]
The My Fit Foods' store at 2543-G Pacific Coast Highway in Torrance is located immediatly next door (building right of the awning in the photo above) to a Trader Joe's grocery market in a busy shopping center that also includes a Whole Foods Market store, a Weight Watchers shop and numerous restaurants, like the Casa Organic Cafe, which is one space down (photo below) from the My Fit Foods store. The van in front of the store is part of the fleet My Fit Foods' uses to transport the refrigerated, fresh-prepared foods to its stores from its central kitchen.
[Photo credit: Fresh & Easy Buzz, 02/19/2012.]
Locating the store right next to the Trader Joe's should be a big bonus for My Fit Foods for two reasons: The store will benefit from the foot traffic generated by the market; and, since Trader Joe's doesn't offer much in the way of refrigerated ready meals (its main focus is on frozen), that fact and its proximity to the TJ's could help it sell more of its fresh-prepared meals.

As we reported yesterday, My Fit Foods is also expanding from its Texas home base into Arizona, Nevada, Utah, Idaho and Oklahoma, in addition to California.

My Fit Foods, which currently has about 44 stores, offers a variety of healthy fresh-prepared meals, side dishes, breakfast foods and snacks for takeout.

The foods are prepared in the company's corporate kitchens - and in some cases in-store - then packaged for sale in the stores.

The fresh-made foods, 95% of which the company says are gluten-free, are prepared using lean protein, are low in carbohydrates, and contain heart healthy fats. There are currently about 60 items on the menu, with more being added regularly.

The primary focus of the fresh-prepared food shops is takeout. However, the My Fit Foods' store's also have an area where customers can eat-in at a counter and a few tables with chairs. The store's have microwave ovens to heat the prepared meals.

In addition to the fresh-prepared foods, The retailer offers a line of vitamins and nutritional supplements under the My Fit Foods' brand, which is sells in the stores. The vitamins and supplements are part of the overall healthy foods/healthy eating/healthy lifestyle niche the company is focused on.

Besides the standard storefront retailing of the fresh-prepared foods, My Fit Foods also offers shoppers various customized healthy meal plans which they can sign up for, letting the company do the meal planning and food preparation for them. Among those plans is what My Fit Foods' calls its "21-Day Challenge," a three-week, five-meal-a-day program it says will start consumers on the road to healthier eating and better nutrition.

[Editor's Note: Stay tuned for an upcoming post featuring a pictorial look at and inside the My Fit Foods' store in Torrance, California.]

Related Stories

February 17, 2011: Texas-Based Healthy Fresh Foods' Retailer My Fit Foods Opening First California Store in Hermosa Beach

January 10, 2012: Welcome to the (Eclectic) Neighborhood: Second of Seven Fresh & Easy Express Stores Opens Tomorrow in Hermosa Beach, California

December 20, 2012: Hermosa Beach, California Fresh & Easy Express Taking Shape For January 11, 2012 Opening

December 13, 2011: Welcome to the (Eclectic) Neighborhood: Hermosa Beach, California Fresh & Easy Express Set to Open Jan. 11, 2012

Also see this link, , for additional related stories.

Friday, February 17, 2012

Texas-Based Healthy Fresh Foods' Retailer My Fit Foods Opening First California Store in Hermosa Beach

My Fit Foods' first store in California is set to go into the building above in Hermosa Beach, which is in the process of being renovated. [Photo credit: Fresh & Easy Buzz. Photo taken February 12, 2012.]

Houston, Texas-based healthy fresh-prepared foods' retailer My Fit Foods plans to open its first store in California at 1005 Pacific Coast Highway in the coastal Southern California city of Hermosa Beach and a second unit at 2543-G Pacific Coast Highway in Torrance, with more stores to come, Fresh & Easy Buzz has learned.

The Hermosa Beach store (pictured at top), which is currently being renovated, is about a quarter-mile away from the Fresh & Easy Express market on the Pacific Coast Highway, which was opened by Tesco's Fresh & Easy Neighborhood Market on January 11, 2012.

Tesco's Fresh & Easy Neighborhood Market puts a major merchandising emphasis on ready-to-eat and ready-to-heat fresh-prepared foods in both its standard format (10,000 square-foot) grocery markets and in its smaller (3,000 square-foot) Fresh & Easy Express stores, five of which have been opened to date, all in Southern California.
A view from the Pacific Coast Highway of the My Fit Foods store.
The soon-to-open My Fit Foods store at 1005 Pacific Coast Highway in Hermosa Beach is going into what was until August 2011 a restaurant called Rocky Cola Cafe, which closed then. Prior to that the building housed a Denny's restaurant. The building is about 2,000 square-feet in size, based on our observation.

A Fresh & Easy Buzz correspondent has been monitoring the progress of the planned My Fit Foods store at 1025 Pacific Coast Highway since early January 2012. Three weeks ago the sign depicted in the photograph at top wasn't on the building's facade, for example.

No date has yet been set for the store's opening, according to our sources. But a sign on the building says it's "opening soon." The building's renovation has been steadily progressing over the last few weeks and looks to be nearly completed.

My Fit Foods hasn't publicly announced the planned location or the store's opening date.

My Fit Foods, which describes itself as a healthy, fresh, pre-packaged takeout meal company and retailer, is currently hiring "front of the house" employees (store clerks) for both its first store in Hermosa Beach and the second unit in Torrance. Starting pay is $10 hour. The retailer also hires what it calls nutritional consultants for each store.

Texas-based My Fit Foods offers a variety of healthy fresh-prepared meals, side dishes, breakfast foods and snacks for takeout.

The foods are prepared in the company's corporate kitchens - and in some cases in-store - then packaged for sale in the stores.

The fresh-made foods, 95% of which the company says are gluten-free, are prepared using lean protein, are low in carbohydrates, and contain heart healthy fats. There are currently about 60 items on the menu, with more being added regularly.

In addition to the fresh-prepared foods, The retailer offers a line of vitamins and nutritional supplements under the My Fit Foods' brand, which is sells in the stores. The vitamins and supplements are part of the overall healthy foods/healthy eating/healthy lifestyle niche the company is focused on.

Besides the standard storefront retailing of the fresh-prepared foods, My Fit Foods also offers shoppers various customized healthy meal plans which they can sign up for, letting the company do the meal planning and food preparation for them. Among those plans is what My Fit Foods' calls its "21-Day Challenge," a three-week, five-meal-a-day program it says will start consumers on the road to healthier eating and better nutrition.

Shoppers can also order the fresh-prepared meals and other foods online, for pickup at the stores.

My Fit Foods recently launched what it calls a corporate wellness division, through which it's offering to provide healthy eating and nutritional benefits to companies, using its fresh-prepared food products as the centerpiece of the program.

The fresh-prepared foods retailer - it currently has about 34-stores in four cities in Texas and recently opened its first store in Arizona (in Scottsdale) and has plans to launch into Nevada, Utah, Idaho and Oklahoma in addition to California - operates on a mixed corporate-owned/franchise model. The majority of the stores are owned by independent operators. The company provides the culinary/product development and the prepared foods, along with merchandising, marketing and other services under the joint-venture arrangement.

In addition to the franchised standalone stores, My Fit Foods is also pursuing the supermarket channel as a source of distribution for its fresh-prepared foods - but not in the traditional on-the-shelf manner.

Instead, the fresh-prepared foods' retailer has a deal with Texas-based supermarket chain H-E-B to put "My Fit Foods" healthy meal kiosks in selected stores. At present H-E-B is testing the kiosks in about eight supermarkets in Texas.

The supermarket kiosk concept is something My Fit Foods is interested in expanding into California, Nevada, Arizona and elsewhere where it plans to launch, signing up a chain in each region to test with like it's doing with H-E-B in Texas.

The fresh-prepared foods retailer's focus at present in the Golden State is Southern California. But its also interesting in opening stores in Northern California.

In Nevada the initial market region focus is metro Las Vegas. In Arizona it's the Phoenix metropolitan region.

Tesco's Fresh & Easy has its 182 stores in California (138 units), Arizona (24 units) and Nevada (20 units).

Houston-based My Fit Foods was founded in 2006 by certified nutritionist-entrepreneur Mario Mendias, who also spent 19-years' working as a personal trainer before starting the company.

In 2007 Mendias partnered with restaurant industry veteran Anthony Milton, and the two partners and majority-owners launched My Fit Foods as a fresh-prepared foods' retail chain, focused on healthy eating and nutrition.

In describing the start of My Fit Foods Mendias says: "No matter how much I preached to the clients I trained every week that 80% of your results, in regards to your health and fitness goals, are derived from what you are eating, what I found wasn't that they were not listening to me. It was simply that most people just didn’t have the time, knowledge or support to stay consistent with a clean and healthy diet. So, it was simple to me, I decided to do all the healthy cooking for them, and My Fit Foods was born out of my tiny apartment kitchen on Memorial drive in Houston, Texas."

Founder Mendias says his plans are to grow the fresh-prepared foods chain throughout the western U.S., after having what he says is a good reception in Texas.

My Fit Foods is fairly aggressive from a promotional standpoint in Texas. For example, the fresh-prepared foods retailer uses its Facebook page regularly, promoting the stores, its fresh-prepared foods, and holding contests and other promotional activities aimed at customers and potential new customers alike.

Additionally, My Fit Foods, which has as its motto, "Eat Fit. Live Fit,  just went live today with a redesigned website.

There's no shortage of retailers of various formats offering prepared foods for takeout in Southern California, including those offering healthy options - grocers, mass-merchandisers, club stores, convenience stores, food kiosks, restaurants, food trucks and others.

The franchise model My Fit Foods works on though could help it in competing in the food mecca that is Southern California because under such a system the independent owner-operators share in the financial investment, bearing most of the upfront costs, while the company earns an income stream from providing the concept, culinary development, food, merchandising and marketing to the franchise owners.

But the independent owner-operators' success (or failure) is My Fit Foods' success (or failure) as well, so its a symbiotic relationship, both operationally and financially.

My Fit Foods' ready-to-eat and ready-to-heat takeout foods appear to be popular in the four cities in Texas where it has its stores - Houston, Dallas, Austin and San Antonio - based on conversations we've had with customers of some of those stores.

Much of the success of the stores also depends on how strong of a relationship the owner-operators build with customers and potential customers, something independents can be good at when they have their own money on the line. Key to that is also the quality of support they get from the corporate folks.

My Fit Foods wants to open numerous stores throughout Southern California, as well as move into Northern California, using the model it's been following in Texas since 2007, which is to focus on cities and neighborhoods that best fit the healthy, upscale takeout foods' customer demographic and lifestyle.

The company is also in a major growth phase, which is why its expanding into California, Nevada, Arizona, Utah and Oklahoma, according to founder Mendias.

Related Stories

January 10, 2012: Welcome to the (Eclectic) Neighborhood: Second of Seven Fresh & Easy Express Stores Opens Tomorrow in Hermosa Beach, California

December 20, 2012: Hermosa Beach, California Fresh & Easy Express Taking Shape For January 11, 2012 Opening

December 13, 2011: Welcome to the (Eclectic) Neighborhood: Hermosa Beach, California Fresh & Easy Express Set to Open Jan. 11, 2012

Also see this link, , for additional related stories.

Thursday, February 16, 2012

Brand Extension: Fresh & Easy Neighborhood Market Introduces 'eatwell' Fresh Meat Lines

Private Brand Showcase

Tesco's Fresh & Easy Neighborhood Market has extended its eatwell healthy foods' private brand into the fresh meat category, with the launch of a new line of Chicken Sausages and two value-added meat lines - eatwell Chicken Bake and eatwell Chicken Stir Fry (pictured above and below) - into its 182  fresh food and grocery stores in California, Nevada and Arizona.

The eatwell Chicken Sausages line, which hit some Fresh & Easy stores last week and others this week, based on our regular store visits and conversations with store workers, includes varieties like the Mild Italian and Apple Cinnamon varieties pictured below.

The Chicken Bake items, which include a tray for cooking in the oven, and the eatwell Stir-Fry SKUs come in varieties like the Roasted Red Pepper, Chipotle and Mango and Cajun-Style, pictured at top.

Fresh & Easy Neighborhood Market is currently featuring the eatwell sausages at a 2-for-$7 (16oz pkg.) introductory price. The Chicken Bake and Stir-Fry items, both of which as also 16oz, are being offered at a 2-for-$10 introductory price in the stores.

The extension of the eatwell private brand - Fresh & Easy uses F&E as a co-brand on the items - into the meat and value-added meat categories is part of a major expansion of the brand, which the El Segundo, California based grocery chain began in December 2011.

In January of this year Tesco's Fresh & Easy began launching numerous new eatwell items in the brand's existing categories - fresh-prepared foods/refrigerated, dry grocery and frozen foods. That launch, which includes about 60 new items, continues this month.

In the summer of 2010 Fresh & Easy Neighborhood Market extended its eatwell private brand into the dry grocery category, as we reported in this story -  August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category. Prior to that the brand was only used for fresh-prepared foods.

Up until late last year the grocery chain offered just a few eatwell items in the dry grocery category, such as canned chili and snack crackers.

But beginning in December 2011 and continuing through the present, Fresh & Easy has been launching numerous eatwell dry grocery items, such as: boxed breakfast cereals, instant oatmeal, whole grain and vegetable pasta SKUs, pasta and grill sauces, boxed meal kits (like Macaroni & Cheeseburger; just add meat and prepare), chocolate chip fiber snack bars and some others.

Fresh & Easy also introduced refrigerated tortillas under the eatwell brand in January, a line of frozen dairy desserts, bagged Italian salad kits (produce), a line of refrigerated heat-and-eat soups similar to those if offers under its Fresh & Easy brand, and numerous new fresh-prepared meal items.

The grocery chain also promoted its eatwell healthy foods' brand in January (see the instant oatmeal and cereal endcap display below, for example), offering numerous items at sale prices in its weekly advertising circulars and via its "Friends of Fresh & Easy" e-mail flyer, which it now combines with its "Friends" loyalty/rewards card.

For example, for about three weeks last month Fresh & Easy promoted its eatwell frozen meals, which as we reported here the grocer introduced in September 2010, a month after it extended the healthy foods' private brand into the dry grocery category in August 2010, in its stores, as well as featuring them in the two promotional media vehicles noted above.

As you can see in the photos below, which were taken at a store in Northern California on January 7, 2012 by Fresh & Easy Buzz's senior correspondent, Tesco's Fresh & Easy gave its eatwell brand frozen meals multiple facings and plenty of freezer case space during the January 2012 promotion.

Fresh & Easy Neighborhood Market introduced its eatwell healthy foods' brand in April, 2010, a story we broke here - April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line; and followed up on with this piece the next day - April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7.

Tesco's Fresh & Easy announced the launch of the eatwell brand not long after the publication of our April 1, 2010 story.

By extending its eatwell brand into the meat and value-added meat, the healthy foods private brand is now represented across all consumable food categories at Tesco's Fresh & Easy - dry grocery, frozen foods, perishables- refrigerated, produce, fresh-prepared foods and meat, which is something we reported over a year ago that Fresh & Easy Neighborhood Market would do.

Take a look at this piece we published in February 2011: Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

Also see these additional stories about Fresh & Easy's eatwell brand:

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011

 January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week

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

September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category

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

May 18, 2009: Strategy Session: Tesco's Fresh & Easy Needs to Move From its One Store Brand Fits All Strategy to A 'Three Brand' Store Brand Strategy

April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line

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

[Editor's Note: All photographs credit Fresh & Easy Buzz. The eatwell Sausages, Chicken Bake and Stir-Fry photos were taken February 12, 2012. The eatwell grocery endcap display photogrpahs was taken January 9, 2012, The eatwell frozen meal photos were taken January 7, 2012.]

Tuesday, February 14, 2012

What We Can Learn From Stephanie Teteak's Best Grocery Bagger Victory At the NGA Show

Stephanie Teteak and Blake Westling wait for the judges' decision at yesterday's NGA 'Best Bagger' competition in Las Vegas. [Photo Credit: Leila Navidi. Courtesy Las Vegas Sun.]

The Insider - Heard On the Street

Until the mid-to-late 1970's it was a rare supermarket chain or independent grocer in America that hired women of any age to bag groceries. I know this for a fact because I was one of the boys who made his spending money as a teenager, and later most of his tuition and living expenses as a college student, bagging groceries and stocking shelves in a supermarket.

But beginning in the mid-to-late 1970's, and accelerating in the 1980's to today, this gender bias changed dramatically. Young, and not so young, women began filling the grocery bagger ranks in America's supermarkets, working side-by-side at the checkout stands with the boys.

And a funny thing happened when that big change came - most of the girls (sorry guys) were far better at bagging groceries then us boys were - more careful in how they packed Mrs. Roger's eggs, better at segregating the frozen foods and perishables together so they would stay colder for Mrs. Roger's trip home, much better when it came to chatting with the customer while bagging (women are superior to us men when it comes to multi-tasking), and so on. To sum it up, they were, generally speaking, more courteous courtesy clerks than the guys were. Sorry again, guys.

Another funny thing happened when the big change came, those of us boys who worked in the stores bagging groceries and stocking shelves were pleased as punch to have young, and not so young, women working side-by-side with us, as is the case today in America's food and grocery retailing industry.

I thought about this history and experience yesterday - despite the fact my memory isn't as good as it was when I was bagging groceries four decades ago - when I heard the news the judges at the National Grocer's Association (NGA) convention and show in Las Vegas, Nevada honored Stephanie Teteak, 30, with the first place award at its annual "Best Bagger" championship contest, which was held during the show on Monday.

Stephanie Teteak, who works for the Larry's Piggy Wiggly supermarket in Kaukauna, Wisconsin, was one of two finalists in the annual "Best Bagger" competition, which was held yesterday during the show, which began Sunday and ends Wednesday.

The other finalist was Blake Westling, a 20-year-old college student and grocery bagger who works for a Byerly's supermarket in Eagan, Minnesota.

There were 24 competitors (see the photo below) in the competition, representing 24 U.S. states. Each of the competitors had to win state competitions in order to make it to the national finals in Las Vegas.

The contestants were judged on a number of criteria, including: speed, accuracy, distribution of product weight in the bags, bag building techniques, appearance (theirs' personally as well as that of the full bag) and attitude. The NGA also had the contestants use reusable canvas bags, providing a green reminder to all who watched the contest.

The items used to fill the bags were just like those grocery products bagged on the job - boxed breakfast cereal, a container of Folgers Coffee, a package of cookies, a can of Campbell's soup, a carton of eggs, and the like.

There were five preliminary rounds in the competition yesterday. Stephanie Teteak and Blake Westling were the last two standing when all was said and done.

Waiting for the judges decision, the two "Best Bagger" contestants stood on the stage holding hands (see the photo at top). When the judges announced that Teteak had won, Blake Westling congratulated her. There was no gender bias in his eyes or in his behavior.

For her winning effort Teteak, who in addition to being a grocery bagger is a bookkeeper and has been in the grocery business for 13-years, takes home a check for $10,000, along with the "Golden Grocery Bag" trophy given to the first place winner each year. Her store - Larry's Piggy Wiggly, in Kaukauna, Wisconsin - was awarded a golden colored checkout stand with Ms. Teteak's name on it.

Stephanie Teteak accepts her 'Best Bagger' check at the NGA Show.
Blake Westling takes home $5,000 for his second place efforts, which he says he's going to use in part to help pay his college tuition, putting the rest into a Roth IRA. Not only is he a true champion, he's a wise and prudent young man.

A total of $24,000 was awarded in the competition, which was sponsored by the Kellogg Company, Bunzl Distributors Inc. and Pan-Oston. Rob Mow of Martin’s Super Markets in South Bend, Indiana came in third place, winning $1,000.  Florida-based, employee-owned Publix Supermarkets picked up fourth and fifth place, with Alexis Jeup of Mt. Juliet, Tennessee and Bryan Nowell of Tuscaloosa, Alabama, winning $1,000 each.

Teteak, who competed in the competition last year but didn't place, says she "worked really hard" to achieve her win, practicing regularly and competing in the Wisconsin state bag-off competitions 10 times previously.

America's top bagger said yesterday she plans to use her winnings to "pay off some bills." That's smart, wise and financially prudent, a trait she shares with Blake Westling, when it comes to how they plan to use their winnings.

Stephanie Teteak (far left) with two of her fans at yesterday's bag-off.
Stephanie Teteak also says this about her day job: "Bagging is the most important job in the store. No bag of mine goes out there, that isn’t perfect."

Object lessons come in many forms and from various places in life, including from "Best Bagger" competitions like the one held at the NGA show yesterday.

I think there's two such lessons we can learn from Stephanie Teteak's winning of the "Best Bagger" competition yesterday.

The first lesson is that although change can be difficult - such as the supermarket industry's opening the doors to women as grocery baggers and checkers, and later as shelf stockers, store managers, mid-level managers and executives - if its the right thing to do (like it was), most of us recognize it, and then wonder why it took so long to come about.

Most of us also embrace such change (some earlier than others), because that's also the right thing to do. Case in point: Few if any people would argue against the fact that opening the doors to women has made America's food and grocery retailing industry far superior in every way to what it was back when it was primarily a boys club.

The industry has been a bit slower in opening up its senior executive ranks to women, however. But that too is changing.

For example, Walmart has just named a woman, Rosalind Brewer, as chief executive of Sam's Club, and last week Safeway Stores, Inc. named Lori Raya president of its top-grossing Vons' division, which has 300-plus stores in Southern California, Southern Nevada and California's Central Valley.

Both Brewer and Raya came up through the ranks at Walmart and Safeway respectively. And there are numerous female grocery baggers (and stockers and checkers) out there working in America's grocery stores who welcome the opportunity to advance up through the ranks, if they so desire to do so.

Additionally, an increasing number of women are becoming store managers.

And at the headquarters level women are gaining leadership positions in category management, merchandising, marketing and finance, whereas in the past most grocery chains slotted women senior executives in areas like human resources, public relations and nutrition-consumer affairs. For example, one of the fastest-growing areas in the U.S. food and grocery industry is private or store brand product development and marketing. Many of the most talented executives currently heading up those programs at chains are women.

The second object lesson I suggest we can take from Ms. Teteak's victory comes from her quote about bagging being the most important job in the store.

That lesson is, that we should all remember what she says because it, like all the other store-level positions, are where the action is. If it doesn't happen at retail, it isn't going to happen at all.

Events like the NGA's "Best Bagger" competition serve an important role in drawing attention - both within the industry and to the general public - to the employees who work in the stores.

NGA president and CEO Peter Larkin, who previously was president of the California Grocers Association, said it well in a statement today, noting: "This competition continues to shine a light on the incredible dedication and work ethic of grocery employees, particularly baggers, from all across the country. These competitors are a small sample of the thousands of baggers all across this country who help customers every day with exceptional customer service and demonstrate an enormous amount of pride in what they do."

And it is well deserved attention, as Stephanie Teteak shows us, not because she won first place in the NGA's "Best Bagger" competition, but because she competed - and was able to compete because of those changes that started in the industry back in the 1970's, and continue today.

But regardless of gender or performance, I doubt Teteak would have become America's top grocery bagger yesterday, or entered the competition in the first place, were it not for the attitude she has about her job, which she expressed after receiving her award yesterday, saying: "Bagging is the most important job in the store. No bag of mine goes out there, that isn’t perfect."

That's an attitude all of us need to make sure we have, regardless of what our job is. Thanks for the lessons Stephanie.

(Bottom three photographs courtesy National Grocers Association.)

- The Insider

[Read past columns by our 'The Insider' columnist here.]

Monday, February 13, 2012

Sunflower Farmers Market, Sprouts and Private Equity: The Art of a Soon to Be Announced Deal

The Insider - Heard On the Street

In December 2007 Boulder, Colorado-based Sunflower Farmers Market announced it had raised $30 million in equity financing from La Jolla, California-based private equity firm PCG Capital Partners.

At the time, Sunflower Farmers Market, which was headed up by co-founder and CEO Michael Gilliland, who resigned in February 2011 after being charged by the Maricopa County, Arizona Grand Jury with one count of  felony child prostitution, operated just 13 stores in Colorado, Arizona, New Mexico, and Nevada, and had sales in the $100-$150 million range.

Today, Sunflower Farmers Market, which I've reported has agreed to a merger-acquisition deal with Phoenix, Arizona-based Sprouts Farmers Market, which is majority-owned by private equity firm Apollo Global Management, has 35 stores and about three times the annual revenues it had in December 2007, when PCG Capital Partners made its $30 million equity investment in the grocery chain.

According to my sources, in return for the $30 million equity investment it made in Sunflower Farmers Market over four years ago, PCG Capital Partners, who's managing director Timothy Kelleher is a member of the grocery chain's board of directors, received an approximately one-third ownership stake in Sunflower, the other about two-thirds being held by the founders, corporate officers and other private investors.

In 2007 PCG Capital Partners launched its Corporate Partners Fund, the vehicle it used to invest in Sunflower Farmers Market.

The fund is designed to provide equity growth capital for established businesses, which Sunflower was.

It's also a non-control fund, meaning the private equity firm takes a substantial equity interest in the companies it invests in - and in the case of Sunflower Farmers Market received a board seat for Kelleher as part of the deal -but allows the company's senior management to continue to call the shots on a day-to-day basis.

Back in December 2007 when the private equity firm made its $30 million investment in then 13-store Sunflower Farmers Market, co-founder and then CEO Michael Gilliland and Kelleher said the strategic goal of both parties was to build Sunflower into a chain of 50 stores over a five-year period.

Here's what Sunflower's then CEO Gilliland and Kelleher said (italics below) in a joint-statement on December 17, 2007:

Sunflower Farmers Markets, a Boulder, Colorado-based grocery chain founded and led by Wild Oats founder Mike Gilliland, announced today it has raised $30 million in equity financing from PCG Capital Partners, a private equity firm based in La Jolla, CA.

The funding comes in advance of a major expansion of the Company’s retail locations in both existing and new geographic markets.  Plans include doubling the number of stores by the end of 2009.  Sunflower will launch new locations at a rate of up to eight stores per year, creating a company portfolio of 50 stores throughout the west within five years.    

Sunflower, founded in 2002, currently operates 13 stores in Colorado, Arizona, New Mexico, and Nevada.  The Company’s increasingly popular format offers consumers a full-service farmers’ market-style grocery store featuring the highest quality natural and organic products at the lowest possible prices.

Mike Gilliland, Sunflower’s Founder and CEO, said, "Our value driven approach to the natural foods retailing sector has clearly resonated with consumers.  There is tremendous demand for an alternative to the high price format that has predominated in natural foods for so many years. PCG Capital Partners’ investment will enable us to make this differentiated retailing approach available to millions of consumers throughout the Western United States, including new markets in Utah and Texas.”

Tim Kelleher, Managing Director of PCG Capital Partners, said, "We are excited to partner with a proven entrepreneur like Mike Gilliland.  We believe that Mike and his team have built a model that uniquely combines value with quality in the natural and organic foods segment.  The concept has proven itself over 13 stores in four states.  We anticipate our capital will enable Sunflower to capitalize on its success by replicating the model across many additional markets."

As noted earlier, Sunflower Farmers Market has 35 stores. Current plans - before the talks with Sprouts started in earnest last fall - call for Sunflower to open 6-8 new stores this year, which means it would fall short of that five year, 50-stores goal by nine to seven or so units, making it difficult to hit the financial target set by PCG Capital Partners, Gilliland and Sunflower's board in the fall of 2007, when the private equity firm made its $30 million investment. The chain is well on the way to that goal though.

Why: Because 41-43 stores - give or take a couple either way - rather than 50 units are to be open by December 2012 (five years from December 2007). That many less stores opened can make a big difference in terms of revenue and profits for a grocery chain on the growth fast-track, which is what the plan has been for Sunflower Farmers Market since 2007.

PCG Capital Partners has an up to seven-year time horizon, in terms of getting a return on equity, in its $30 million investment in Sunflower Farmers Market. As of today, its about four years and four months into that up to seven-year time horizon. Five years is often a magic number when it comes to private equity investments in a company.

The deal with Sprouts, which will be announced soon, will change all that, however. I don't know all the specifics at present, but the private equity firm will either get paid-out fully in the deal with Sprouts or will take some equity in a combined Sprouts Farmers Market-Sunflower Farmers Market, to be controlled by Sprouts, making it whole either way.

Sunflower Farmers Market's equity partners have been angry at Gilliland since his arrest in February 2011, when he was charged with one count of felony child prostitution.

The grocery chain's board moved quickly to get the co-founder to resign, which he did, along with taking various measures, such as removing any references to Gilliland from the company's website and other media, as well as putting out a statement following his resignation saying he would no longer be involved in the company and that he is only a minor investor in the chain.

But the reality is that Gilliland was the driving force behind and public face of Sunflower Farmers Market since it was founded in 2002. Just look at the December 17, 2007 statement I quoted above if you either aren't aware of that fact or doubt it. It was a personality-driven retailer until February 2011 - and Michael Gilliland was that person and personality.

Overall, I think Sunflower has been much better off over the last year as a non-personality-driven grocery chain, just as I would suggest Whole Foods Market has become a much better operation since the company convinced John Mackey to be a bit more zen-like and a lot less the face of Whole Foods'-like.

There has been talk in the past of a possible acquisition of Sunflower by Sprouts or a merger of the two food retailing companies. But Gilliland's being charged with one count of felony child prostitution a year ago this month  - he has yet to go to trial, having asked for and received multiple postponements (current trial date is March 15, 2012) from the Maricopa County, Arizona Superior Court where the case is pending; his lawyer has also appealed the Grand Jury's decision to the Arizona State Court of Appeals (see here) - served as the catalyst for the talks and negotiations between the boards of Sprouts and Sunflower.

All that's left now is the announcement of the deal. And it's a deal that has as much to do with private equity firms - Apollo Global Management being the majority owner of Sprouts Farmers Market and PCG Capital Partners holding considerable equity in Sunflower - as it does about a merging of two grocery chains with similar farmers market-style formats.

- The Insider

[Read 'The Insider's' past columns here, including his scoop on the yet to be announced Sprouts-Sunflower deal and news-breaking reporting and analysis on the Sprouts Farmers Market-Henry Farmers Market acquisition-merger in January 2011.]

Related Stories

February 7, 2012: Deal Announcement From Grocers Sprouts and Sunflower Farmers Market on Tap

January 25, 201: Sprouts Farmers Market and Sunflower Farmers Market Ink Acquisition-Merger Deal

November 6, 2011: Roll Up Times Two? Sprouts Farmers Market In Talks With Sunflower Farmers Market About Possible Acquisition

January 5, 2011: Will 2011 See Sprouts Farmers Market Acquiring Henry's Farmers Market? 'The Insider' Says it Could Be in The Cards

January 7, 2011: Sprouts Farmers Market-Henry's Farmers Market Deal Negotiations Continue; End-Game Could Be Near

January 8, 2011: Smart & Final-Henry's Tell Employees About Deal Discussions With Sprouts Farmers Market; Confirming 'The Insider's' Reports

February 16, 2011: Breaking: Smart & Final Enters Into Agreement to Sell Henry's to Sprouts Farmers Market

Also see: ,  ,  and .

Saturday, February 11, 2012

Whole Foods' Video Mini-Series Charts One Man's Search For Love in the Aisles Before He Turns 30 On Valentine's Day

I've spent a lifetime looking for you
Single bars and good time lovers, never true
Playing a fools game, hoping to win
Telling those sweet lies and losing again.

I was looking for love in all the wrong places
Looking for love in too many faces
Searching your eyes, looking for traces
Of what.. I'm dreaming of...
Hopin' to find a friend and a lover
God bless the day I discover
Another heart, lookin' for love

- "Lookin' For Love (in All the Wrong Places)," from the movie "Urban Cowboy." View and listen to the soundtrack here.

Whole Foods Market goes to great lengths throughout the year to get shoppers to love its stores.

But from February 8 until Valentine's Day (February 14) the grocery chain's Southern Pacific Region, which includes its stores in Southern California, Southern Nevada and Hawaii, is giving a little of that love back by launching a video mini-series called, "In the Market - An Organic Love Story," which tracks one man's search for romance in the aisles of a Whole Foods' store.

The video mini-series, which is designed to give food and grocery shoppers "that loving feeling" in the week leading up to Valentine's Day, features the romantic adventures of Whole Foods' shopper Ben (pictured at top) who, aided by his pals Alex and Ted, sets out to find his Valentine before he turns 30 on Valentine's Day.

The first episode in the seven-part video mini-series aired February 8 at http://www.wholefoodslovelocal.com/. A new video is being released on the dedicated website everyday, with the final episode airing February 14, Valentine's Day.

In the mini-series Ben pays far more attention to the women walking the aisles of the Whole Foods' store than he does to the grocer's gleaming displays of fresh fruits and vegetables, the tempting displays of fresh baked goods, and even the huge end-cap displays of snacks and craft beers, although all these features serve as important backdrops in his love search.

Ben particularly seems to have his eye on every girl he sees wearing yoga pants, many of whom he attempts to seduce grocery store-style, offering everything from free wine to gourmet meals at his place.

"For many of our shoppers Whole Foods Market isn’t just where they go to grab all the fixings for dinner - it’s where they go to find the ingredients for love," said Andi Dowda, regional marketing coordinator for Whole Foods Market's Southern Pacific Region, in explaining the logic and strategy behind the creation of the video mini-series for Valentine's Day. "And with romance on the mind this time of year, these films are a fun, light-hearted approach to spreading that love for our shoppers to enjoy."

Marketer Dowda also suggests looking  for love, and meeting a potential mate, at a Whole Foods' store has a compatibility angle to it, saying: "Anyone can find love in the most unlikely places. As our character Ben put it, 'if you meet someone in Whole Foods, at least you know you have one thing in common - you both shop at the same store.'"

The character played by John Travolta in the movie "Urban Cowboy" - the song 'Lookin' for Love (in All the Wrong Places)" at the top of this piece - would likely agree with Whole Foods' Dowda.

"In the Market  - An Organic Love Story" is part of a newly-launched series of mini-documentaries called "Love Local," which celebrates the relationships Whole Foods Market’s Southern Pacific region stores have forged with their local partners, team members and customers, Dowda says. (You can view other videos in the series, along with Ben's search for the love of his life before he turns 30, at the website here.)

Whole Foods' operates on a very decentralized structure. It's regional divisions localize product selection (beyond a required core merchandise mix), merchandising and marketing in a way similar to what an independent grocer based in a given community might do. The system works extremely well for natural grocery chain and is a major key to the grocer's success.

Whole Foods Market has 39 of its 317 stores in its Southern Pacific region. There are: 32 units in Southern California, four stores in Southern Nevada, and three units in Hawaii.

The "In the Market - An Organic Love Story" series was produced for Whole Foods' Southern Pacific region division by Omelet, a Los Angeles, California-based branding, advertising and entertainment company.

We've viewed the first four episodes of the series. The videos are well done, and the writing is of a high-quality.

The marketing message is clear: Whole Foods Market is much more that simply a store to buy food and groceries at - it's a shopping experience. In other words, it ties in with Whole Foods' existing image and the extensive marketing effort the grocer puts forth to reinforce and grow that message and the Whole Foods' brand.

Love, romance, Valentines Day and Whole Foods, all tied together as a video mini-series, is also symbolic of the approach Whole Foods Market takes to food retailing, which is best demonstrated from a merchandising perspective by Co-CEO Walter Robb, who has approached natural and organic food retailing in a passionate and one might even suggest somewhat romantic, yet realistic, way for the three-plus decades he's been in the grocery business.

Food retailing as a passion is also an attribute Whole Foods' co-founder and CO-CEO John Mackey, who held the CEO position for nearly 30-years until asking Robb to share it with him in 2010, has built into the Whole Foods Market culture.

In fact, that shared view of food retailing as a passion, with a little romance thrown in, played a big part in Mackey offering to share the CEO position with Robb, who he personally hired in the early 1990's to supervise the construction of, open and manage the Miller Avenue store in Mill Valley, California.

Food retailing as a passion is real at Whole Foods,' rather than being a marketing or public relations slogan. It's a part of the culture, just like the yoga pants are.

Meanwhile, on Tuesday (Valentine's Day), we'll learn if Whole Foods' shopper Ben finds his "Valentine" on his 30th birthday, or if he will remain single, continuing his aisle-by-aisle, produce department and in-store bakery-to-whole body department search for the yoga pants-wearing girl of his dreams. Stay tuned.

Suggested Reading

April 1, 2011: A Natural & Organic Kind of Thing: Finding Love at Whole Foods Market

June 21, 2011: The 'Art' in Food Retailing On the First Day of Summer at Whole Foods Market in New York City's Chelsea District

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

Thursday, February 9, 2012

Confirmed: First 2 Fresh & Easy Stores Open in Sacramento March 7; 3 in Metro-Area March 14

Tesco's Fresh & Easy Neighborhood Market today announced the opening dates for its first five stores in Northern California's Sacramento metropolitan region.

Fresh & Easy first announced its plans to enter the metro Sacramento market in early 2008, where it said it would open an initial 19 stores. (See here for details and a list of the numerous other planned stores we've uncovered in the region.)

It planned to start opening the first of those 19 stores beginning around late 2009 and no later than mid-2010. Those plans were postponed until now.

The grocer's announcement today confirms the opening dates for the first batch of stores in the Sacramento region we've had listed on our F&E Store Openings Q1 2012 link at the top of the blog.

Below are the locations and opening dates of the first five stores Fresh & Easy Neighborhood Market plans to open in the Sacramento metro-region:

Watt Avenue & El Camino Avenue
Opens March 7, 2012

Mack Road and Franklin Boulevard
Opens March 7, 2012

Lincoln and Sterling Road
Opens March 14, 2012

>Elk Grove
Elk Grove Florin Road and Calvine Road
Opens March 14, 2012

East Natoma Street and Blue Ravine Road
Opens March 14, 2012

Northern California - one year on

The opening of the first stores in metropolitan Sacramento, Tesco's newest market region with its Fresh & Easy chain, comes one year after the grocery chain began opening its first stores in Northern California.

There are 18 Fresh & Easy stores now open in Northern California - 15 units in the San Francisco Bay Area; one store in Fairfield, which is on the outskirts of the Bay Area off Interstate-80; one Fresh & Easy grocery market in Vacaville, which is about midway between the Bay Area and the Sacramento region; and a store in Modesto, which is in the Northern Central Valley.

There are 182 Fresh & Easy stores in California (138), Nevada (20 units), and Arizona (24 units). Of the 138 stores in California (the grocer opened two units in the Golden State yesterday), 106 units are in Southern California, seven stores are in the Bakersfield and Fresno regions in the mid and southern Central Valley, and 18 units are in Northern California.

Region's 'Big Three' (and unionized) grocery chains

Fresh & Easy's launch into the Sacramento-area market comes at a time when the region's three leading grocers - West Sacramento-based Raley's, Modesto-based Save Mart/Lucky and Pleasanton, California-based Safeway Stores, Inc. are in negotiations with the United Food and Commercial Workers (UFCW) union over a new three-year labor contract.

The three supermarket chains are numbers one (Safeway), two (Save Mart) and three (Raley's) respectively in terms of market share in Northern California. In the metro-Sacramento market, Raley's is number one, followed by Save Mart and Safeway.

The old contract expired in October 2011, and the union locals and the "Big Three" Northern California grocery chains have been extending the dates since then. The negotiations continue.

Raley's and Save Mart/Lucky are family-owned, privately-held companies. Safeway Stores, Inc. is publicly-held.

The three chains negotiate with the union locals. Once a deal is made, the smaller unionized grocers in the region then generally accept whatever contract deal is cut and voted on and ratified by UFCW members.

There are about 52,000 unionized grocery clerks in Northern California, according to a spokesperson for Local 5. There are numerous other chains and independents in Northern California that are unionized and operating under the extended contracts.

Last week Raley's, which operates 131 stores in Northern California under the Raley's (superstores), Bel-Air Markets, Nob Hill Foods (supermarkets) and Food Source (discount warehouse) banners, broke out of the joint-talks with Save Mart/Lucky and Safeway, and is now negotiating independently with the union locals.

Raley's, which has been struggling financially and going through a reorganization since 2010, is asking the union for various concessions in the health and welfare benefit and pension areas.

Raley's CEO Michael Teel, who's family owns the privately-held chain, says the grocer needed to go out on its own in the negotiations because it wants a deal, with concessions, fast. Teel also says Raley's would not have had to close two stores recently, one in Modesto and the other in the Sacramento region, had the UFCW accepted its proposal. He also said additional store closures are possible if Raley's can't get the concessions its asking the union for.

An official of one of the Northern California UFCW locals told us recently that the concessions Raley's wants as currently stated "won't fly with our membership." As a result, the union and the chain have yet to reach an agreement that the union can take to its members for a vote, he says.

The contract extensions with all three chains run out before the end of this month.

Non-union grocers on the move

Meanwhile, Tesco's Fresh & Easy is just one of many non-union food and grocery retailers opening stores at a fast pace in Northern California in general and in the Sacramento region specifically. Others include Whole Foods Market, Sprouts Farmers Market and Sunflower Farmers Market. All three have new stores set to open in metro Sacramento this year.

Over the last year Tesco has been repositioning Fresh & Easy to be more of a specialty grocery store. All three of the chains mentioned above, and Fresh Market mentioned below, plus Trader Joe's, which has stores in the Sacramento region, are direct competition in that niche.

Safeway and Raley's, which both put a major focus on fresh foods and specialty as well as on the basics, are also direct competition for Fresh & Easy, including in the fresh-prepared foods category. Both chains offer extensive ready-to-eat and ready-to-heat fresh foods, as do Whole Foods, Sprouts and Sunflower. Save Mart/Lucky does as well, but to a lessor degree than the others.

Costco, which has customer demographics that cut across all income levels, is also a major food and grocery retailing force in the Sacramento metro-market, as are a number of smaller chains and independents, such as Woodland-based (about 12 miles from Sacramento) Nugget Markets, which has a number of stores in the region.

Additionally, as we previously reported, Walmart Stores, Inc. is locking up numerous locations for its smaller-format (26,000-to-45,000 square-foot) Neighborhood Market supermarkets in the Sacramento region, along with proposing a few new supercenters, and adding fresh food and groceries (hybrid supercenters) to some existing discount format stores.

Discount chain Target, which is non-union like all the others mentioned above, has been and continues to add its "P-Fresh" fresh food and grocery markets inside many of its existing target discount format stores in the region.

Another non-union grocery chain, North Carolina-based The Fresh Market, also has plans to start opening stores in Northern California - the Bay Area and Sacramento region is its focus - this year, as we've previously reported in Fresh & Easy Buzz.

Bottom line: Not only are all these non-union grocers, which are adding stores rapidly, added competition for the Sacramento region's "Big Three" unionized supermarket chain's - Raley's, Save Mart/Lucky and Safeway - they also will make Tesco's launch of Fresh & Easy in the region less than a month from today much more difficult and competitive (and expensive) than it would have been had the retailer started opening its stores back in 2009-2010 as it originally planned to so.

Why: The level of competition was much less then that it is now - and it's going to get even more competitive in the metro-Sacramento market over the next year and beyond, particularly as Walmart starts opening its smaller format Walmart Neighborhood Market supermarkets in the region, many of which - for example a Walmart Neighborhood Market is slated for Lincoln, California - are located not far from future Fresh & Easy locations in the Sacramento metropolitan region, along with in other parts of Northern California.

Suggested Reading

August 29, 2011: Meaningful Move or Too Little Too Late? Fresh & Easy Neighborhood Market Planning Early 2012 Metro Sacramento Market Launch

August 31, 2011: Tesco Says Sayonara to Japan, Good Morning to Sacramento

January 18, 2012: Fast-Growing The Fresh Market Chain On Track to Launch in California This Year

January 8, 2012: Tesco to Close Up to 12 Fresh & Easy Stores

January 9, 2012: Exclusive: Tesco's Fresh & Easy Closing 12 Stores; We Have the Locations

December 5, 2011: Dollar General Jump-Starts California Launch: Taking Over 5 Centro Mart Supermarkets For Early 2012 Openings

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

February 1, 2012: Tesco's Fresh & Easy By the Numbers ... In Case You Want to Keep Score at Home or in the Office

Wednesday, February 8, 2012

Ellen DeGeneres 'Goes Bananas' At A Fresh & Easy Store in Burbank

On Sunday, February 5 we reported (see the story and photos below on the blog or here) on the new "Scan As You Shop" hand-held customer scanning system Tesco's Fresh & Easy Neighborhood Market is testing at its store at Olive and Verdugo in Burbank, California.

Our reporting included a visit to the grocery market last week.

But today the Burbank Fresh & Easy store had a much more famous visitor - at least by proxy.

Television talk show host Ellen DeGeneres sent her writer, Amy Rhodes, to the Burbank Fresh & Easy market, where she posed as the produce manager, for the "Hidden Camera Pranks" segment of the show.

Hidden cameras were placed throughout the store, and the writer, who Ellen sends out on various adventures, was equipped with a hidden earpiece in her ear, which allowed the comedian and talk show maven to interact with customers by instructing her - like trying to convince customers to purchase bananas, for example - through the earpiece, as you'll see in the video of the segment at top.

By the way, that's one of the "Scan As You Shop" units the customer in the produce department is holding and using at the start of the video segment.

Tuesday, February 7, 2012

Deal Announcement From Grocers Sprouts and Sunflower Farmers Market on Tap

The Insider - Heard on the Street

It was in this November 6, 2011 column - Roll Up Times Two? Sprouts Farmers Market In Talks With Sunflower Farmers Market About Possible Acquisition - when I first broke the news that kissing cousin format grocery chains Sprouts Farmers Market and Sunflower Farmers Market were engaged in acquisition-merger deal negotiations, with Sprouts' either acquiring Sunflower Farmers Market outright or Sunflower being merged into Sprouts Farmers Market, with Sprouts' as the controlling entity.

On January 25, 2012 [See - January 25, 2012: Sprouts Farmers Market and Sunflower Farmers Market Ink Acquisition-Merger Deal] I reported that Phoenix, Arizona-based Sprouts, which operates 103 stores - a new store opens tomorrow in Yorba Linda, California - in Arizona, California, Colorado and Texas, and Sunflower Farmers Market, which is headquartered in Colorado and has its operations office in Phoenix Arizona, had reached a deal, pending the ironing out of a few details.

Sunflower Farmers Market, which like Sprouts Farmers Market is privately-held, operates 35 stores in Colorado (12), Arizona (7), New Mexico (6), Nevada (2), Texas (2), Oklahoma (1), Utah (3) and California (2).

Those details have now been resolved, according to my sources, and the two farmers market-style grocery chains are preparing to make an announcement about the acquisition-merger deal.

The announcement should come before the end of this week. However, there are some logistical and related issues that could result in the announcement coming a bit later.

Roll up: Sunflower makes two

It's been less than a year since the acquisition-merger deal between Henry's Farmers Market and Sprouts Farmers Market became final on April 18, 2011.

In January 2011, I broke the news in this column - Will 2011 See Sprouts Farmers Market Acquiring Henry's Farmers Market? 'The Insider' Says it Could Be in The Cards - that Sprouts' and Apollo/Henry's were in acquisition/merger negotiations.

I continued to report extensively on the deal talks throughout January 2011 and into February. [See those reports and columns here and here.]

On Wednesday, February 16, 2011, the two grocers announced the deal. [See: Breaking: Smart & Final Enters Into Agreement to Sell Henry's to Sprouts Farmers Market. The day before, on February 15, 2011, I published this: Sprouts Farmers Market's Acquisition of Henry's to Be Announced This Week, As Early As Wednesday.

Henry's was owned at the time by private equity firm Apollo Global Management (through its Smart & Final food retailing company), which was founded by Leon Black, who remains its chief deal-maker.

Apollo and Sprouts' founders and part-owners merged the Henry's Farmers Market chain into Sprouts Farmers Market, with Henry's going away and Sprouts' in control of the combined chains.

The deal made Apollo Global Management the majority owner of Sprouts Farmers Market.

In addition to Apollo, Sprouts has about 200 investors, most of them individuals. The investors range from a few who hold a considerable amount of stock to others who hold a few shares. Sprouts Farmers Market is not a publicly-held company, however.

Stan and Sean Boney, the chairman and CEO of Sprouts respectively, and board members Scott Wing and Kevin Easler - the four men founded Sprouts Farmers Market in 2002 - have minority ownership stakes in Sprouts Farmers Market, along with the investors. The individual investors were in place before Apollo's involvement.

Doug Sanders is Sprouts' president. He's responsible for the chain's operations, reporting to Sean Boney. Jim Nielson, who was president of Henry's Farmers Market, joined Sprouts Farmers Market last year as part of the merger deal. He is Sprouts' chief operating officer, reporting to Doug Sanders.

Co-founders Stan Boney and CEO Sean Boney, who is Stan's son, had wanted to acquire the Henry's chain, which was founded by Stan Boney's father Henry, for many years.

Stan Boney was the chairman and CEO of the then family-owned Henry's chain until 1999, when it was sold to Wild Oats Markets, which was acquired by Whole Foods Markets in 2007. Three years later he started Sprouts Farmers Market with his son and the two partners/co-founders.

The deal with Apollo Global Management was a good one for Sprouts, not only because it brought Henry's in-house but because it also provides the chain with a constant source of investment capital, private equity firm and majority-owner Apollo, which is also something the Boney's were after to help fuel their growth plans for Sprouts Farmers Market.

Apollo has even more ambitious growth plans for the chain that the founders did, which of course is what private equity firms do - grow a business and then eventually sell it and make a profit.

The deal also took one of Sprouts' two farmers market-style kissing cousin format cousins out as a direct competitor. Instead, the kissing cousin, Henry's, moved into the same house, called Sprouts Farmers Market.

That other kissing cousin competitor is, of course - Sunflower Farmers Market.

And soon it will join its farmers market-style format kissing cousins; all three - Sprouts, Henry's and Sunflower - under the same roof, and the roll up will be completed.

- The Insider

[Readers: Go to these links - , , , , , ,   - for an extensive selection of related stories.]