Tesco's Fresh & Easy Neighborhood Market has decided it needs to better communicate its brand, along with its small-format, combination grocery and fresh foods stores in general, to Hispanic consumers in Southern California, southern Nevada and the Metropolitan Phoenix, Arizona region -- which are three of the regions with the highest percentage of Hispanic consumers in the U.S. -- where its 100-plus stores are located.
To this end, Fresh & Easy has retained the Los Angeles-based public relations firm RLPR + Marketing, which specializes in the Hispanic or Latino market, to handle marketing related and other forms of communications and publicity outreach to Latino consumers via the Hispanic media in these three Western U.S. markets, Fresh & Easy Buzz has learned.
The Los Angeles-based Latino market-focused public relations firm was retained by Fresh & Easy in late 2008. The firm's major focus for Fresh & Easy begins this month though.
RLPR does not replace Fresh & Easy's public relations firm of record, APCO Worldwide. APCO Worldwide employee Brendan Wonnacott serves as the corporate spokesperson for Tesco's Fresh & Easy Neighborhood Market USA and the firm handles general PR and marketing communications for the grocery chain.
Rather, RLPR's mission for Tesco is to better position and communicate the Fresh & Easy grocery and fresh foods chain among Hispanic consumers through media relations efforts targeting the Hispanic media, as well as through special events and others forms of marketing communications.
PLPR, which also has an office in New York, bills itself as an 100% Hispanic and woman-owned firm.
The firm's focus is on the fast-growing Latino consumer market. It was started in 1996 by then 25-year old Roxana Lissa, who began with one employee, herself, and an office in her Southern California home. Since then, RLPR has grown to become one of the largest independent Hispanic PR firms in the U.S.
Among the clients RLPR currently does work for include consumer package goods company General Mills, Dutch beer giant Heineken, the national honey board, and others.
Fresh & Easy Buzz is aware of the work of RLPR. In terms of choosing a PR firm focused on the Latino market, it's a good choice for Fresh & Easy, or for any other company for that matter. The firm is creative and has a strong track record.
Merchandising-Operations: 'Si, se puede! for Fresh & Easy doubtful
The problem with Tesco's Fresh & Easy vis-a-vis the Hispanic consumer base, which comprises about 30-40% of the total population in Southern California and Arizona, isn't a PR or marketing issue. Instead it's a merchandising issue.
The Fresh & Easy grocery and fresh foods markets just aren't very Latino-consumer friendly. And in Southern California and Arizona in particular, there are numerous grocery retailers that specialize in Hispanic consumers specifically. And even chains such as Safeway and Ralph's have neighborhood marketing programs in which they focus stores in neighborhoods with high Latino populations on the Hispanic consumer.
Fresh & Easy has miles to go before it can compete with these retailers for the Hispanic food and grocery dollar. It's all about merchandising and very little about marketing or PR.
For example, nearly 100% of the fresh produce in Tesco's Fresh & Easy stores is pre-packaged. Study-after-study conducted in the Western U.S. market over the last 15 years has shown that Hispanic consumers prefer bulk produce far and away over pre-packaged. Can you recall the last Hispanic-focused supermarket you've been in that had even 25% of its fresh produce pre-packaged in bags and plastic tubs like Fresh & Easy stores do, for example?
In surveys Latino shoppers site and abundance of fresh, bulk produce and an extensive selection of fresh meats and fresh fish as the two most important categories they consider when choosing a supermarket. Tesco's Fresh & Easy has neither.
Additionally, Fresh & Easy stores don't cash payroll checks. A significant number of Hispanic consumers in California, Nevada and Arizona essentially use supermarkets, such as Safeway, Ralphs, Frys and Bashas in Southern California and Arizona, or mass merchandisers like Wal-Mart, as their retail banks. They cash their weekly or bi-weekly payroll checks at the store (or in the case of those on government assistance, their government checks), then do their grocery shopping at that store. Another strike against Fresh & Easy vis-vis the Latino consumer.
Studies demonstrate Latino consumers are far more brand and store-loyal than other ethnic groups in the U.S. are Therefore, Hispanic shoppers will stick with a supermarket that cashes their payroll checks, spending nearly 100% of their food and grocery dollars with that retailer. Since Fresh & Easy stores don't cash payroll checks, they aren't even in the ballgame for this significant segment of Latino consumers.
Further, Fresh & Easy stores do not accept WIC (Woman's, Infants and Children's Program) Vouchers, which are given to poor mothers by the U.S. government so they can purchase specific, nutritious items such as infant formula, low-fat whole milk, fruit juice, whole grain cereals and fresh produce for their babies and toddlers. Many poor Hispanic mothers receive these vouchers from the U.S. government. These mothers do the primary grocery shopping for their families. Since Fresh & Easy doesn't accept the WIC Vouchers, they are automatically excluding these poor Latino mothers (and poor mothers from all ethnic backgrounds) from using them (and therefore from shopping in) the grocer's stores.
Back to merchandising: Hispanic consumers cook at home far more than Anglo consumers do. Therefore, they are ingredient food and grocery buyers primarily rather than fresh, prepared(ready-to-heat and ready-to-eat) foods shoppers. Since a significant percentage of the products in Fresh & Easy stores are prepared foods, this aspect (and thus potential for sales) of the chain's merchandising is mainly lost among Hispanic consumers, who of course buy some prepared foods, but do so overall in far lower numbers than Anglo consumers do.
When it comes to fresh meat, which along with fresh produce Latino (and Asian) consumers purchase in far higher numbers than Anglo shoppers do, Fresh & Easy stores have few of the types of cuts of beef, for example, that Hispanic consumers generally purchase. These include thin cuts of round and flank steak and the like. The same is true regarding types of pork roasts and cuts. The case is the same when it comes to the stores' fresh fish and seafood selections.
Moving to the core of the store, to the dry grocery category, Hispanic consumers tend to be much more brand loyal than Anglo consumers are, particularly when it comes to first generation immigrants from Mexico and Central America. The 15 years of research on Hispanic consumers in the Western U.S. mentioned earlier bears this out.
Latino shoppers look for trusted, category-specific authentic brands -- Herdez (salsa), Embassa (peppers), Pagasa (pasta and cookies), El Tapitio (hot sauce), Juanita's (hominy), Nestles's
various Hispanic brands (canned milk, ect.), and numerous others -- across all grocery categories rather than store or private label versions, and are willing to pay a premium for these trusted brands in their respective categories.
However, since about 65% of the grocery category items in Fresh & Easy stores are under the retailer's fresh & easy store brand, there just isn't enough room to carry the numerous Hispanic brand products most Latino consumers require a supermarket carry in order for it to be their primary food shopping venue. And, Fresh & Easy stores don't currently carry anywhere near the number, or proper variety, of such skus to make them very attractive to most Hispanic consumers.
We have no doubt a creative PR firm such as RLPR will be able to raise Fresh & Easy's profile among Hispanic consumers in Southern California, Nevada and Arizona. That's what they do -- and they do it well overall.
But no marketing communications campaign can take a current format, Tesco's Fresh & Easy, that's not particularly appealing to Latino shoppers, and make it so. Doing that is a merchandising-operations issue.
You can put organic arugula and purple heirloom tomatoes in a burrito after all -- but it's still a burrito. In a similar vein, you can drive Latino consumers into a grocery store with a marketing communications campaign but if that store doesn't suit their shopping needs they aren't likely to return, especially with all the alternatives that do fit their shopping needs in the respective market regions.
As the Fresh & Easy format is today -- majority pre-packaged produce rather than majority bulk, lack of abundance, meager fresh meats that appeal to Latino's, a dearth of key authentic Hispanic brands and skus, policy of not cashing payroll checks, and other aspects we haven't mentioned -- Tesco's Fresh & Easy Neighborhood Market isn't a format that in our analysis offers much appeal to Hispanic consumers as either their primary or even secondary shopping venue for food and groceries.
If Tesco wants to gain a greater share of the Latino consumer dollar -- which with an about 30-40% population percentage range in Southern California, Nevada and Arizona (and much higher in parts of Southern California and Arizona), isn't a bad idea -- it needs to focus first on merchandising, on creating an attractive format for Hispanic shoppers, then communicate that reality to them. As it is now, the grocery chain's Latino marketing program will be all sizzle (marketing) and very little steak (Hispanic consumer merchandising).
But this has been the norm for Tesco's Fresh & Easy since before the first stores even opened in the fall of 2007 -- putting PR over merchandising; the sizzle over the steak. This has surprised us since we know Tesco corporately to generally put merchandising (being a merchant) over being a promoter.
Thus far though that isn't the case with Fresh & Easy Neighborhood Market USA -- which is why in our analysis the business is struggling. Success in food and grocery retailing always puts merchandising, operations and execution over marketing and PR.
In the case of Fresh & Easy's Latino consumer outreach program, we suggest the retailer needs to look at its policies and merchandising, and if it wants to attract more Hispanic shoppers focus on those keys aspects much more seriously before expecting a marketing campaign will win it very many Latino customers.
[For some of the best and most comprehensive research conducted on Hispanic or Latino consumers we suggest the work of Dr. David Hayes-Bautista, who is currently the director of The Center For The Study of Latino Health and Culture at the University of California (UCLA) Medical School in Los Angeles, California. Much of the research we site in our piece comes from Dr. Hayes-Baustista and his staff's work over the years.
Another good source of research information on Latino consumers, particularly with a focus on the Western USA, is the Southern California-based Mexican American Grocers Association (MAGA). You can view the trade group's Web site here. MAGA holds a conference and convention each year, focusing on the Hispanic consumer. This year's conference is March 10-12 in Palm Springs, California.]
To this end, Fresh & Easy has retained the Los Angeles-based public relations firm RLPR + Marketing, which specializes in the Hispanic or Latino market, to handle marketing related and other forms of communications and publicity outreach to Latino consumers via the Hispanic media in these three Western U.S. markets, Fresh & Easy Buzz has learned.
The Los Angeles-based Latino market-focused public relations firm was retained by Fresh & Easy in late 2008. The firm's major focus for Fresh & Easy begins this month though.
RLPR does not replace Fresh & Easy's public relations firm of record, APCO Worldwide. APCO Worldwide employee Brendan Wonnacott serves as the corporate spokesperson for Tesco's Fresh & Easy Neighborhood Market USA and the firm handles general PR and marketing communications for the grocery chain.
Rather, RLPR's mission for Tesco is to better position and communicate the Fresh & Easy grocery and fresh foods chain among Hispanic consumers through media relations efforts targeting the Hispanic media, as well as through special events and others forms of marketing communications.
PLPR, which also has an office in New York, bills itself as an 100% Hispanic and woman-owned firm.
The firm's focus is on the fast-growing Latino consumer market. It was started in 1996 by then 25-year old Roxana Lissa, who began with one employee, herself, and an office in her Southern California home. Since then, RLPR has grown to become one of the largest independent Hispanic PR firms in the U.S.
Among the clients RLPR currently does work for include consumer package goods company General Mills, Dutch beer giant Heineken, the national honey board, and others.
Fresh & Easy Buzz is aware of the work of RLPR. In terms of choosing a PR firm focused on the Latino market, it's a good choice for Fresh & Easy, or for any other company for that matter. The firm is creative and has a strong track record.
Merchandising-Operations: 'Si, se puede! for Fresh & Easy doubtful
The problem with Tesco's Fresh & Easy vis-a-vis the Hispanic consumer base, which comprises about 30-40% of the total population in Southern California and Arizona, isn't a PR or marketing issue. Instead it's a merchandising issue.
The Fresh & Easy grocery and fresh foods markets just aren't very Latino-consumer friendly. And in Southern California and Arizona in particular, there are numerous grocery retailers that specialize in Hispanic consumers specifically. And even chains such as Safeway and Ralph's have neighborhood marketing programs in which they focus stores in neighborhoods with high Latino populations on the Hispanic consumer.
Fresh & Easy has miles to go before it can compete with these retailers for the Hispanic food and grocery dollar. It's all about merchandising and very little about marketing or PR.
For example, nearly 100% of the fresh produce in Tesco's Fresh & Easy stores is pre-packaged. Study-after-study conducted in the Western U.S. market over the last 15 years has shown that Hispanic consumers prefer bulk produce far and away over pre-packaged. Can you recall the last Hispanic-focused supermarket you've been in that had even 25% of its fresh produce pre-packaged in bags and plastic tubs like Fresh & Easy stores do, for example?
In surveys Latino shoppers site and abundance of fresh, bulk produce and an extensive selection of fresh meats and fresh fish as the two most important categories they consider when choosing a supermarket. Tesco's Fresh & Easy has neither.
Additionally, Fresh & Easy stores don't cash payroll checks. A significant number of Hispanic consumers in California, Nevada and Arizona essentially use supermarkets, such as Safeway, Ralphs, Frys and Bashas in Southern California and Arizona, or mass merchandisers like Wal-Mart, as their retail banks. They cash their weekly or bi-weekly payroll checks at the store (or in the case of those on government assistance, their government checks), then do their grocery shopping at that store. Another strike against Fresh & Easy vis-vis the Latino consumer.
Studies demonstrate Latino consumers are far more brand and store-loyal than other ethnic groups in the U.S. are Therefore, Hispanic shoppers will stick with a supermarket that cashes their payroll checks, spending nearly 100% of their food and grocery dollars with that retailer. Since Fresh & Easy stores don't cash payroll checks, they aren't even in the ballgame for this significant segment of Latino consumers.
Further, Fresh & Easy stores do not accept WIC (Woman's, Infants and Children's Program) Vouchers, which are given to poor mothers by the U.S. government so they can purchase specific, nutritious items such as infant formula, low-fat whole milk, fruit juice, whole grain cereals and fresh produce for their babies and toddlers. Many poor Hispanic mothers receive these vouchers from the U.S. government. These mothers do the primary grocery shopping for their families. Since Fresh & Easy doesn't accept the WIC Vouchers, they are automatically excluding these poor Latino mothers (and poor mothers from all ethnic backgrounds) from using them (and therefore from shopping in) the grocer's stores.
Back to merchandising: Hispanic consumers cook at home far more than Anglo consumers do. Therefore, they are ingredient food and grocery buyers primarily rather than fresh, prepared(ready-to-heat and ready-to-eat) foods shoppers. Since a significant percentage of the products in Fresh & Easy stores are prepared foods, this aspect (and thus potential for sales) of the chain's merchandising is mainly lost among Hispanic consumers, who of course buy some prepared foods, but do so overall in far lower numbers than Anglo consumers do.
When it comes to fresh meat, which along with fresh produce Latino (and Asian) consumers purchase in far higher numbers than Anglo shoppers do, Fresh & Easy stores have few of the types of cuts of beef, for example, that Hispanic consumers generally purchase. These include thin cuts of round and flank steak and the like. The same is true regarding types of pork roasts and cuts. The case is the same when it comes to the stores' fresh fish and seafood selections.
Moving to the core of the store, to the dry grocery category, Hispanic consumers tend to be much more brand loyal than Anglo consumers are, particularly when it comes to first generation immigrants from Mexico and Central America. The 15 years of research on Hispanic consumers in the Western U.S. mentioned earlier bears this out.
Latino shoppers look for trusted, category-specific authentic brands -- Herdez (salsa), Embassa (peppers), Pagasa (pasta and cookies), El Tapitio (hot sauce), Juanita's (hominy), Nestles's
various Hispanic brands (canned milk, ect.), and numerous others -- across all grocery categories rather than store or private label versions, and are willing to pay a premium for these trusted brands in their respective categories.
However, since about 65% of the grocery category items in Fresh & Easy stores are under the retailer's fresh & easy store brand, there just isn't enough room to carry the numerous Hispanic brand products most Latino consumers require a supermarket carry in order for it to be their primary food shopping venue. And, Fresh & Easy stores don't currently carry anywhere near the number, or proper variety, of such skus to make them very attractive to most Hispanic consumers.
We have no doubt a creative PR firm such as RLPR will be able to raise Fresh & Easy's profile among Hispanic consumers in Southern California, Nevada and Arizona. That's what they do -- and they do it well overall.
But no marketing communications campaign can take a current format, Tesco's Fresh & Easy, that's not particularly appealing to Latino shoppers, and make it so. Doing that is a merchandising-operations issue.
You can put organic arugula and purple heirloom tomatoes in a burrito after all -- but it's still a burrito. In a similar vein, you can drive Latino consumers into a grocery store with a marketing communications campaign but if that store doesn't suit their shopping needs they aren't likely to return, especially with all the alternatives that do fit their shopping needs in the respective market regions.
As the Fresh & Easy format is today -- majority pre-packaged produce rather than majority bulk, lack of abundance, meager fresh meats that appeal to Latino's, a dearth of key authentic Hispanic brands and skus, policy of not cashing payroll checks, and other aspects we haven't mentioned -- Tesco's Fresh & Easy Neighborhood Market isn't a format that in our analysis offers much appeal to Hispanic consumers as either their primary or even secondary shopping venue for food and groceries.
If Tesco wants to gain a greater share of the Latino consumer dollar -- which with an about 30-40% population percentage range in Southern California, Nevada and Arizona (and much higher in parts of Southern California and Arizona), isn't a bad idea -- it needs to focus first on merchandising, on creating an attractive format for Hispanic shoppers, then communicate that reality to them. As it is now, the grocery chain's Latino marketing program will be all sizzle (marketing) and very little steak (Hispanic consumer merchandising).
But this has been the norm for Tesco's Fresh & Easy since before the first stores even opened in the fall of 2007 -- putting PR over merchandising; the sizzle over the steak. This has surprised us since we know Tesco corporately to generally put merchandising (being a merchant) over being a promoter.
Thus far though that isn't the case with Fresh & Easy Neighborhood Market USA -- which is why in our analysis the business is struggling. Success in food and grocery retailing always puts merchandising, operations and execution over marketing and PR.
In the case of Fresh & Easy's Latino consumer outreach program, we suggest the retailer needs to look at its policies and merchandising, and if it wants to attract more Hispanic shoppers focus on those keys aspects much more seriously before expecting a marketing campaign will win it very many Latino customers.
[For some of the best and most comprehensive research conducted on Hispanic or Latino consumers we suggest the work of Dr. David Hayes-Bautista, who is currently the director of The Center For The Study of Latino Health and Culture at the University of California (UCLA) Medical School in Los Angeles, California. Much of the research we site in our piece comes from Dr. Hayes-Baustista and his staff's work over the years.
Another good source of research information on Latino consumers, particularly with a focus on the Western USA, is the Southern California-based Mexican American Grocers Association (MAGA). You can view the trade group's Web site here. MAGA holds a conference and convention each year, focusing on the Hispanic consumer. This year's conference is March 10-12 in Palm Springs, California.]
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