Showing posts with label Fresh and Easy Bakersfield California. Show all posts
Showing posts with label Fresh and Easy Bakersfield California. Show all posts

Wednesday, December 15, 2010

A Tale of Two California's: Welcome to the Once Thriving Central Valley


Related story: December 15, 2010: Fresh & Easy Neighborhood Market's WIC Voucher Store Expansion Program Stalled.

[Fresh & Easy Buzz editor's note: Noted historian, classics scholar and writer Victor Davis Hanson, who's also a senior fellow at Stanford University's Hoover Institution, is a native of Selma, a small city near Fresno in California's Central Valley, where Tesco's Fresh & Easy Neighborhood market has 14 stores - seven each in the Fresno and Bakersfield metro areas.

Hanson currently lives in Selma, where he runs a family farm in addition to pursuing his scholarly work. Two of his most recent books are, 'Makers of Ancient Strategy: From the Persian Wars to the Fall of Rome,' which he edited, and 'The Father of Us All: War and History, Ancient and Modern,' which he authored.

Victor Davis Hanson, who's also a contributing writer for the conservative publication National Review, spent the last three weeks touring the Fresno, California area and other parts of the valley, including its many rural cities and small towns, by bicycle and automobile. The Central Valley native son scholar- farmer wrote about the results of what he calls his "unscientific experiment" in an essay, "Two California's," published in today's edition of National Review Online.

People of differing political ideologies can disagree with Victor Davis Hanson's arguments as to why the Central Valley is where it is today in terms of its high poverty and high joblessness. But despite those reasonable disagreements, the writer paints a very real picture of a region - California's Central Valley - which just happens to produce more food and fiber than any other place in the world - that's in very real and serious economic trouble.

Below is the Central Valley native's essay, which we're pleased to share with our readers today, courtesy of National Review Online.

December 15, 2010
Two Californias
Abandoned farms, Third World living conditions, pervasive public assistance - welcome to the once-thriving Central Valley.

By: Victor Davis Hanson

The last three weeks I have traveled about, taking the pulse of the more forgotten areas of central California. I wanted to witness, even if superficially, what is happening to a state that has the highest sales and income taxes, the most lavish entitlements, the near-worst public schools (based on federal test scores), and the largest number of illegal aliens in the nation, along with an overregulated private sector, a stagnant and shrinking manufacturing base, and an elite environmental ethos that restricts commerce and productivity without curbing consumption.

During this unscientific experiment, three times a week I rode a bike on a 20-mile trip over various rural roads in southwestern Fresno County. I also drove my car over to the coast to work, on various routes through towns like San Joaquin, Mendota, and Firebaugh. And near my home I have been driving, shopping, and touring by intent the rather segregated and impoverished areas of Caruthers, Fowler, Laton, Orange Cove, Parlier, and Selma. My own farmhouse is now in an area of abject poverty and almost no ethnic diversity; the closest elementary school (my alma mater, two miles away) is 94 percent Hispanic and 1 percent white, and well below federal testing norms in math and English.

Here are some general observations about what I saw (other than that the rural roads of California are fast turning into rubble, poorly maintained and reverting to what I remember seeing long ago in the rural South). First, remember that these areas are the ground zero, so to speak, of 20 years of illegal immigration. There has been a general depression in farming — to such an extent that the 20- to-100-acre tree and vine farmer, the erstwhile backbone of the old rural California, for all practical purposes has ceased to exist.

On the western side of the Central Valley, the effects of arbitrary cutoffs in federal irrigation water have idled tens of thousands of acres of prime agricultural land, leaving thousands unemployed. Manufacturing plants in the towns in these areas — which used to make harvesters, hydraulic lifts, trailers, food-processing equipment — have largely shut down; their production has been shipped off overseas or south of the border. Agriculture itself — from almonds to raisins — has increasingly become corporatized and mechanized, cutting by half the number of farm workers needed. So unemployment runs somewhere between 15 and 20 percent.

Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World. There is a Caribbean look to the junked cars, electric wires crisscrossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming around the yards. The public hears about all sorts of tough California regulations that stymie business — rigid zoning laws, strict building codes, constant inspections — but apparently none of that applies out here.\

It is almost as if the more California regulates, the more it does not regulate. Its public employees prefer to go after misdemeanors in the upscale areas to justify our expensive oversight industry, while ignoring the felonies in the downtrodden areas, which are becoming feral and beyond the ability of any inspector to do anything but feel irrelevant. But in the regulators’ defense, where would one get the money to redo an ad hoc trailer park with a spider web of illegal bare wires?

Many of the rented-out rural shacks and stationary Winnebagos are on former small farms — the vineyards overgrown with weeds, or torn out with the ground lying fallow. I pass on the cultural consequences to communities from the loss of thousands of small farming families. I don’t think I can remember another time when so many acres in the eastern part of the valley have gone out of production, even though farm prices have recently rebounded. Apparently it is simply not worth the gamble of investing $7,000 to $10,000 an acre in a new orchard or vineyard. What an anomaly — with suddenly soaring farm prices, still we have thousands of acres in the world’s richest agricultural belt, with available water on the east side of the valley and plentiful labor, gone idle or in disuse. Is credit frozen? Are there simply no more farmers? Are the schools so bad as to scare away potential agricultural entrepreneurs? Or are we all terrified by the national debt and uncertain future.

California coastal elites may worry about the oxygen content of water available to a three-inch smelt in the Sacramento–San Joaquin River Delta, but they seem to have no interest in the epidemic dumping of trash, furniture, and often toxic substances throughout California’s rural hinterland. Yesterday, for example, I rode my bike by a stopped van just as the occupants tossed seven plastic bags of raw refuse onto the side of the road. I rode up near their bumper and said in my broken Spanish not to throw garbage onto the public road. But there were three of them, and one of me. So I was lucky to be sworn at only. I note in passing that I would not drive into Mexico and, as a guest, dare to pull over and throw seven bags of trash into the environment of my host.

In fact, trash piles are commonplace out here — composed of everything from half-empty paint cans and children’s plastic toys to diapers and moldy food. I have never seen a rural sheriff cite a litterer, or witnessed state EPA workers cleaning up these unauthorized wastelands. So I would suggest to Bay Area scientists that the environment is taking a much harder beating down here in central California than it is in the Delta. Perhaps before we cut off more irrigation water to the west side of the valley, we might invest some green dollars into cleaning up the unsightly and sometimes dangerous garbage that now litters the outskirts of our rural communities.

We hear about the tough small-business regulations that have driven residents out of the state, at the rate of 2,000 to 3,000 a week. But from my unscientific observations these past weeks, it seems rather easy to open a small business in California without any oversight at all, or at least what I might call a “counter business.” I counted eleven mobile hot-kitchen trucks that simply park by the side of the road, spread about some plastic chairs, pull down a tarp canopy, and, presto, become mini-restaurants. There are no “facilities” such as toilets or washrooms. But I do frequently see lard trails on the isolated roads I bike on, where trucks apparently have simply opened their draining tanks and sped on, leaving a slick of cooking fats and oils. Crows and ground squirrels love them; they can be seen from a distance mysteriously occupied in the middle of the road.

At crossroads, peddlers in a counter-California economy sell almost anything. Here is what I noticed at an intersection on the west side last week: shovels, rakes, hoes, gas pumps, lawnmowers, edgers, blowers, jackets, gloves, and caps. The merchandise was all new. I doubt whether in high-tax California sales taxes or income taxes were paid on any of these stop-and-go transactions.

In two supermarkets 50 miles apart, I was the only one in line who did not pay with a social-service plastic card (gone are the days when “food stamps” were embarrassing bulky coupons). But I did not see any relationship between the use of the card and poverty as we once knew it: The electrical appurtenances owned by the user and the car into which the groceries were loaded were indistinguishable from those of the upper middle class.

By that I mean that most consumers drove late-model Camrys, Accords, or Tauruses, had iPhones, Bluetooths, or BlackBerries, and bought everything in the store with public-assistance credit. This seemed a world apart from the trailers I had just ridden by the day before. I don’t editorialize here on the logic or morality of any of this, but I note only that there are vast numbers of people who apparently are not working, are on public food assistance, and enjoy the technological veneer of the middle class. California has a consumer market surely, but often no apparent source of income. Does the $40 million a day supplement to unemployment benefits from Washington explain some of this

Do diversity concerns, as in lack of diversity, work both ways? Over a hundred-mile stretch, when I stopped in San Joaquin for a bottled water, or drove through Orange Cove, or got gas in Parlier, or went to a corner market in southwestern Selma, my home town, I was the only non-Hispanic — there were no Asians, no blacks, no other whites. We may speak of the richness of “diversity,” but those who cherish that ideal simply have no idea that there are now countless inland communities that have become near-apartheid societies, where Spanish is the first language, the schools are not at all diverse, and the federal and state governments are either the main employers or at least the chief sources of income — whether through emergency rooms, rural health clinics, public schools, or social-service offices. An observer from Mars might conclude that our elites and masses have given up on the ideal of integration and assimilation, perhaps in the wake of the arrival of 11 to 15 million illegal aliens.

Again, I do not editorialize, but I note these vast transformations over the last 20 years that are the paradoxical wages of unchecked illegal immigration from Mexico, a vast expansion of California’s entitlements and taxes, the flight of the upper middle class out of state, the deliberate effort not to tap natural resources, the downsizing in manufacturing and agriculture, and the departure of whites, blacks, and Asians from many of these small towns to more racially diverse and upscale areas of California.

Fresno’s California State University campus is embroiled in controversy over the student body president’s announcing that he is an illegal alien, with all the requisite protests in favor of the DREAM Act. I won’t comment on the legislation per se, but again only note the anomaly. I taught at CSUF for 21 years. I think it fair to say that the predominant theme of the Chicano and Latin American Studies program’s sizable curriculum was a fuzzy American culpability. By that I mean that students in those classes heard of the sins of America more often than its attractions. In my home town, Mexican flag decals on car windows are far more common than their American counterparts.

I note this because hundreds of students here illegally are now terrified of being deported to Mexico. I can understand that, given the chaos in Mexico and their own long residency in the United States. But here is what still confuses me: If one were to consider the classes that deal with Mexico at the university, or the visible displays of national chauvinism, then one might conclude that Mexico is a far more attractive and moral place than the United States.

So there is a surreal nature to these protests: something like, “Please do not send me back to the culture I nostalgically praise; please let me stay in the culture that I ignore or deprecate.” I think the DREAM Act protestors might have been far more successful in winning public opinion had they stopped blaming the U.S. for suggesting that they might have to leave at some point, and instead explained why, in fact, they want to stay. What it is about America that makes a youth of 21 go on a hunger strike or demonstrate to be allowed to remain in this country rather than return to the place of his birth?

I think I know the answer to this paradox. Missing entirely in the above description is the attitude of the host, which by any historical standard can only be termed “indifferent.” California does not care whether one broke the law to arrive here or continues to break it by staying. It asks nothing of the illegal immigrant — no proficiency in English, no acquaintance with American history and values, no proof of income, no record of education or skills. It does provide all the public assistance that it can afford (and more that it borrows for), and apparently waives enforcement of most of California’s burdensome regulations and civic statutes that increasingly have plagued productive citizens to the point of driving them out. How odd that we overregulate those who are citizens and have capital to the point of banishing them from the state, but do not regulate those who are aliens and without capital to the point of encouraging millions more to follow in their footsteps. How odd — to paraphrase what Critias once said of ancient Sparta — that California is at once both the nation’s most unfree and most free state, the most repressed and the wildest.

Hundreds of thousands sense all that and vote accordingly with their feet, both into and out of California — and the result is a sort of social, cultural, economic, and political time-bomb, whose ticks are getting louder.

Wednesday, September 15, 2010

Two New Fresh & Easy Neighborhood Market Stores Open in Fresno, California Region Today

Customers wait to enter the New Fresh & Easy store in Fresno, California this morning. The grand opening started at 10 am.

Tesco's Fresh & Easy Neighborhood Market opened its two newest stores this morning to waiting crowds.

The two new markets, which make 165 Fresh & Easy stores as of today, are located in the Fresno Metropolitan region in California's Central Valley.

One store is in Fresno, in a shopping center on the southeast corner of Cedar and Shields avenues. The address is: 3040 North Cedar Avenue. The second Fresh & Easy market is right next door to Fresno, in Clovis. The Clovis store, the second Fresh & Easy unit in the city, is on the northwest corner of Herndon and Fowler avenues, at 1725 Herdon Avenue.

Grand opening celebrations, which started this morning at 10 am, are currently going on at both stores.

Tesco's Fresh & Easy Neighborhood Market now has seven stores in the Fresno Metropolitan region. In addition to the two stores in Clovis, the opening of the new store today in Fresno makes a total of four Fresh & Easy units for Fresno. There's also a Fresh & Easy Neighborhood Market fresh food and grocery store in Reedley, which is in the Fresno Metro region.

Seven & Seven [stores] for the Central Valley

In addition to its seven stores in the Fresno region in California's Central Valley, Tesco has seven Fresh & Easy Neighborhood Market locations farther south in the valley, in the Bakersfield region. Five of the seven stores are in Bakersfield; one is in nearby Wasco; and the other in Delano.

Fresh & Easy by the (store) numbers - and regions

Below is a tally, as of today, of the 165 Fresh & Easy Neighborhood Market stores by region:

~Southern California
=90 stores

~Central Valley, California/Bakersfield region
=7 stores

~Central Valley, California/Fresno region
=7 stores

~Metropolitan Las Vegas, Southern Nevada
=27 stores

~Metropolitan Phoenix, Arizona region
=34 stores

~Total Number stores = 165

Three new stores opening next week

Three new Fresh & Easy markets are set to open on Wednesday, September 22.

All three of the markets are in the San Diego Metro region in Southern California. Two of the stores are in Oceanside and one unit is in San Diego. The locations of the stores are:

>32nd Street & University Avenue, San Diego, California
>River Road. & College Boulevard, Oceanside, California
>College Boulevard & Oceanside Boulevard, Oceanside, California

The September 22 openings are the last three new stores, of the nine units that will have been opened by Tesco's Fresh & Easy this month, set to open in September. At the end of September, Fresh & Easy Neighborhood market will have 168 stores open and operating in California, southern Nevada and Metro Phoenix, Arizona.

Fresh & Easy Buzz has been calling this month 'Big Bag' September for Fresh & Easy Neighborhood Market because of the high number - nine - stores it's opening this month.

But the fresh food and grocery chain didn't open any new stores in May, June, July or August 2010, instead it bunched them all up for openings this month - hence the 'Big Bang' title, so to speak. We reported Tesco's Fresh & Easy was doing this in a June 25, 2010 story: A Four Month Pause: No New Fresh & Easy Neighborhood Market Stores Set to Open Until September 2010].

Therefore, the high number of openings this month should be viewed in this light. For example, if the grocer opened just one new store a month, from May through August, and two stores this month, it would have achieved the same results, a total of nine new stores open and operating by the end of September 2010.

Fresh & Easy has followed this new store opening "bunching up" strategy all year.

To learn what the grocer did from February -to- April of this year in terms of new store openings, read our stories linked at the end of the piece here.

October 2010 openings

As of today, Tesco's Fresh & Easy hasn't announced any new store openings for October.

As we've previously reported, so far, according to our sources, three new stores are planned for October 2010 openings. However, new store openings are a moving target at Fresh & Easy Neighborhood Market headquarters in El Segundo, California. Therefore the number of new stores to be opened in October could increase before the grocery chain makes an announcement, which should be coming soon. Our reporting and planned number of new stores, three, is only as of today.

Related Stories:

September 8, 2010: Fresh & Easy Neighborhood Market Hits (and Breaks) the 100-Store Mark in California With Today's Openings

September 7, 2010: 'Big Bang' September: First Four of Nine New Fresh & Easy Neighborhood Market Stores Opening on September 8

July 14, 2010: Fresh & Easy Neighborhood Market Confirms Our June 25 Report it Will Open Nine New Stores in September 2010

June 25, 2010: A Four Month Pause: No New Fresh & Easy Neighborhood Market Stores Set to Open Until September 2010

June 1, 2010: No New Fresh & Easy Neighborhood Market Stores Likely This Month

May 1, 2010: No New Fresh & Easy Neighborhood Market Stores Set to Open This Month

March 30, 2010: Tesco Set to Open 11 New Fresh & Easy Neighborhood Market Stores in April

March 29, 2010: Tesco's Fresh & Easy Set to Hit 150-Plus Store-Count Mark on April 7

March 16, 2010: A New Fresh & Easy Store Opens in Las Vegas Tomorrow on St. Patrick's Day; Will Tesco CEO Sir Terry Leahy's Proud Irish Eyes Be Smiling?

March 7, 2010: Three New Fresh & Easy Stores Opening This Month; First Opening March 10 in Palm Springs, California

January 27, 2010: February New Store Opening 'Big Bang' For Tesco's Fresh & Easy; Nine New Stores So Far

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

Wednesday, May 19, 2010

Should Adults With Kids, Expectant Moms and Hybrid Auto Drivers Get Preferred Parking at Fresh & Easy?


Fresh & Easy Neighborhood Market takes reserved - and preferential - parking to the next level at its store parking lots. Along with the special "handicapped" parking spots right in front of the stores, which are required by law, the grocery chain offers additional reserved spots for (1) adults with children (with them at the store, not being parents in general), (2) expectant mothers and (3) hybrid vehicles.

Of course, enforcement is another thing.

For example, we've yet to see a Fresh & Easy store clerk ask any customer parked in the "adults with children" spot to produce the kids for verification. Nor have we seen "hybrid vehicle verification specialists" patrolling the parking lots.

In the case of the "expectant mothers" parking spot, some people might say proof can be had with a quick visual. But that's not even completely true, particularly during the first few months of pregnancy. And, what if the customer isn't actually pregnant, just a bit big-boned? Further, what about the father-to-be, who just might be wearing an Empathy Belly? The majority of the Fresh & Easy stores are in California. Should the physically empathetic future dad be excluded from using the reserved spot? He's pregnant after all, just not biologically.

In other words, parking behavior in the reserved parking spots - with the exception of the legally required "handicapped" zones - is on the honor system.

A Fresh & Easy Buzz reader from Bakersfield, California sent us a video clip from last night's ABC TV Channel 23 news broadcast in Bakersfield. The topic of the news report is the preferred parking spots at Fresh & Easy, specifically the store at California Avenue & Stockdale Highway, in the city.

Channel 23 reporter Erin Briscoe interviewed shoppers at the store, asking them what they thought about the various forms of preferred parking at the Fresh & Easy market. She also interviewed a law enforcement officer about enforcement of the reserved parking spots.

The opinions of the various shoppers, and law enforcement, are interesting and insightful, which is why we're sharing them with out readers.

Click here to view the video from last night's report on Bakersfield's Channel 23 News. There's also a brief write up about the report there.

[Readers: Feel free to offer your opinion about Tesco Fresh & Easy Neighborhood Market's reserved parking policy and the three types of preferential parking it offers: hybrid cars, parents with kids, and expectant moms. Just click the "comments" link below - and opine away.]

Tuesday, March 30, 2010

Tesco Set to Open 11 New Fresh & Easy Neighborhood Market Stores in April

Beginning in early 2008 (click here to read), Fresh & Easy Buzz began suggesting that Tesco's Fresh & Easy Neighborhood Market needed to start individualizing and localizing its stores, including the architectural design elements, based on the unique characteristics of the various and different communities where it locates its markets, rather than follow the cookie-cutter design approach it was doing. We stressed doing so is important in order to, among other things, create a sense of place for a food retailer and for store shoppers in a given community and neighborhood, particularly if the grocer uses "neighborhood" in its store name, like Fresh & Easy does.

In early 2009 Fresh & Easy started doing this with some of its new stores, such as its store at 603 South Lake Avenue in Pasadena, California (pictured at top), which opened on July 15, 2009, and its store in downtown Fresno, California (pictured below, note the localized mural), which we first wrote about here in July 2008, and which opened in January 2010. We like the individualized and localized design elements of both of the stores. (Double click on the photos if you want to view them in larger size.)

In this piece [Tesco's Fresh & Easy Set to Hit 150-Plus Store-Count Mark on April 7] yesterday we highlighted the fact that with the opening of four new Fresh & Easy Neighborhood Market stores next week, on Wednesday, April 7, Tesco would be achieving the milestone 150-plus store-count mark. (A total of 152 Fresh & Easy markets open on April 7.)

We also discussed in the piece how since January of this year Tesco's Fresh & Easy has been aggressively opening many of the numerous stores it's had completed but sitting unopened for some time in Southern and Central California, Southern Nevada and Metropolitan Phoenix, Arizona.

Today, the fresh foods and grocery chain said it will open seven more stores in April, in addition to the four already set to open on April 7, for a total of 11 new stores opening in April 2010.

The seven new stores, their opening dates and locations are:

Opening on April 14, 2010

>Calle Tampico & Desert Club
78-130 Calle Tampico
La Quinta, (Southern) California

>Highway 46 & Griffith
1304 Highway 46
Wasco, California (Central Valley near Bakersfield)

>Hayden & Thomas
7901 East Thomas Road
Scottsdale, Arizona

>40th Street & Camelback Road
3933 East Camelback Road
Phoenix, Arizona

Opening on April 21, 2010

>H & Planz
1801 Planz Road
Bakersfield, California

>Brimhall & Jewetta
11200 Brimhall Road
Bakersfield, California

>Camelback Road & 83rd Avenue
8365 West Camelback Road
Phoenix, Arizona

The locations of the Four Fresh & Easy stores opening on April 7 are here.

Critical Mass in Bakersfield Market

The major news here, in addition to the big 11 store opening itself, is that Tesco is opening three new Fresh & Easy stores in the Bakersfield, California market, in California's southern Central Valley, in April.

The grocer currently has just four out of a currently confirmed nine Fresh & Easy stores in the market opened to date. The three new stores in the market will bring that to seven out of nine confirmed stores open by the end of April.

Below are the nine Bakersfield market region store locations confirmed to date by Tesco's Fresh & Easy. The four currently opened stores are in green. The three stores opening in April are in red. The two stores in regular black font remain to be opened.

>Panama Lane and Stine Road
>Olive Drive and Jewetta Avenue
>California Ave. & Stockdale Hwy, Bakersfield
>Buena Vista Rd. & White Lane, Bakersfield
>Coffee Rd. & Hageman Rd., Bakersfield
>H St. & Planz Rd., Bakersfield
>Brimhall Rd & Jewetta Ave, Bakersfield
>Cecil Ave. & High St., Delano
>Hwy 46 & Griffith Ave., Wasco

The first two Fresh & Easy opened in the Bakersfield market in December 2008, as we reported in this December 3, 2008 piece: Tesco Opens its First Two California Fresh & Easy Stores Outside of Southern California in the Central Valley City of Bakersfield Today.

Tesco didn't open its third Bakersfield region Fresh & Easy market until late February 2009.[February 11, 2009: Tesco to Open Third Bakersfield, California Fresh & Easy Store On February 25.]

The fourth store in the market, in Delano, opened on August 19, 2009.

Opening the additional three stores in April will give Fresh & Easy some added critical mass, which in addition to having more stores in general, can payoff for a grocer in terms of getting more bang for its marketing and promotional dollars spent in a regional market like Bakersfield, where to date it only has just the four stores open.

Opening big

With 11 new stores opening, April will be the most aggressive new store opening month for Fresh & Easy this year. In fact, it's close to a record number of new store openings in a single month for the grocer since it started opening the fresh foods and grocery markets in November 2007.

In February 2010 Tesco opened nine new Fresh & Easy markets - far from a slacker new store opening month in itself.

Tesco's Fresh & Easy by the (store-count) numbers

By the numbers: As of today there are 148 Fresh & Easy stores. On April 7, when four new stores open, Tesco will hit its 150 store milestone-plus two, for 152 stores. At the end of April, Fresh & Easy's store count will stand at 159 stores in California (Southern and Central), Southern Nevada and Metropolitan Phoenix, Arizona.

Closing (success) bigger

The 159 stores at the end of April will be about 41 stores short of where Tesco originally planned to be by the end of 2009. However, opening 159 stores in about 29 months (the first Fresh & Easy stores opened in November 2007) is still a rather impressive logistical achievement for any grocer, despite their original strategic plan.

Of course, opening the stores is only half the battle. And like the veteran salesmen advises his young sales reps: 'It's good to open big - but you've got to close even bigger.'

[Photo credit: Fresh & Easy Neighborhood Market]

Wednesday, February 11, 2009

Tesco's Fresh & Easy Isn't the Only Food & Grocery Retailer With its Eyes on Bakersfield: Wal-Mart's Bakersfield Push and Central Valley, CA Strategy

California's Central Valley region (detailed in the map of California above), stretching from Bakersfield and Kern County in the south to Stockton and San Joaquin County in the north, is the largest single-producing and most diverse -- cotton, grains, fruits, vegetables, nuts, milk, beef cattle, chickens, eggs and more -- agricultural region in the world. Additionally, one fourth of all the food produced in the U.S. comes from the Central Valley region, which also is home to such well-known global companies and brands as E.J. Gallo (Modesto, CA), the largest family-owned winery in the world, and the second-largest overall seller of wine globally.

The Central Valley is a diverse region as well. Kern County (Bakersfield area) is one of the top oil producing regions in America, for example, in addition to being a major agricultural region, as well as being considered by many to be the second home of American country music after Nashville, Tennessee. And when it comes to college sports, the Fresno State University Bulldogs are among the top college football teams in the nation. Stockton, in the north, was in the 1930's -through- 1960's one of the centers for both amateur and profesional boxing in America. So much so in fact that the famous boxing movie, "Fat City" was set in Stockton.

The Central Valley also is home to a few famous brands when it comes to individual celebrities. For example, famed movie director and producer George Lucas was born and raised in Modesto, which was the setting of his award-winning movie "American Graffiti." The late Pulitzer Prize winning writer and playright William Soroyan (author of The Time of Your Life and numerous other plays and books) is from Fresno, and country music greats Merle Haggard and Buck Owens hail from Bakersfield, which often is called "Nashville-West" for its fame in country music circles.

Bakersfield and Beyond:
Central Valley, California Market Region Report and Analysis

Earlier today we reported that Tesco will open its third and newest Fresh & Easy Neighborhood Market combination grocery and fresh foods market in Bakersfield, California on February 25. [Read that post here: Tesco to Open Third Bakersfield, California Fresh & Easy Store On February 25.]

The new store is one of nine Fresh & Easy units planned thus far by the grocer for the Bakersfield Metropolitan market region, which is in California's southern Central Valley. The first two Fresh & Easy markets opened on the same day in Bakersfield on December 3, 2008. [December 3, 2008: Tesco Opens its First Two California Fresh & Easy Stores Outside of Southern California in the Central Valley City of Bakersfield Today.] Seven of the nine Fresh & Easy stores are located in the city of Bakersfield. One is planned for nearby Wasco, and the other for the nearby city of Delano.

Wal-Mart's Bakersfield market region push

Tesco's entry into the Bakersfield Market region is going to add new competition into the region which has an economy based primarily on agriculture, oil production and increasingly on service businesses. [May 24, 2008: Upcoming New Markets Special Report: The Changing 'Face' of Retailing in Bakersfield, California.] [March 10, 2008: Bakersfield, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade.] [May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California.]

But Tesco isn't the only food and grocery retailer looking to add a new competitive retailing element in the Bakersfield market. Bentonville, Arkansas-based mega-retailer Wal-Mart Stores, Inc. also is targeting the Bakersfield market region aggressively, and plans to soon open its first Supercenters in the city of Bakersfield and in the region.

Wal-Mart currently operates three of its Wal-Mart discount format stores in Bakersfield. But has none of its combination food, grocery and general merchandise mega-Supercenters in the city -- yet.

The Wal-Mart discount format stores, at well over 100,000 square feet, sell only a limited assortment of food and grocery items and consumer packaged goods, mostly shelf-stable products, but also some perishables in the refrigerated and frozen foods categories. Additionally, unlike the Supercenters, the discount format stores don't offer fresh produce, fresh meats or in-store deli and bakery departments, as well as not offering a full supermarket-like selection of food and grocery items.

But Wal-Mart is out to change that in the Bakersfield market -- and beyond in the Central Valley.

Here is what we know based on our research:

>First, just last week the Bakersfield Planning Commission approved a request by Wal-Mart to remodel and add an additional 46,000 square feet to its Wal-Mart discount store (one of the three in the city) in northeast Bakersfield at 2701 Fashion Place, turning the store into one of the retailer's hybrid Supercenters, as we call them. All of the new, additional 46,000 square feet, along with some added space from the store remodeling, will be devoted to food and grocery, including fresh produce, meats, an in-store deli and bakery. The additional square footage will come from Wal-Mart's taking over an empty building next door that used to be a Vons supermarket, operated by Safeway Stores, Inc. before it was closed by the supermarket chain.

The Bakersfield City Council must vote in favor of the planning commission's approval. But a vote in favor of the project by the city council going forward looks likely, according to members of the Bakersfield Planning Commission.

>Second, Wal-Mart is looking to try to add additional square footage in a similar way to its other two Wal-Mart discount format stores in Bakersfield, using the added space to include a full supermarket inside and create a hybrid Supercenter like its doing with the northeast Bakersfield store.

Wal-Mart is converting existing discount format stores into these hybrid Supercenters throughout the U.S. For example, the retailer is in the process of converting 30 or more of its Wal-Mart discount stores stores in Southern California into the hybrid Supercenter format so that it can offer a full selection of food and grocery products for sale in the units, as we've previously reported and written about. [September 15, 2008: Wal-Mart Expanding its Discount Store-to-Supercenter Conversion Program As Part of its Strategy to Grab Even More Food and Grocery Sales Market Share.]

As we've also previously reported, Wal-Mart is using the hybrid Supercenter conversion process throughout the Central Valley, not just in Bakersfield. For example, the retailer plans to convert an exiting Wal-Mart discount store in Los Banos, California (Merced County) into a hybrid Supercenter that will offer a full range of food and grocery products, and is looking to do the same with a dicount format store in Merced and another in Turlock (Stanislaus County) if it can find the added space in the respective shopping centers to do so, and get approvals from the respective cities for the conversions, if the additional square footage can be found. [Click here to read a selection of past stories about the hybrid Supercenters and related Wal-Mart topics.]

In the fall of 2008 Wal-Mart opened its first "hybrid" Supercenter, located in a vacant big box building that it completely gutted and remodeled, on McHenry Avenue in the Central Valley city of Modesto, which is in Stanislaus County, about 10 miles from Turlock, 35 miles from Merced, and about 45 miles from Los Banos.

Wal-Mart took the about 100,000 square foot vacant building that used to house a warehouse format supermarket in one half and a drug store in the other, gutted it, then remodeled it into the 100,000 square foot combination food, grocery and general merchandise hybrid Supercenter. [April 25, 2008: Going Smaller: Wal-Mart Might have Found A Solution or Two to Much of the Opposition to its Mega-Supercenter Stores in the USA]

At 100,000 square feet the store is nearly half the size of the average Wal-Mart Supercenter, which are about 180,000 square feet and often larger. As an example, Wal-Mart is building a brand new Supercenter in Ceres, which is right next door to Modesto. That store is about 215,000 square feet.

>Third, Wal-Mart has had a partially built new combination food, grocery and general merchandise Supercenter sitting at a site at Panama Lane and Highway 99 in Bakersfield for about five years. Wal-Mart started construction of the store in 2003-2004 and then was hit with a series of lawsuits from environmental groups over various environmental aspects related to the store location. In late January (last month) the Bakersfield Planning Commission and Wal-Mart said those lawsuits have been resolved. Wal-Mart further announced two weeks ago that it is preparing to resume construction on the site and hopes to have the Supercenter completed in time to open in the fall of this year.

>Fourth, Wal-Mart has another site approved to build a new Supercenter at in Bakersfield. That site in on Gosford Road in the city. It was approved in 2002, just like the Panama Lane and Highway 99 site was. Wal-Mart decided not to start construction at the Gosford Road location because of the lawsuits filed against the Panama Road project. Now that the retailer has resolved those lawsuits and is completing construction on the Panama Road Supercenter, it's likely it will soon move forward with the start of construction on the approved site on Gosford Road.

>Fifth, Wal-Mart also is proposing building a Supercenter at a site in Delano, which is close to Bakersfield in the market region, and is where Tesco also plans to open a Fresh & Easy market. The city of Delano has approved the project and supports the hundreds of new jobs and added retail sales tax revenue the new Supercenter coming to down would bring. Delano is a rural city and the average income of is residents is at the very low end.

A citizen's group in Delano though is against the project and has filed a lawsuit against its going forward. The group says the Wal-Mart Supercenter will hurt and drive out local small businesses who can't compete against mega-Wal-Mart. Wal-Mart runs into such opposition with nearly every Supercenter it proposes in California, although in this current bad economy numerous California cities that in the past didn't want anything to do with a Wal-Mart Supercenter are now looking much more favorably on the prospect of the retailer bringing one to their respective town.

This Friday a court in Bakersfield will hear the Delano group's lawsuit against the Wal-Mart Supercenter going in their city. The judge will rule on the lawsuit following the hearings.

We're told it's likely Wal-Mart, and the city of Delano, will prevail in winning the lawsuit and getting the Supercenter in Delano built.

>Lastly, in addition to hoping it can find the additional space, and if it does to gain approval from the city of Bakersfield to expand and remodel its other two Bakersfield Wal-Mart discount format stores into hybrid combination food, grocery and general merchandise Supercenters, the retailer is looking for additional new Supercenter sites in and around Bakersfield as part of its strategy to become a serious player in food and grocery retailing in the region.

Wal-Mart's Central Valley strategy

Wal-Mart's plans to aggressively convert discount format stores into hybrid Supercenters and to open new Supercenters in the Bakersfield region of the Central Valley isn't an isolated strategy. Rather it's part of the retailer's overall strategic plan to become a major player in food and grocery retailing throughout the Central Valley -- from Bakersfield in the far southern end of the vast valley, and Fresno and Merced County in the middle of the region, to Stanislaus County and San Joaquin County in the Northern Central/San Joaquin Valley. Nearly 5 million people live in the Central Valley, from Bakersfield north to Stockton in San Joaquin County

The key to Wal-Mart's Central Valley strategy is its proposal to open a big, new distribution facility in the city of Merced, the county seat of Merced County. Wal-Mart submitted plans for the new 500,000 -to- 600,000 square foot facility early last year.

The proposal has been making its way through the various local government agencies responsible for approval. There has been objections to the huge facility from a number of groups in the region, and Wal-Mart has made some changes to its original proposal because of those objections. The objections center around environmental impacts like traffic congestion and other related issues.

Last year it looked like the proposed new Wal-Mart distribution center in Merced might not gain approval. However, according to sources in the region, the economic recession has changed that. Merced County has one of the highest housing foreclosure percentages of any county in the U.S., at times being number one, and one of the highest unemployment rates in the country at its current whopping 16%, which is almost twice the rate of the state of California (9.4%). The region is bleeding jobs and the Wal-Mart distribution center, which would bring hundreds of badly needed jobs to the area, now looks like it will soon gain approval, we are told.

With the new Merced distribution center, Wal-Mart will be able to supply fresh foods, grocery products and other goods without a hitch to basically all of the new and hybrid Supercenters and other format stores it wants to remodel and build in the Central Valley -- south to Bakersfield and Fresno and north to Stanislaus County and San Joaquin County, as well as up into the Sacramento region and even into the nearby San Francisco Bay Area -- where the retailer has a near-zero presence and wants to open many new stores, including Supercenters, if it can gain approval of them by Bay Area cities and counties, something the retailer has found near-impossible to do to in the past with its Supercenters because of so much opposition to the mega-big box stores. (That's one reason the retailer created its small-format Marketside grocery and fresh foods stores as an alternative food and grocery retailing format to help Wal-Mart increase market share in such difficult to enter with Supercenter markets.)

As we mentioned earlier in this piece, Wal-Mart opened its first Supercenter in Modesto in November of last year -- the 100,000 square foot hybrid store in the vacant big box retail building. The retailer also has a discount format store in the city it would like to convert into a hybrid Supercenter if it can find the the space next to the existing store to add the additional square footage. Wal-Mart also is looking for other vacant big box buildings in other parts of Modesto where it can create a hybrid Supercenter like it did with the one on McHenry Avenue in the city that opened in the fall of 2008. [Related story - November 21, 2008: Breaking News: Wal-Mart Stores, Inc. Names New CEO to Replace Lee Scott; USA Chief Castro-Wright Elevated to Vice Chairman Effective Immediatley.]

The retailer previously tried to gain approval for a new, built from the ground-up Supercenter in Modesto a number of years earlier, but met objection from the city and various community groups. That's why it went with the hybrid Supercenter in the vacant building concept instead.

Fresh & Easy Buzz has identified and reported on two locations thus far Tesco's Fresh & Easy has leased for planned stores in Modesto. [Those reports are here and here.] Tesco hasn't publicly announced or confirmed the Modesto locations as of yet.

The process of putting a store in a vacant building like Wal-Mart did in Modesto doesn't require the same extensive approval and environmental impact process that building a Supercenter from the ground up does in the city and in most California cities. As a result, even though there were groups opposed to the Modesto store, they couldn't stop Wal-Mart because like any other retailer its able to convert an existing vacant building into what they want it to be without an elaborate planning process like with new store construction, and particularly like new big box store construction. Instead Wal-Mart just needed to meet the essentially simple approval process for remodeling a vacant store building in Modesto, just as all other retailers are required to do.

As we also mentioned earlier in this piece, Wal-Mart is building a huge, new Supercenter (over 200,000 square feet) in Ceres, which is on Modesto's southern border. The two cities basically run into one another. That store is set to open sometime this year. The store was supported by the city of Ceres and met with little opposition from members of the community, with the exception of some traffic issues that were resolved by Wal-Mart and the city. [Related story - November 19, 2008: Competitor News: Wal-Mart Lowering Prices on Holiday Items and Staples; New Formats Coming; Online Grocery Sales; Hundreds of New Stores FY 2009-2010.]

Wal-Mart also has applied to build a brand new 158,000 square foot Supercenter in the Stanislaus County city of Patterson. Patterson, which has about 35,000 residents, is located about 20 miles from Modesto on the county's west side. The proposed Supercenter is right across the street from an existing Save Mart supermarket, operated by Modesto-based Save Mart Stores, Inc., which is the market share leader in the region.

Additionally, Wal-Mart plans to turn its existing discount format store in the city of Los Banos (Merced County) into a hybrid Supercenter. We're told the city of Los Banos has no objection to that since the city of about 30,000 is understored in terms of supermarkets, having only one major supermarket, a branch of Modesto, California-based Save Mart, curently operating in town. There's also an independent supermarket in Los Banos, but it is an older and fairly small store. Los Banos is located about 20 miles from Merced, where Wal-Mart hopes to open its new Central Valley distribution center.

Further, Wal-Mart building a new Supercenter in the Merced County city of Livingston, which is a small city of about 20,000 people located just a few miles from Merced. That store will serve a much larger population base than just the residents of the Livingston though because numerous people live in the nearby unincorporated parts of rather rural and agriculture-based Merced County, in addition to living in the county's incorporated cities. It's also expected that residents of other towns just a few miles away will shop at the Livingston Supercenter when it opens.

Merced County has a current population of about 260,000 residents. Merced is the largest city in the county with about 80,000 residents. Next door Stanislaus County, of which Modesto (about 205,000 population) is the county seat, has a population of about 560,000. The two counties are right next to each other in one geographical block.

Merced is only about 40 miles from Fresno, where Wal-Mart has been opening up numerous new Supercenters and has plans to open more. The Fresno Metropolitan region has a population of over 1 million people, and has been one of the fastest-growing regions in California, as have Merced and Stanislaus Counties, until the housing foreclosure crisis and recession hit.

If it can gain approval, Wal-Mart wants to open numerous build new Supercenters and create hybrids, in some cases adding on to existing discount format stores and in other cases putting hybrid Supercenters in remodeled vacant big box buildings like the one on McHenry Avenue in Modesto, throughout the Central Valley. It will be able to do so aggressively once it gets the Merced distribution center open, which it wants to do no later than 2010.

Tesco's Fresh & Easy in the Central Valley

In addition to the two Fresh & Easy Neighborhood market combination grocery and fresh foods stores already opened in the city of Bakersfield and the other seven planned for the market region, and the Modesto stores we've discovered and reported on, the retailer has leased numerous sites in Fresno and the Fresno Metropolitan regions where it is either building or converting vacant buildings into Fresh & Easy markets it plans on opening in the near future.

Tesco plans to eventually open and operate Fresh & Easy stores throughout the Central Valley and Northern California, from Bakersfield in the south to the Northern San Joaquin Valley, and into the Sacramento Valley region and San Francisco Bay Area, as we've previously reported on and written about extensively in Fresh & Easy Buzz.

The retailer continues work on a number of its Fresno region stores but no opening dates have been announced. Work has yet to begin on the two Modesto sites, both set to be stores located in vacant buildings that formerly housed supermarkets.

Additionally, as we reported here, Tesco has postponed its Northern California launch, the first stores of which it originally planned to start opening in 2008, then changed to early 2009, and now has postponed indefinately.

California's Great Central Valley, as its often called, is suffering significantly in the current recession with high unemployment, massive housing foreclosures, growing poverty and other serious economic probelms. That's actually a good perscription for Wal-Mart's brand of discount retailing, which is why the retailer is moving forward with its strategic growth plan throughout the region.

The region also offers opportunity for Tesco's Fresh & Easy if it focuses its merchandising on creating a solid, comprehensive value proposition and communicates it well in the Central Valley, rather than one week positioning itself as a discount grocer, then the next week as a specialty foods market, and the third week as a prepared foods market that also happens to be an environmentally-friendly-focused grocery chain, as in our analysis it has been doing since it opened the first stores in November, 2007. There are some signs Tesco's Fresh & Easy is taking our advice though and starting to better create, develop and communicate a solid value proposition. It's far from being there yet though.

All those things are fine -- selling specialty foods and prepared foods and being a "green" grocer. But they need to be additions to the overall discount grocer value proposition, which should be Fresh & Easy's hub on the wheel of food retailing, with all the other aspects of its merchandising being the spokes on that wheel.

If Tesco does that with Fresh & Easy in the meat and potatoes Central Valley -- focuses on being a discount food and grocery retailer with a solid value proposition first, with all else coming after -- it stands a chance of doing well in the region, in our analysis. If it doesn't, or fails in trying, things are going to be very difficult, paticularly with Wal-Mart now joining the already competitive Central Valley food and grocery retailing market in a big way.

Tesco to Open Third Bakersfield, California Fresh & Easy Store On February 25

Bakersfield, California Market Region Report

Tesco's Fresh & Easy Neighborhood Market is preparing to open its third combination grocery and fresh foods market in Bakersfield, in California's south Central Valley region, Fresh & Easy Buzz has learned.

The new and third Fresh & Easy store in the city, located in a shopping center at 5190 Stockdale Highway in Bakersfield, will open on February 25.

Bakersfield is Tesco Fresh & Easy's newest market region. It's also the farthest north in California that the grocer has come to date from its base in Southern California.

Tesco's Fresh & Easy opened its first two stores in Bakersfield (and in the south Central Valley region) on December 3, 2008. Those two stores are located at Panama Lane and Stine Road, and Olive Drive and Jewetta Avenue. [Read our story about the two stores opening at this link: Tesco Opens its First Two California Fresh & Easy Stores Outside of Southern California in the Central Valley City of Bakersfield Today.]

Thus far, Tesco plans to open nine of its small-format, combination grocery and fresh foods Fresh & Easy markets in the Bakersfield, California region, according to the company and to our reporting. Those locations are:

>Panama Lane and Stine Road
>Olive Drive and Jewetta Avenue
>California Ave. & Stockdale Hwy, Bakersfield
>Buena Vista Rd. & White Lane, Bakersfield
>Coffee Rd. & Hageman Rd., Bakersfield
>H St. & Planz Rd., Bakersfield
>Brimhall Rd & Jewetta Ave, Bakersfield
>Cecil Ave. & High St., Delano
>Hwy 46 & Griffith Ave., Wasco


The top two Fresh & Easy store locations in the list above are the two stores that opened on December 3, 2008. The third location is the store opening on February 25. Delano and Wasco are cities located near Bakersfield.

Related posts from Fresh & Easy Buzz:

>Upcoming New Markets News: Tesco's Fresh & Easy Confirms Bakersfield, CA Stores; Says First Two Will Open Next Month on December 3rd, 2008

>March 10, 2008: Bakersfield, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade

>May 24, 2008: Upcoming New Markets Special Report: The Changing 'Face' of Retailing in Bakersfield, California

>May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California

>March 26, 2008: Mid-Week Tesco Fresh & Easy Roundup

[Note: The stories linked above contain extensive information on the Bakersfield Metropolitan region in general and the Bakersfield region food and grocery retailing market specifically.]

Wednesday, December 3, 2008

Tesco Opens its First Two California Fresh & Easy Stores Outside of Southern California in the Central Valley City of Bakersfield Today


New Markets News: California's Central Valley - Bakersfield

Tesco opened its first two Fresh & Easy markets in California located outside of the Southern California market region today in the Central Valley city of Bakersfield in Kern County.

The two stores, one at Olive Drive and Jewetta Avenue in northwest Bakersfield and the other at Panama Lane and Stine Road in the city, opened early this morning with a grand opening celebration hosted by Fresh & Easy Neighborhood Market CEO Tim Mason and the Mayor of Bakersfield, Harvey Hall, among others.

CEO Mason greated shoppers at the Olive Drive and Jewetta Fresh & Easy with a "Let's go shopping" greating as the doors opened this morning, according to people in attendance we talked with today.

Fresh & Easy Neighborhood Market chief marketing officer Simon Uwins also was in attendance at the Bakersfield store grand openings this morning, along with other company executives.

Bakersfield is a new and different California market region for Tesco with its small-format, convenience-oriented Fresh & Easy combination grocery and fresh foods markets.

Unlike Southern California, where Fresh & Easy is headquartered and has about half of its about 104 markets, Kern County is a primarily agricultural-based region, along with being one of the top oil producing areas in the United States.

Average incomes are lower in Kern County than in Southern California, and with a few exceptions, like Orange County, the people of the Bakersfield region are much more socially and politically conservative than the residents of Southern California are. Post-high school educational levels also are lower overall in Kern County and elsewhere in the Central Valley than they are in Southern California.

Food and grocery prices also are lower overall in Kern County and in California's Central Valley than they are in Southern California. And even in good economic times, Kern County consumers, who tend to be far more meat and potatoes than they are ahi tuna and arugula, expect a deal at the grocery store.

As a result, it will be intereting to observe how Tesco's Fresh & Easy does in the new market, particularly since to date the retailer has been emphasising its specialty foods side far more than it value-based grocery side, in our analysis. Value is key in the Central Valley.

The two Fresh & Easy markets that opened today in Bakersfield are the first of nine stores Tesco has planned for Kern County thus far. An additional five of those stores will be located in Bakersfield, for a total of seven in the city thus far. The other two Fresh & Easy markets are set for the nearby Kern County cities of Wasco and Delano, both of which are fairly rural towns.
Bakersfield is the county seat, with a current population of about 330,000. Kern County's population is about 650,000.

The additional seven Fresh & Easy locations in Kern County thus far are:

>Buena Vista Rd. & White Lane, Bakersfield
>California Ave. & Stockdale Hwy, Bakersfield
>Coffee Rd. & Hageman Rd., Bakersfield
>H St. & Planz Rd., Bakersfield
>Brimhall Rd & Jewetta Ave, Bakersfield
>Cecil Ave. & High St., Delano
>Hwy 46 & Griffith Ave., Wasco

Fresh & Easy emphasised a bit of local marketing this morning at the grand opening of the two Bakersfield stores, something Fresh & Easy Buzz has been saying since early this year the retailer needs to focus on and emphasis more.

As part of its grand opening promotions, the stores featured Grimmway Farms brand fresh carrots. Grimmway Farms is based in Kern County, and the company's vice president of marketing, Phil Gruszka, attending the Bakersfield store grand openings this morning.

Grimmway Farms supplies all of the carrots to Tesco's Fresh & Easy. And of course, when it comes to fresh produce, much of it comes from California anyway, so local is as local does. However, we think it smart for Fresh & Easy to take advantage of local producers this way -- something it should do more of and do so in a more strategic and customized way, as we've said often in the Blog.

The Grimm brothers, who were actually far from grim, according to people who knew them, began their family business in Kern County more than three decades ago. Today, Grimmway Farms has grown to become the largest grower, producer and shipper of carrots in the world. The Grimm family still owns and manages the company.

This morning during grand opening ceremonies, Fresh & Easy Neighborhood Market CEO Tim mason said: We're opening a store a week, depending on how the economy goes," adding the company is taking a flexible approach because "the world is in a different place." By that MR. Mason is referring to his recent announcement that Fresh & Easy is cutting back the rapid pace of its new store openings, including postponing its launch into Northern California, because of the current recession and financial crisis.

Opening a store a week is about half of what the grocery chain has been doing since the first batch of stores opened in November, 2007. Based on our analysis Tesco's Fresh & Easy has averaged a new store opening about every three days overall since November, 2007.

Opening about one new store a week works out roughly to what Tesco plc. CEO Sir Terry Leahy said yesterday in a company-produced Q&A-style video broadcast over the Tesco Web site as part of the United Kingdom-based retail chain's third quarter sales reporting.

Yesterday, CEO Leahy said the company would open 500,000 square feet of new Fresh & Easy retail space (stores) over the next year. That works out to about 40-50 new Fresh & Easy stores, since the markets average 10,000 -to- 13,000 square feet each in size. If the retailer opens one new Fresh & Easy store a week from the rest of December, 2008 (taking the Christmas holiday into consideration) to the end of 2009, that would work out to about 50 new stores or so, right in Sir Terry Leahy's range as he described yesterday.

Based on our information, we believe the retailer will open all nine Kern County stores in 2009, plus about eight in Fresno, along with new stores currently in the pipeline in the existing markets of Southern California, Nevada and Arizona.

Since the Bakersfield and Fresno region stores would total 17 Fresh & Easy markets, and we know of at least 15 new stores in the current pipeline for Southern California, Nevada and Arizona, we wonder if any Fresh & Easy stores will open at all in Northern California? Do the math, 17 in Bakersfield and Fresno, about 15 so far in the three existing markets, which equals 32 new stores. That means about or fewer than 20 remaining stores for the 2009 500,000 square feet (or about 50 stores maximum) that Sir Terry Leahy said yesterday would be opened in 2009.

Of course those 20 stores, or more or less, could be opened in Northern California. However, we've identified 46 Fresh & Easy locations in Northern California thus far, 37 of which have been confirmed by Tesco's Fresh & Easy.

Additionally, the Fresh & Easy Northern California distribution center in Stockton, California is nowhere near being completed. Fresh & Easy Neighborhood Market CEO Tim Mason has said no Northern California stores will be open until it is completed.

From an operational, sales and performance standpoint, which just about covers everything, it is our analysis that Fresh & Easy isn't ready yet to launch into Northern California. Therefore if it does postpone its launch completely in 2009 we think that would be good for the grocery chain overall (especially its employees and Tesco stockholders), assuming it uses the resources and time saved from the expansion to improve same store sales performance in its current markets, to include Bakersfield and Fresno when it opens its stores there as well.

Meanwhile we will be paying close attention to how Fresh & Easy plays in Bakersfield, which in addition to being a major agricultural and oil producing region also is known as Nashville West for its country and western music scene and history of producing country music legends like Merle Haggard, Buck Owens and others. There's even what's known in country music as the "Bakersfield Sound."

It is in this regard we offer Tesco's Fresh & Easy some free local marketing and merchandising advise for the Bakersfield market region -- it would be an inexpensive, smart and savvy local marketing touch to play country and western music over the Bakersfield stores' music systems rather than rock, hip hop, classical, indie or other styles.

[Editor's note: The Bakersfield Californian newspaper, the major daily in the city, also covered the Fresh & Easy store grand openings today. The story includes a number of photos of the stores. You can view the photographs and read the report here.]

Wednesday, November 5, 2008

Upcoming New Markets News: Tesco's Fresh & Easy Confirms Bakersfield, CA Stores; Says First Two Will Open Next Month on December 3rd, 2008

Upcoming New Markets News: Central Valley, California - Bakersfield

Tesco's Fresh & Easy Neighborhood Market announced today it will open the first of its thus far five confirmed stores in the Bakersfield, California Metropolitan region market on December 3, 2008, less than a month from today.

The two Fresh & Easy combination grocery and fresh foods markets set to open on December 3 will be in the city of Bakersfield. One store is at Olive Drive & Jewetta Avenue in the city, the other at Panama Lane & Stine Road.

Bakersfield is located in the southern portion of California's Central Valley

The two Bakersfield Fresh & Easy food and grocery markets will be the first California stores for the grocery chain outside of the Southern California market region.

Plans call for opening stores throughout the Central Valley, including the Fresno region north through Merced, Stanislaus, San Joaquin and Sacramento counties, and into the San Francisco Bay Area, as we reported and written about previously. [See the links at the bottom of this post for additional information.]

The other three confirmed Bakersfield Metropolitan region Fresh & Easy stores are at the following addresses in the following cities:

>Highway 46 & Griffith Avenue - Wasco, CA
>Brimhall Lane & Jewetta Avenue - Bakersfield, CA
>Cecil Avenue & High Street - Delano, CA

These three Fresh & Easy stores are set to open early next year.

Fresh & Easy Buzz first reported Tesco's Fresh & Easy would enter the Bakersfield region market and open stores there in this March 10, 2008 story: "Bakersfield, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade."

Below are the five Bakersfield Metropolitan region Fresh & Easy store locations we reported on over eight months ago:

>Olive Drive and Jewetta Avenue, Bakersfield
>Brimhall Road and Jewetta Avenue, Bakersfield
>Panama Lane and Stine Road, Bakersfield
>Cecil Avenue and High Street, Delano
>Highway 46 and Griffith Avenue, Wasco

As you can see, we got all five locations right in March.

Today is the first time Fresh & Easy Neighborhood Market has publicly confirmed the five Bakersfield stores.

We also reported in our March 10, 2008 piece that "The first of the initial six Bakersfield region Fresh & Easy grocery stores could open as early as the end of this year."

Reader Resources

Related Posts:

>March 10, 2008: Bakersfield, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade

>May 24, 2008: Upcoming New Markets Special Report: The Changing 'Face' of Retailing in Bakersfield, California

>May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California

>March 26, 2008: Mid-Week Tesco Fresh & Easy Roundup

[Note: The stories linked above contain extensive information on the Bakersfield Metropolitan region in general and the Bakersfield food and grocery retailing market specifically.]

Related Posts: Central Valley

>May 14, 2008: Fresh & Easy Buzz Exclusive: Tesco's Fresh & Easy Neighborhood Market Plans to Open Five Stores In the Fresno, California Metropolitan Region

>May 10, 2008: New Markets: Tesco's Fresh & Easy to Move Into Modesto, California Market; Open its First Store in the City Early Next Year

>March 8, 2008: Fresh & Easy Neighborhood Market Northern California DC Likely to Be At Arch Road Site In Stockton

Monday, March 10, 2008

Bakersfied, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade


Bakersfield, California, best known as once being one of the top oil-producing regions in the United States, along with being the boyhood home of famous country western singers Buck Owens and Merle Haggard, will be the next new region in California that Tesco's Fresh & Easy Neighborhood Market marches into, when it opens at least six of its small-format, convenience-oriented grocery stores in the region either at the end of this year or in early 2009.

Tesco, the world's third-largest retailer, plans to open three Fresh & Easy grocery markets in Bakersfield--two in the northwest portion of the city and one in the southwest side of town. The retailer also plans two open two stores in the nearby Bakersfield suburbs of Delano and Wasco. Bakersfield, Delano and Wasco are located in Kern County. [Kern County is shaded in light green in the map above. See San Joaquin Valley on the map key.]

These six stores are only the initially units Tesco has planned for the region. Our commercial real estate sources, along with a source in the local community, tell us the grocer is looking for additional sites in the area for its grocery stores, which merchandise a limited-assortment of Fresh & Easy store brand and national brand everyday groceries, along with specialty and natural foods, fresh produce and meats, an extensive selection of prepared foods, wines and craft beers, fresh flowers, and some non-foods' products.

Fresh & Easy grocery stores average 10,000 -to- 13,000 square feet. There currently are 59 of the stores in Southern California, Arizona and the Metro Las Vegas, Nevada region. The retailer plans to open many more stores in these three states, especially in California and Arizona. Based on statements from Tesco, we believe the retailer wants to have as many as 200 stores opened by mid 2009.

Additionally, Tesco has signed leases for an initial 18 Fresh & Easy stores in Northern California's San Francisco Bay Area and is negotiating for more store sites in that region. Further, the grocer has inked leases on 19 sites for its small-format grocery markets in the Sacramento region in Northern California. Tesco also is negotiating leases for additional grocery store sites in the Sacramento area, as well as in the Northern San Joaquin Valley cities of Stockton, Tracy, Manteca and Modesto.

Fresno, which is between Bakersfield and the Stockton/Modesto region, also is on the retailer's radar screen for Fresh & Easy store locations. As we reported here yesterday, Tesco will likely sign a lease for a Northern California distribution center on land in Stockton, California, which is about a 30 minute drive from Sacramento and an hour from San Francisco.

Tesco's initial Bakersfield region Fresh & Easy grocery markets will be at the following locations:

  • Olive Drive and Jewetta Avenue, Bakersfield
  • Brimhall Road and Jewetta Avenue, Bakersfield
  • Panama Lane and Stine Road, Bakersfield
  • Cecil Avenue and High Street, Delano
  • Highway 46 and Griffith Avenue, Wasco

The first of the initial six Bakersfield region Fresh & Easy grocery stores could open as early as the end of this year. However, it's more likely the stores will start opening in early 2009.

Most of these six stores will go into empty, existing commercial retail buildings in the region. This is a practice Tesco is employing for its Fresh & Easy stores. The retailer will locate a vacant (usually former supermarket or similar retail store) retail building, obtain a lease for it with generally favorable terms, and remodel the building to fit its 10,000 square foot -to- 13,000 square foot Fresh & Easy Neighborhood Market format. [Read a piece we did on this issue here.]

Not only does the grocer have a lower start-up cost by following this practice, versus building stores from the ground-up (although it is doing some of that), it also is able to go from lease to getting the store open and operating much faster, since the building shell and all its infrastructure is already in place, and Tesco has only to gut the interior, create a Fresh & Easy grocery store inside, and give the exterior a moderate remodel in order to create its Fresh & Easy store and retail brand.

Welcome to Bakersfield

Bakersfield is located in Kern County in the heart of California's Central Valley. It's about 110 miles from Los Angeles to the south and around 110 miles from Fresno to the north. The city's population is about 324,000, making it California's 11th most populous city. The Bakersfield Metropolitan region--which includes Delano and Wasco--has a population of about 780,000, which makes it the 65th largest metropolitan region in the United States.

The Bakersfield Metropolitan region has been fast-growing for the last few years. In fact, the city of Bakersfield is the 11th fastest-growing city in the U.S., according to data from the U.S. Census Bureau.

The city is actually more Midwestern USA than typical Californian in its culture, economy and political attitudes. The main sectors of the region's economy are: farming and agribusiness; the oil industry (petroleum extracting and refining); manufacturing, warehousing and trucking; and services, such as retail. Bakersfield also is home to a campus of the California State University system.

Bakersfield holds as a claim to its fame being the hometown of two famous country music legends, Merle Haggard and Buck Owens. both local country music stars made good have streets named after them in the city. And, Country Western is the music style of choice in Bakersfield. The city has dozens of country music venues (including a club owned by the family of the late Buck Owens), along with a number of professional recording studios. Bakersfield often is referred to as Nashville-West. The city also has a country music culture: you are more likely to see more people out at night wearing cowboy boots and hats than you are woman wearing stiletto high heels and men wearing suits and ties.

Politics in Bakersfield also is much more conservative than it is in the rest of California. The region has far more registered Republicans than it does Democrats. And, there are many more voters who describe themselves as conservative than in nearly every other part of California.

Politics is changing a bit in the region though. About 35% of the area's residents are Hispanic. Most of the region's Latino's are immigrants, thus immigration is a big issue for them. They tend to agree with Democrats more on the issue than they do with Republicans. As a result, the Democratic party is seeing an increase in party registration in the area, largely from Hispanics. African Americans comprise only about 5% of the area's population. Asian Americans are even less than that. Nearly 60% of Bakersfield population is white.

The region also is famous for its red-hot summers. It's not unusual for Bakersfield to have temperatures of 105 -to- 110 degrees for weeks at a time throughout the summer. Note to Fresh & Easy: You should make those Bakersfield region stores as energy efficient as possible. Also: look for higher than average air conditioning and other related bills from about May through September.

Analysis: Grocery retailing in Bakersfield

The Bakersfield grocery retailing market can best be described--like the region itself--as meat and potatoes. However, that doesn't suggest some of the region's key players--Safeway Stores, Inc-owned Von's, Modesto-based Save Mart, SuperValu-owned Albertsons and Save-A-Lot banner stores, Costco Wholesale, Kroger Co.-owned Food-4-Less and Foods Co., Smart and Final, Winco and Sam's Club--don't offer specialty, natural and organic groceries and produce, or prepared foods--because many of the them they do. There's also a Trader Joe's specialty grocery store in Bakersfield.

Rather, it just means you won't find scores of upscale, gourmet and natural foods stores in Bakersfield--Whole Foods Market, Gelson's, Bristol Farms, Raleys, Sprouts Farmers Market and others--like you do find in abundance in Southern and Northern California.

In particular, Safeway's Vons', offers good selections of specialty, natural and organic foods and grocery products in its stores, especially in its newer or remodeled stores, which have or are being converted to Safeway's upscale Lifestyle format. And, of course, Costco Wholesale is a major merchandiser of specialty and natural grocery products at reasonable prices. Some of the newer Save Mart banner stores (Save Mart also has Food Maxx warehouse stores in the region) also have good offerings of specialty, natural and organic products.

What all the above mentioned food retailers really do bring to the Bakersfield region though is heavy competition, especially on basic, everyday grocery products offered at a low-price. Costco, Save Mart's Food Maxx, Kroger's Food-4-Less and Foods Co, Winco, Wal-Mart's Sam's Club, and SuperValu, Inc.'s Save-A Lot are all no frills' warehouse-style, discount grocery stores. Price is king at these outlets.

Safeway's Vons, Save Mart's Save Mart banner supermarkets, and SuperValu, Inc.'s Albertsons, banner all focus on the lowest possible prices in their stores as well in the market because of this price pressure (even though two of the three retailers own both warehouse stores and supermarket banners) exerted by the highly competitive warehouse format sector.

In fact, the market share differences between Save Mart, SuperValu, Kroger Co.'s Food-4-less and Foods Co. and Safeway Stores, Inc.'s Vons is so close as to make the numbers near meaningless. Costco isn't far behind either.

Since half of Tesco's Fresh & Easy small-format grocery stores' business comes from selling basic groceries at low prices, the retailer will find a very competitive environment in Bakersfield in the low-price positioning sector when it opens it first stores there at the end of this year or in 2009.

Fresh & Easy's other offerings--prepared foods, specialty, natural and organic groceries, wines and craft beers, might find a less competitive market. However, both Vons and Albertsons are kicking-up both their specialty, natural and organic grocery selections (fresh produce too) in their respective region stores, as is Save Mart in its Save Mart banner stores.

In fact, because these grocers' stores are so much bigger than a Fresh & Easy Neighborhood Market store--they average 40,000 square feet -to- 65,000 square feet, compared to Fresh & Easy's approximate 10,000 square feet--most already merchandise a greater selection of specialty, natural and organic foods (including produce) than a normal Fresh & Easy grocery market does in general.

Rather than in the city of Bakersfield itself, Tesco's biggest opportunity with its small-format Fresh & Easy stores, might be in the surrounding smaller communities, such as Delano and Wasco. Many of these cities have populations ranging from 15,000 -to- 40,000 but have few grocery stores in them, especially those offering both basic groceries and more upscale offerings like prepared foods. This strategy--locating more stores outside Bakersfield in these smaller cities rather than in the city--might prove more successful to Tesco in our analysis.

Bakersfield is growing, not just in population but in food sophistication as well. So the timing could be good for Tesco, especially in relation to the fresh, prepared foods and other specialty-oriented product selections sold in the Fresh & Easy stores.

Of course, this growth in the Bakersfield region hasn't only been noticed by Tesco. Our sources tell us Whole Foods Market, Inc. is considering locating a supernatural lifestyle store in the city, and that Trader Joe's is considering opening an additional specialty market in the area as well. Vons, Albertsons and Save Mart also are upgrading their supermarkets, and specialty product selections--including prepared foods--in Bakersfield.

In other words, Tesco's Fresh & Easy Neighborhood Market could take some share away from these established retailers in the region. But its impending arrival also could spur these grocers on to prepare a very competitive welcoming for the United Kingdom-based retailer's small-format, convenience-oriented Fresh & Easy grocery stores come early next year.