Tesco is Incorporating New Interior Design Elements and Enhancements Inside its 61 Fresh & Easy Neighborhood Market Grocery Stores

The Fresh & Easy store pictured above in Laguna Hills, California is one of the first of the 61 stores currently open to receive the retailer's new interior design enhancements. For example, The mural-graphic above the front doors in the photograph is brand new. (Photo: Courtesy Fast Food Maven Blog, Orange County Register.)

Tesco has started making some interior design additions and upgrades to its Fresh & Easy small-format, convenience-oriented grocery stores.

The retailer currently operates 61 of the combination basic grocery and fresh foods markets in Southern California, the Phoenix Metropolitan-East Valley region in Arizona, and in the Las Vegas Metropolitan area in Nevada.

The interior design enhancements and upgrades include adding brighter colors inside the grocery markets, more directional, informational and product signage, some new graphics, and creating a brighter, warmer and less sterile in-store experience overall for shoppers.

Fresh & Easy Buzz welcomes these in-store design changes, additions and enhancements, since we've been one of the first and most-regularly vocal constructive critics of what we've called a lack of a "sense of place" inside the Fresh & Easy grocery stores.

[This pertains to the majority of the stores which are located in former retail buildings Tesco has remodeled into its Fresh & Easy format and stores. We've visited two stores, one in Las Vegas the other in Indio, California, which are brand new, built from the ground up Fresh & Easy markets, and have a generally favorable opinion of the interior design and look of those stores, which are built to the Fresh & Easy new store prototype.)

Many other analysts have joined Fresh & Easy Buzz's "lack of a sense of place" position over the last few months regarding the look and feel of the Fresh & Easy stores. We based our assessment of the store interiors not only on our own experience and analysis, but on conversations we've had with about 250 Fresh & Easy customers over the last five months or so, as well as on reading hundreds of online comments from consumers about the stores, lots of emails and comments on the blog.

In addition to our own analysis that the stores are too cold and sterile and lack a "sense of place," this opinion has been predominant in our conversations with customers, as well as from the other information sources mentioned above.

It appears Tesco's Fresh & Easy Neighborhood Market also agrees with our and others (especially customers) assessment, as the retailer sent a memo to all its store-level employees in Southern California, Arizona and Nevada, informing them of the new store interior design additions and enhancements, saying in the memo the retailer was responding to customer feedback that the stores are cold and sterile, and therefore is introducing the interior design enhancements.

Thus far, Tesco has introduced the interior design enhancements at two Fresh & Easy stores in Southern California: the Laguna Hills store in Orange County and the Eagle Rock store in Los Angeles; along with making the additions in a couple stores in Arizona.

Fresh & Easy Neighborhood Market says all of its stores will have the interior design enhancements by July 2. July 2 also is the date the next new Fresh & Easy grocery store opens, in Manhattan Beach, California.

Tesco is taking a new store opening pause from April until July 2, as we've written about several times.

One Wednesday, we talked to an employee of the Laguna Hills store, who told us customers have been responding rather positively to the interior design enhancements. In particular the employee said numerous customers have mentioned the store feels much less sterile and is far brighter than it was before the new brighter color and other design additions were made.

Additionally, Mike Ragone, a Fresh & Easy Buzz reader who lives not far form the Laguna Hills store and has been in it before the design enhancements were made, told us he visited the Laguna Hills store this week, and noticed the changes.

Ragone says the improvement is considerable in terms of brightening the store up, but added he thinks other interior changes should be made in order to give the store (and all the Fresh & Easy stores in the converted buildings) a warmer, more appealing look and feel.

A consumer, Troy, commented in the Fast Food Maven Blog written by Orange County Register business reporter Nancy Luna, he particularly likes the "Thank You For Shopping With Us" mural in the picture at the top of this piece that's been added on the wall above the entrance doors in the Laguna Hills store. Troy's comment:

Troy Says: May 12th, 2008 at 1:14 pm
I like the new “thank you for shopping with us” mural they just added to the Laguna store, pictured above. That’s exactly the type of decor and personality infusion these sterile stores need. See Tesco, it’s not that hard to have a personality! Keep it up and I may give the Orange store another try after you fix it.

Fresh & Easy Buzz is looking forward to seeing the new interior design enhancements in the stores in the coming week or so.

Since we've been one of the major proponents suggesting Tesco needs to make the stores warmer and brighter in a quest to create a "sense of place" in them, we think the changes--whether they are enough or not at this point in time--are a good, positive and welcome move by Tesco's Fresh & Easy Neighborhood Market.

As our regular readers know,--and non-regular readers will learn by reading further--Fresh & Easy Buzz also suggests Tesco needs to customize and localize the store interiors a bit on top of its basic Fresh & Easy blueprint and footprint.

For example, we suggest adding Southwestern or similar flairs in the Arizona stores, along with minor things unique to particular neighborhoods in the region, as well as doing the same with the Southern California and Las Vegas Metropolitan area stores, regarding local attributes in those store's areas.

In many cases, this can be as simple as using signage, artwork and murals reflecting local history, culture and demographics.

The customization and localization process also can be tied-in to bringing in locally-produced foods, and then using in-store graphics and signage to play up the local products. This serves two purposes: it promotes local foods, and it better localizes the stores to their respective neighborhoods. In other words, it helps to put the "Neighborhood" in Fresh & Easy Neighborhood Market.

Fresh & Easy Buzz recently talked with a source who was present when Tesco's Fresh & Easy was interviewing potential new public relations firms a couple months ago. As we reported here, the retailer has chosen a new PR firm. The source told us during the "pitch meeting" Fresh & Easy executives mentioned recognizing a need to better customize and localize the stores, including using the phrase "to better reflect the history and culture of the neighborhoods."

The Fresh & Easy Neighborhood Market executives said in the meeting however, that it wasn't something they were going to be able to do anytime soon, because of the rapid new store opening pace on the agenda, along with some other "more pressing" things.

Based on this information, it does appear a couple key Tesco Fresh & Easy Neighborhood Market execs clearly get the need to and the importance of customizing and localizing the store's interior design elements as a way to create a better "sense of the place" in the stores, which most likely will result in our analysis in creating more repeat and primary customers, bigger store average ring or market basic averages, and generating lots of new customer trail for the stores. Of course, often timing is everything in food retailing.

Perhaps they current decision to add the interior enhancement package is in part a stop gap to eventually being able to also add regional and local customized design elements to the stores on top of the basic Fresh & Easy store format blueprint?

As we've often written here on Fresh & Easy Buzz, one of Tesco's key strengths as a retailer is its proven ability to course-correct. We give Fresh & Easy credit for doing so in the current design enhancement package the retailer is adding to the stores--even if when we see the enhancements we personally don't like them--which would not in any way detract from our giving the retailer credit for making them, and making the course correction.

We don't shy away from our analysis that Fresh & Easy has numerous problems. But like we always caution, those who've already ruled Tesco out of the success equation with its small-format, convenience-oriented Fresh & Easy grocery stores do so at their own peril.

After all, most of the 61 stores haven't even been open for more than four months, and Tesco is course-correcting by making the interior design package enhancements to the stores. Perhaps they should have done it sooner, and perhaps it won't make a difference--but then again perhaps it will. A bit of time is needed to make a proper assessment either way.

But, what's important is the retailer listened to those (especially customers who are the most important) and made a course-correction in terms of realizing the stores were too sterile and cold, and is attempting to do something to improve that fact by adding the interior design enhancements.

That's what good, world-class retailers do. [By the way, we also like the mural/graphic depicted in the photograph at the top of this piece, which is above the front doors in the Laguna Hills' Fresh & Easy store.]

Vox Populi: Let The People Speak

Feel free to use the "comments" link below to offer your analysis and opinions on the design of the Fresh & Easy grocery stores, along with offering any ideas and suggestions about interior design enhancements Tesco could or should make to the stores in order to improve them. If you like the stores just as they are, feel free to express that opinion as well, and to elaborate as much as you like.

Supermarket News' Fresh & Easy Cover Story: Industry Analysts and Others Agree With Our Multi-Month Argument That Fresh & Easy Stores Need Local Focus

The cover story of This week's Supermarket News, a supermarket and grocery industry trade publication, is titled: "Fixing Fresh & Easy." The cover story discusses what various supermarket industry analysts and others believe might be some changes Tesco will make in its Fresh & Easy Neighborhood Market small-format, hybrid basic grocery and fresh foods grocery markets.

The top-two speculated upon or suggested changes quoted in the report are:

>"Tailoring the (Fresh & Easy store) offering better" to individual neighborhoods where the Fresh & Easy stores are located.

>Creating more awareness through advertising

In fact, the headline of the report in today's Supermarket News' online addition is: "Analysts See Need For Tailored Offering at Fresh & Easy."

Local and Neighborhood Focus Customization

Bingo: As our readers know, Fresh & Easy Buzz has been the 'local neighborhood focus, custom-tailored offering' evangelist among industry publications, suggesting and arguing the number-one change Tesco needs to make with it's Fresh & Easy convenience-oriented grocery markets is to better localize and custom-tailor the store format, operations, marketing, merchandising and product selections to the neighborhoods the stores are located in. [Look through are archives, as well as clicking the links above and elsewhere we've provided for you, and you will find dozens of pieces and stores where the importance of this "localism" is mentioned and discussed.]

We've also evangelized on the local neighborhood/custom-tailored offering topic further, suggesting Tesco needs to better understand (and respect) the history, culture and demographics of each store neighborhood in order to tailor the store offerings to that respective neighborhood if the grocer wants to succeed in the highly-competitive markets it has entered.

We weren't interviewed for the Supermarket News cover story; nor did we want to be. However, we do know that some of those who were interviewed for the story read Fresh & Easy Buzz. Since our Google and Yahoo searches haven't found many (really any to be honest) other analysts, industry professionals and writers arguing the importance of the local angle vis-a-vis Fresh & Easy, we say..."It's good to be read."

Further, in this seperate editorial commentary piece, Supermarket News editor David Orgel emphasises the local neighborhood store customization factor, which we've been pointing out for about four months in opur analysis, is a serious problem for Tesco and one of the reasons for the sales under-performance of the Fresh & Easy stores to date.

Advertising

We've also been about the only analyst we can find who has talked about the serious need for Tesco to create awareness of the Fresh & Easy grocery stores via an advertising program, rather than relying completely on public relations-driven "free media," which the grocery chain has done to date. Media marketing is excellent. But it's not a substitute for advertising, especially in the case of a retail start-up.

As we wrote in this analysis piece titled, "Fresh & Easy @ 50 (Stores): An Analysis and Some Suggestions For Going Forward," our suggestion to Tesco is to launch targeted radio advertising campaigns for its Fresh & Easy grocery markets. Why radio? For three main reasons:

First, the regions where Tesco has its 59 Fresh & Easy grocery stores to date--Southern California, the Phoenix, Arizona/East Valley Metropolitan area, and the Las Vegas, Nevada Metro region, all happen to be excellent radio advertising markets. One key reason all three market regions are excellent radio markets is because they're commuter regions. People spend hours in their cars commuting to and from work, along with driving to other business-related and leisure outings, and as a result are captive audiences for radio advertisers. These regions are dominated by the automobile.

Second, (and in conjunction with the first reason) radio is a great medium for target marketing. For example, in Southern California Tesco can run radio spots in just Orange County, just in the Inland Empire region, or just in the San Diego area, rather than in the entire Southern California region. Or, a marketer can run radio ads in the entire Southern California region all at once. It all depends on the strategy. And, a marketer can turn them on in one region, off in another--and analyze the results without wasting lots of money.

Lastly, (combined with one and two above) radio ads are super cost-effective. Radio makes multiple-impressions but doesn't come close to the cost of television or even print (cost per-impression) in most cases. Right now, radio advertising rates are very competitive because of the economic downturn in the U.S. This is especially the case with radio advertising in California, Arizona and Nevada, which are three of the hardest hit state economies in the nation.

The radio ad campaign needs to be done in conjunction (integrated) with a good PR-oriented marketing communications program ("free media"), smart and creative in-store promotions, the weekly product advertising circular, and aggressive and meaningful community relations programs.

By integrating all these elements, and doing it well, Tesco will find the consumer awareness factor of the Fresh & Easy stores will zoom.

And the beauty of it all is, because Fresh & Easy is following what we call a "critical mass" retail strategy (locating numerous stores close together in a region similar to the Starbucks model) , an integrated marketing campaign--with radio as the lead horse--like we describe above can be done for such a reasonable cost, that Tesco brass in the UK might wonder why Fresh & Easy's marketing budget is so low. It's all in the plan, creativity and implementation.

Conclusion

We've been pointing out that two of the key reasons the 59 Fresh & Easy small-format grocery stores have been seriously under-performing vis-a-vis Tesco's weekly sales targets (our estimate of weekly per-store sales of $60,000 -to- $100,000, compared to Tesco's target of $200,000) are (1) a lack of focus on localizing the stores and their product mix to the respective neighborhoods the stores are in,and (2) a general lack of awareness among consumers that the Fresh & Easy markets even exist in their areas.

It's nice to have a number of other analysts and others join us.

End-of-The-Week Tesco Fresh & Easy Neighborhood Market News Roundup

New Store Development(s)

Delta Fresh (& Easy): A developer in the city of Bethel Island in Northern California is in discussions with Tesco's Fresh & Easy Neighborhood Market to locate one of its small-format grocery stores in Laurel Plaza, a shopping center being developed by local developer O' Hara Properties on the northwest corner of Laura Road and O'Hara Avenue in this small California Delta city of less then 10,000 residents in the Bay Area county of Contra Costa, according to Rebeca Willis, Bethel Island's community development director. The City Council approved the development yesterday.

The city is located in Northern California's Delta region. It's about 60 miles from both San Francisco in the Bay Area and Sacramento in the Central Valley. It's also about 30 miles from Stockton, where we've reported Tesco plans on locating its Northern California region distribution center, which would service its grocery markets in Northern and Central California.

The developer already has a Rite Aid drug store lined up to go in the shopping center. A bank and a coffee shop/cafe also are negotiating for space in Laura Plaza. The original plans for the center include two fast-food restaurants. However, the developer is negotiating with Tesco's Fresh & Easy as it would like to have a grocery store to anchor the new commercial development rather than the two fast food shops.

The project's architect, Tom Wilson of Arch Architects, seems to think its likely Fresh & Easy will sign a lease for a store in the center. His plans for the center show an attractive setting with contemporary buildings which blend in with the city's design, landscaping that screens the shopping center from the street, plaza's with tables and chairs, numerous pedestrian walkways, and about 160 trees located throughout the commercial retail development.

As we've reported, Fresh & Easy has thus far signed leases for 18 stores in the San Francisco Bay area and for 19 units in the Sacramento Metropolitan region in Northern California. The first stores are slated to start opening as early as the end of this year, but more likely in early 2009. We've said more leases--and store locations-- are on the way beyond those initial 37 for Northern California. It looks like the new Laural Plaza center in Bethel Island could be one of those new locations.

(Retail) anchor away in Bakersfield: As we reported earlier this week, Tesco's Fresh & Easy Neighborhood Market is planning to open at least six stores in the Bakersfield, California Metropolitan area: three units in the city of Bakersfield and one store each in the nearby city's of Wasco and Delano.

One of the three Fresh & Easy grocery stores slated for Bakersfield will be the retail anchor of a new 11-acre shopping center called Mustang Square. In addition to the 10,000 square foot Fresh & Easy store, the center will include a Walgreen's Drug, a car wash and two drive-through restaurants. The new development is near the city's Stockdale High School.

Neighborhood residents were all for the Fresh & Easy grocery store and the Walgreen's, but a number of nearby residents recently came out against locating the car wash and the two drive-through fast food restaurants in the new center because they said the businesses would cause too much noise for the nearby residential neighborhood.

There was worry for a time that the entire project would fail to gain approval. However, the developer of the proposed shopping center said he would revise the center's design and make other changes in order to minimize noise from the car wash and fast food restaurants. That was enough for the Bakersfield City Council. Last night the legislative body approved the plans for the center on a 6 -to- 1 vote, with only one member dissenting. The center--and thus the new Fresh & Easy grocery market-- is scheduled to open sometime in 2009.

Spirits are down--beer and wine only: The state of California has refused to approve a liquor license application for a Fresh & Easy grocery store in Van Nuys (Southern) California after a coalition of community and neighborhood groups based in Los Angeles petitioned and lobbied the state booze board, arguing there are already too many stores selling spirits in the area. The state liquor license review board agreed and denied Tesco's application.

The store can still sell beer and wine, since virtually any retailer in the state can sell the beverages in the adult drinks categories as long as they meet minimal qualifications and pay for and legally obtain a permit. However, it's not known if Tesco will go forward with the Van Nuys Fresh & Easy store absent being able to sell spirits at the proposed location. A Tesco spokesman said one option would be to not locate a store in the city at all. The other would be to go forward and sell just beer and wine at the proposed Van Nuys unit.

Van Nuys is a district in the city of Los Angeles and part of Los Angeles County. The Los Angeles-based coalition tells us it plans to protest other Fresh & Easy proposed store liquor license applications in Los Angeles County, and perhaps in other Southern California counties as well.

Vox Populi: Bloggers Speak Out on Fresh & Easy

Jennifer's new love: JENMARIE702 (aka: Jennifer) is a working mom who writes a blog called...you guessed it, JENMARIE702. Blogger Jennifer lives in Las Vegas, Nevada, is 28 years old, and her astrological sign is Aries. what more do you really need to know?

Well, one more thing... JENMARIE702 says she has a new love. No, it's not a new significant other. Rather, she says in a blog post from yesterday that her new love is one of the Las Vegas Metro region Fresh & Easy grocery stores where she has been shopping of late. Read what Jennifer thinks--and feels--about this new love in her life here.

An underwhelmed brand manager: One the other hand, Dave Knox, who is a marketing guy and a brand manager for consumer products giant Proctor & Gamble (P&G), was recently visiting Las Vegas and spent some time in a Fresh & Easy grocery store there. Knox, who writes his own marketing blog called "It's a Hard Knox Life," when he isn't analyzing, positioning and messaging over at P&G, says he was very underwhelmed by the Fresh & Easy concept and store. Read P&G brand manager Knox's analysis--"Fresh & Easy Leaves Me Underwhelmed"--of the Fresh & Easy grocery market he visited in Las Vegas here.

When Tara Met Fresh & Easy: Tara Renee Settembre is a twenty-something woman who works in high-tech PR in Los Angeles. Tara also writes a personal blog called When Tara Met Blog. Tara's blog is hip, yet real. She's a New York native who picked-up and moved to the left coast--and often writes about the differences between the two regions in her blog.

Tara also writes about an eclectic range of subjects: her personal adventures, the celebrities she runs into in Hollywood, relationships, fashion, film reviews and even cupcakes. Tara Met cupcake...and loved it, by the way.

A few other facts about Tara: If she were a crayon, she says she would be a red one. Her favorite drink is green tea...and red wine. Baseball is her favorite sport. The New York Yankees are her favorite team, despite the fact she now lives in the heart of LA Dodgers' country. Also...Tara prefers the taste of chocolate but the smell of vanilla. And, despite the carbs, pasta is her favorite food. [More Tara facts here.]

Tara recently sent us a link to her blog post about her first visit to the recently-opened Fresh & Easy grocery store in Hollywood, California. The store is located on Hollywood Blvd., right along the famous "Walk of Stars." Read what Tara has to say about her first Fresh & Easy shopping trip here. Or, as we like to call it, "When Tara Met Fresh & Easy." [You can read our January and February coverage of the Fresh & Easy Hollywood grand opening here.]

Fresh & Easy-Ecetra

The 'World Retail Awards': Tesco's Fresh & Easy Neighborhood Market has been nominated in the category of Innovative Retail Format of the Year for this year's annual World Retail Awards competition, which will be held on April 10th in Barcelona, Spain. Fresh & Easy is the only nominee in this category from the United States.

Tesco Tidbits

Breaking into Tesco: United Kingdom-based Tesco plc., the parent company of Fresh & Easy Neighborhood Market in the U.S., now has its very own reality show on the telly in the UK. The new show is called "Breaking Into Tesco." The reality show's concept: It's about a bunch of home cooks and potential entrepreneurs competing against each other to get their dishes onto the shelves as products in Tesco supermarkets in the UK. Since Tesco is the largest food retailer in the UK--that's a big deal. Read more about the reality show here.

Tesco v. Sainsbury's in the UK : One man's view: A blog called Economics Help has a short and interesting piece comparing Tesco, the UK's largest retailer with about a 34% share of the grocery sales market, and Sainsbury's, the number two grocery retailer in the nation. The blog is written by an economics teacher, Tejvan Richard Pettinger, who lives and works in Oxford, England. Read Mr. Pettinger's comparison between the two United Kingdom grocery chains--and their stores--here

UK 'green' grocers: Joanna Blythman, a writer for Scotland's Sunday Herald newspaper, has an essay in the paper about the movement to banish, or greatly reduced, the use of plastic grocery or carrier bags in the United Kingdom. She talks about the various retail players, including Tesco, and their behavior vis-a-vis the plastic bag issue in her piece called "A misleading shade of green," which you can read here.

One bag per sprout please: Speaking of plastic bags, it seems that a man named Howard Cooper made a small mistake when he placed an online order for Brussels Sprouts through Tesco Direct, the retailer's home delivery service website in the United Kingdom. Mr. Cooper meant to order a whole bunch of the little Green Brussels sprouts but somehow ended up only ordering one solitary sprout. Tesco Direct however filled his order, and packed the single sprout in its very own plastic bag, Read more here.

A taxing situation: There's been lots of talk in British business and political circles since the Guardian newspaper ran a series of articles a couple weeks ago which suggested Tesco has been avoiding paying its fair share of taxes in its home country. Rather, the Guardian says Tesco has been sheltering funds offshore so as to avoid paying its full share to the man. Other UK newspapers have picked up the story as well. Tesco denies the Guardian's (and others) claims in its stories. The UK Parliament says it plans to investigate. Read more here, here and here.