tag:blogger.com,1999:blog-3023018867778958193.post9147858848458954831..comments2023-12-15T00:16:54.199-08:00Comments on Fresh & Easy Buzz: Tesco's Fresh & Easy, 'Food Deserts' and WIC Vouchers; A 'Year-End' Analysis & CommentaryFresh & Easy Buzzhttp://www.blogger.com/profile/06339190145395775927noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-3023018867778958193.post-65262010395775328162011-08-25T15:10:10.849-07:002011-08-25T15:10:10.849-07:00Anon August 25, 2011 2:59 AM
The executive direct...Anon August 25, 2011 2:59 AM<br /><br />The executive director of California's WIC agency told us a long time ago that Fresh & Easy Neighborhood Market is licenced to except WIC Vouchers.<br /><br />In fact, at the time she was under the impression Fresh & Easy was taking WIC at all its stores in California; she even mentioned it in a speech at a food industry conference in 2009.<br /><br />Additionally, Fresh & Easy does except WIC at one store - the unit in South Los Angeles.<br /><br />A source at the chain also tells us Fresh & Easy plans to except WIC at the store opened yesterday in San Francisco's Bayview-Hunters Point neighborhood.<br /><br />We first suggested back in 2008 that Fresh & Easy would be making a big mistake by not excepting WIC at the Bayview store when it opened it, as is the case at many other locations.<br /><br />Fresh & Easy is not excepting WIC at the Bayview store yet though, which suggests it hadn't planned on doing so. However, we happen to know, since we've heard from many residents of the neighborhood and a politician or two in San Francisco about our extensive coverage of the topic, that a number of these folks have prevailed on Fresh & Easy to do so at the store.<br /><br />If you type in "WIC Vouchers" in the search box at the top of the blog (upper left corner) you can see our numerous stories on the topic.<br /><br />-EditorFresh & Easy Buzzhttps://www.blogger.com/profile/06339190145395775927noreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-25829939388609497992011-08-25T02:59:31.154-07:002011-08-25T02:59:31.154-07:00After doing some research for my own business mode...After doing some research for my own business model, I have discovered that CA has placed a moratoriam on any new wic vendors. This may also be a factor in why F&E doesnt accept WIC- although this was recently placed into effect, if there was knowledge of this in the wind it may explain why the company failed to get licensed to be a vendor.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-58031071761540107552009-10-26T23:33:48.678-07:002009-10-26T23:33:48.678-07:00WIC has changed the was you purchase groceries wit...WIC has changed the was you purchase groceries with WIC checks... you can buy any brand of what is on the check (except certain items like formula or soy milk). So F&E wouldn't need to carry special brands just for WIC customers, hopefully they will begin to accept them soon! There is a F&E store right around the corner from my house and I would love to shop there instead of the WIC only store in my neighborhood, which carries very strange brands I've never heard of yet charges at least double what I would expect to pay in the regular grocery store, all so they make a HUGE profit from our government.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-281221759709002522009-03-20T20:49:00.000-07:002009-03-20T20:49:00.000-07:00It is "free money." If a store brings in $1,000 i...It is "free money." If a store brings in $1,000 in one week from WIC vouchers, that's 1-k more than it would bring in by not taking them. It takes no more effort to process WIC at the checkout than it takes to give back change for a $6.72 purchase paid for by a $20. The vouchers are processed by supermarkets right along with checks. There is no special handling. So, it's free money if you don't take them and then do for sure. I managed a supermarket for years. We did about 15-k a week in WIC. Weekly sales of 600-k. That 15-k paid for one or more employees.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-51718957663357664892009-01-27T10:54:00.000-08:002009-01-27T10:54:00.000-08:00thanks for responding...Agreed with most of your p...thanks for responding...<BR/><BR/>Agreed with most of your points. However I think you are giving grocers to much credit in the ‘do the right thing’ category. For any business to run effectively (profitably) it has to be neutral when it comes to feel good issue. Supporting the expansion of WIC items is purely motivated by increasing profits or increasing ones position above a competitor. I don’t think this conflicts with any of your arguments, I’m just saying that if it became a liability to accept WIC and a grocer could drop out of the program without losing customer share, they would likely do so. Since they can’t, they can honestly say that they support WIC because its good for the community..and it is.<BR/><BR/>Thanks for clarifying the reason F&E does not currently accept WIC (paper handling issues). This isn’t as simple as it sounds to correct. Although WIC is an extremely successful program from all points of view, it does have two major obstacles. First, from the client point of view, selecting WIC approved items can be quite confusing. Supermarkets that I’ve been to do a very poor job of identifying “WIC approved” items. Customers are frustrated. Second, the check out process is a major time consumer for the grocer perspective. Vouchers for WIC are itemized. This means that each product has to rung up as separate transactions. Milk on one voucher, formula on another, eggs and peanut butter on still another. Add to this the confusion factor ‘sorry, this is not a WIC item’ and you get delays at the check out (for these reasons, the rise of the WIC Only store model has been phenomenal) If F&E’s policy is to reduce paper handling, not accepting WIC logically follows. WIC could make this a lot easier if they did away with the paper check model and issued debit cards.<BR/><BR/>Lastly, accepting WIC is an ‘all in’ proposition. A grocer can’t be WIC authorized by just selling the high profit WIC items. They would have to carry the highly profitable milk and baby formula, and low/no profit peanut butter, cereal, and tuna. How can peanut butter be a low/no profit item? Because WIC forces the grocer to carry an approved size and brand. If I am grocer X and I have my own store brand that I sell for less, WIC forces me to sell a brand that is higher priced but less profit margin. The majority of my customers are value shoppers (WIC clients are not, that’s a proven fact, again see the WIC Only store model) and will never buy the WIC approved brand because it is priced higher than my store brand. If you are a large chain this does not factor as much because you have more shelf space and sales and coupons can make all products competitive. For F&E this may not be an option. Shelf space is limited and their brand may offer a higher profit than the WIC accepted brand. <BR/><BR/>It would interesting to see how F&E addresses this issue down the road because they should carry WIC approved items if they want to support their target communities.. But will they have the backing of the ‘grocer association’ if they lobby to loosen the brand restrictions opening the door to WIC accepting more store brands? Maybe not, because this would open the door to an aggressive competitor that can steal market share. (btw I’ve never been to a F&E, none are yet open if San Francisco).Unknownhttps://www.blogger.com/profile/09133580445003155385noreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-78605175225155645582009-01-26T16:00:00.000-08:002009-01-26T16:00:00.000-08:00PS: russel: Your point about the store brand emph...PS: russel: Your point about the store brand emphasis, ect. is a good one. <BR/><BR/>The explanation we've received from Tesco Fresh & Easy in the past though is that the reason they don't take WIC is the same reason they don't take any type of paper checks or manufacturer's coupons -- because doing so doesn't fit with their reduced handling of paper policy (part of low overhead model) by store employees. And -- that's there right. We just think it's bad operations policy to not take WIC, as you said you agree with. It's sales constriction. We also thing it's bad community relations.<BR/><BR/>One problem with it is that since shoppers can't buy the store brand with WIC, and since F&E doesn't take WIC at all, it's a complete lose-lose for the grocery chain. Also, can tell you from experience that WIC Voucher shoppers also spend cash (and food stamps) in the stores they shop that accept WIC. After all, the WIC items are restricted. So, Fresh & Easy not only is losing out on WIC sales, it's also losing out on the incremental food stamp (which it takes) and cash purchases these shoppers make.<BR/><BR/>From experience very few shoppers just use WIC Vouchers on a shopping trip. Is usually a combination something like this: about 40% of total dollar purchase with WIC. About 40% with food stamps...the rest cash (non-food items)...<BR/><BR/>That's another reasons grocers like WIC.Fresh & Easy Buzzhttps://www.blogger.com/profile/06339190145395775927noreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-67282167155762294842009-01-26T15:50:00.000-08:002009-01-26T15:50:00.000-08:00Thanks for your comment russel. We used "fre...Thanks for your comment russel. <BR/><BR/>We used "free money" only to emphasis a point -- that not taking WIC Vouchers is essentially turning down sales -- which it is.<BR/><BR/>While the profit margin is the same for a grocer regarding WIC or cash, the profit margins on many of the items allowed by the government with WIC (lost sales if a retailer doesn't take WIC) -- infant formula, whole grain cereals, for example -- are very healthy ones. Therefore by not accepting the vouchers, the retailer that refuses them is refusing added sales in general, and in a few specific cases that's lost sales on items with higher than average margins. A double no-no for any good retailer.<BR/><BR/>For example, if you compare infant formula category sales in two stores in the same low income neighborhood -- one store that takes WIC Vouchers the other that doesn't -- you will almost always find much higher sales at the store that accepts WIC. For us that makes good enough economic sense to accept them (regardless of additional arguments to do so), as it is for the over 99% of U.S. grocers who take WIC.<BR/><BR/>You would be stunned to know how much $$$'s sales of products purchased with WIC coupons can add to the annual gross sales of a supermarket chain, particualrly one that has numerous stores in lower income neighborhoods.Food retailing is a penny-profit business. All added sales (at a profit) are needed.<BR/><BR/>It's no mere accident that pretty much every supermarket chain and independent grocer in the U.S. accepts WIC Vouchers. when virtually every supermarket chain and independent shares a practice like accepting WIC Vouchers, we think it is only logical to wonder about the maybe 1% that don't, even from a completely rational economic basis.<BR/><BR/>Lastly, U.S. grocers have always operated with more than mere sales and profit margin in mind and practice. They do this because they know doing things like accepting WIC vouchers from poor mothers -- and being a part of the food assistance system in the country -- is just plain good business. They also do so because grocers are a part of the community they serve, be they Wal-Mart and Safeway or the one store Frank's Market.<BR/><BR/>In fact,America's supermarket industry has historically, and to this day, played a major part in the WIC program. When the federal government was debating a couple years ago adding fresh produce to the items that can be bought with WIC, the supermarket industry, through their trade associations, testified on Capital Hill in favor of new legislation adding fruits and veggies to the allowable items. Why? Added sales primarily, doing the right thing second.<BR/><BR/>There is a long relationship between the U.S. government and the food retailing industry when it comes to food assistance programs like WIC and food stamps. In fact, the supermarket industry has a voluntary guideline that accepting both WIC and food stamps are part of industry good business practices. <BR/><BR/>Doing so also makes good sales sense. Wic Vouchers are merely another way to pay for food.So in that sense, refusing them is like refusing "free money." <BR/><BR/>And in fact they do not cost any more to handle than a check. And they cost less to handle than credit cards, which Fresh & Easy takes, because the grocer does not pay a bank fee for WIC Voucher purcahses like it does for each consumer credit card transaction, which is the case with Visa, Mastercard, ect.<BR/><BR/>Thanks for participating...We appreciate your point of view.Fresh & Easy Buzzhttps://www.blogger.com/profile/06339190145395775927noreply@blogger.comtag:blogger.com,1999:blog-3023018867778958193.post-37661663430635192432009-01-25T20:01:00.000-08:002009-01-25T20:01:00.000-08:00I heartily agree with the position that this chain...I heartily agree with the position that this chain should take WIC vouchers, I however disagree with the statement that F&E is rejecting "free money". The cost to carry WIC items would be the same regardless of whom buys the items. The profit margin for the grocer is the same irregardless if the customer use WIC or not. Accepting WIC would increase "sales" but not the profit margin on the items. <BR/><BR/>Another point...WIC not only restricts what is redeemable, WIC also restricts what brands they accept. This could be a major factor why F&E does not accept WIC. If the chain wants to promote its own 'generic' store brand, then it would have to carry an additional major brand just to accommodate WIC clients. Accepting WIC would bring more customers into the store, but those same customers may generate less ‘profit’ because of the items that WIC forces them to select. <BR/><BR/>Again, I agree that F&E should accept WIC, but in reality its not as easy as it seems on the surface from a grocer point of view. Businesses don’t operate because they want to be “ethical and moral”. They are in it make a profit. When accepting WIC becomes more profitable then not accepting WIC, F&E will change direction on the issue.Unknownhttps://www.blogger.com/profile/09133580445003155385noreply@blogger.com