An English Village, A British Fresh Chicken Brand and Tesco Fresh & Easy's New 'Buxted' Discount Fresh Meat Brand: What Do All Three Have in Common?

Tesco's Fresh & Easy is currently promoting "Buxted" Boneless-Skinless Chicken Breasts for $1.77 pound and Boneless New York Steaks for $3.99 pound in its advertising flier. Both promotional price-points are extremely competitive ones in the three states, California, Nevada and Arizona, where its 115 grocery and fresh foods are located.

When Fresh & Easy Buzz first learned Tesco's Fresh & Easy Neighborhood Market was preparing to introduce a new fresh meats store brand named "Buxted" the first two images that resonated in our mind were: 'sounds upscale or high-end, and sounds British.'

The name "Buxted" for a food product brand sounds to our ears and internal brand radar gauge to be upscale-high-end (even a bit stuffy) rather than discount or value-based, which is how Tesco's Fresh & Easy has positioned and priced "Buxted,", as the brand name for its new line of value-priced fresh meat products.

A Fresh & Easy Buzz reader offered a different take recently. She said when she first heard the name "Buxted" she immediately thought of the popular "Buxton" brand of leather wallets and handbags. (We did point out to her that Fresh & Easy is offering fresh beef, like the New York steaks it has on sale in its advertising flier this week, under the "Buxted" fresh meats brand -- and that since both leather wallets and beef steaks do come from the same animal -- there is somewhat of a connection between the two brand names and the respective products offered under the two brands.

We've since done a little research after our first impression of the "Buxted" brand name, asking consumers to name which of the two -- upscale brand or discount brand -- comes immediately to their minds when they hear the brand name "Buxted." So far we've asked 31 consumers; 23 have said "upscale," two said "who cares," four said "they had no idea," and two said "discount." We continue the exercise.

But "Buxted" it is for Tesco's Fresh & Easy when it comes to its value or discount-priced line of fresh meat products, which includes chicken as well as beef.

Since the other thought that came immediately to mind when we heard "Buxted" as the new fresh meat value brand name for Tesco's Fresh & Easy was that 'it sounds British, English,' we went investigating.

And indeed we were correct.

"Buxted" just happens to be the name of a civil Parish (think county if you are an American), as well as the name of a village, Buxted village, in the Parish, which is located in Uckfield, East Sussex, United Kingdom. It's right next door to Coopers Green, and just a stones' throw from Maresfield, as you can see on the map above.

Buxted Parish, of which the village of Buxted is a part, even has its own Web site, which you can view here.

Buxted, which has a storied, and some say important, history, today has about 3,300 residents, according to its Web site. The village and surrounding area is rural and bucolic, the stuff of English countryside drawings and paintings.

Below is how the town council describes Buxted Parish:

"Buxted Parish, which includes Five Ash Down and High Hurstwood is situated in the High Weald Area of Outstanding Natural Beauty between the North and South Downs. The Weald was originally an area of land between two lines of chalk hills called the North and South Downs. Weald is an old English word for "forest" and this area across Kent and Sussex included Ashdown, Tilgate and St. Leonard's forests which remain today. Uckfield and Crowborough are the nearest market towns."

The village of Buxted lies on the A272 roadway from Heathfield to Uckfield road. The name of the village derives from "Bloc Stede," meaning the "stand of beeches" (A beech wood), according to local historians and the village council.

Buxted is a small village (that's the village sign pictured above) with very few local retail shops or services. The main shopping center for residents is in Uckfield, which is just a few miles south.

Historically, Buxted got an occupational and economic boost in 1331 when the export of unwashed wool was prohibited by King Edward III. He encouraged weavers from Flanders to settle in England. They brought their weaving and dying techniques to England, and at Buxted , they produced silk materials.

but a bigger economic bang was to come to Buxted. The cannon making industry in the Weald (think county again) started in 1543 at a furnace on the stream at Hoggets Farm lying to the north between Buxted and Hadlow Down .

The reason for this is because Buxted Parish was a major producer of iron, which the cannons were made out of. Over the following years the area became rich from the iron industry, and the village of Buxted benefited from supplying the forges and furnaces in the area.

but all good things, like the iron industry and cannon-making, come to an end eventually. And such was the case in Buxted. When the iron industry collapsed in the early 1800's the village of Buxted reverted to its rural roots. [You can read a bit more about the history of Buxted here and here.]

But, you are probably asking ...What's the connection between Buxted Parish and the village of Buxted ... and meat -- particularly Tesco Fresh & Easy Neighborhood Market's new "Buxted" brand of discount-priced fresh meats?

Well, it's all about the chicken; "Buxted Chicken" to be precise.

At one time Buxted was super-famous for its chicken processing industry. The British wholesale Buxted Chicken Company had a large chicken processing factory in the village of Buxted, as well as one in nearby Five Ash Down.

Although the Buxted chicken factory closed down in the 1980s, and the site is now owned by the Woodland Trust, the factory in Five Ash Down remains, and the main industry and economic claim to fame in Buxted Parish and the village of Buxted is still the chicken business.

The well-known British "Buxted" brand chicken was the brainchild of Britain's Antony Fisher, who went on to found the Institute of Economic Affairs, a respected think tank and public policy center in the United Kingdom (UK).

'Buxted' brand at Tesco-UK and Tesco Fresh & Easy USA

"Buxted" brand chicken is owned and distributed in the UK by West Bromwich-based 2 Sisters Food Group, which is owned by Boparan Holdings Ltd.

2 Sisters Food Group supplies chicken under the "Buxted" brand, as well as for private label, to Tesco in the UK, which owns and operates El Segundo, California-based Fresh & Easy Neighborhood Market in the U.S. states of California, Nevada and Arizona (115 stores at present). 2 Sisters also supplies other major UK supermarket chains like Marks & Spencer and others with "Buxton" brand chicken.

"Buxted" is 2 Sisters' original fresh poultry brand. It later added a second brand, 'The Devonshire Red." The company also does a large volume in private label sales. It's markets other fresh meats and foods along with chicken. [The "Buxted" brand logo above is from the 2 Sisters' Web site.]

"Buxted" is not a discount fresh chicken brand for 2 Sisters in the UK. Rather, it's a "value-added" brand. The company sells private label chicken to Tesco and others that those retailers then use as their store discount or value brands.

Today, 2 Sisters Food Group, which was founded in 1993 and is privately-held, has 13 manufacturing sites in the UK, one in Holland and one in U.S.A. The company says it employees over 5,500 people globally, and that it has annual sales exceeding £650 million (pounds). That's about $830 million U.S. It works closely with Tesco in Thailand, for example.

This is the very same 2 Sisters Food Group that Tesco brought with it in 2007 to the U.S. to be the "in house" procurement and distribution arm for all of the fresh foods (including meats) sold in its combination grocery and fresh foods Fresh & Easy Neighborhood Market stores. 2 Sisters set up shop in Riverside County, in Southern California, where Tesco's Fresh & Easy distribution center is located. [Suggested reading, August, 2008: UFCW Union Reports Tesco Fresh & Easy Neighborhood Market's Prepared Foods Supplier to Labor Board For What it Says is Unfair Firing of Six Employees.]

So you see, Tesco's Fresh & Easy reached back home to the UK to come up with the brand name -- "Buxted" -- of its discount-priced fresh meat line. That's why it sounds British ... because it is.

And, Tesco's Fresh & Easy is using "Buxted" as its discount or value fresh meats (including chicken) brand in the U.S. But as we mentioned above, that's not the positioning of the brand in the UK.

Oops they did it again: 'Buxted,' Fresh & Easy, local marketing and merchandising

It appears to us that by naming its new, value brand of fresh meats after an existing British brand (and a village in England), Tesco's Fresh & Easy has learned nothing from what has been one of its failures to date, in our analysis, which is the turning of a blind eye to the local nature of food and grocery retailing in the U.S.

Why not a brand name for the new fresh meats value line that would resonate in the minds of consumers in California, Nevada and Arizona rather than one imported from the United Kingdom? Perhaps something like "Pacific Pride"? or "Western Value?" Just a thought.

Perhaps it won't matter that the brand, like nearly all of Fresh & Easy's merchandising and marketing, is of British design, which the grocery chain then attempts to stuff into American food retailing, since the focus of the "Buxted" brand is price

But then, if "brand" doesn't matter, why even create a new store brand for the fresh meat line? Just keep the fresh & easy store brand label on the meats (that's the brand on all the other fresh meats sold in the stores) and offer a selection of the items for discount prices on promotion, which is what the retailer is doing with "Buxted" anyway.

Obviously Tesco's Fresh & Easy thinks "brand" matters, even on a line that's focus is discount priced. Why else create a new one?

Therefore, why "Buxted"?

As we said, in our analysis, and in the majority of opinions we've thus far gleaned from the 31 consumers, with more to come, "Buxted" in the first place sounds more upscale or high-end than it does discount or value. (Of course each consumer will be the individual judge of that.)

But the fact the brand name is a British import, and has no brand relevance to America in general and to the Western U.S. specifically, boggles the mind just a slight bit. It reminds us of the very same ethnocentric behavior Tesco Fresh & Easy's senior executives have axhibited from day one.

Of course, we could be wrong. Perhaps brand "Buxted" will do well.

But in the world of brand naming and marketing it's a fact that it helps to create a brand name that has some relevance to the customers it's being targeted to. It's also a fact of food and grocery retailing in the U.S. that taking a local marketing and merchandising focus is a major key to success.

It appears in naming its fresh meats value line "Buxted," Tesco's Fresh & Easy believes both of these marketing and merchandising realities are either wrong or irrelevant.

Thus far this attitude and approach has proven less than successful for the grocer. You just can't force-feed a British food retailing model into U.S. food retailing culture and practice, and fail to take a regional and local approach to private-label product branding and food retailing in general, and expect to do well in America because the nature of food retailing in the U.S. is a regional, sub-regional, sub-sub-regional and local business.

But, the village of Buxted in the UK is a lovely place. That's for sure. Although it's having a tough go economically right now.

And we should add: We hope the "Buxted" brand of value-priced fresh meats is a huge success for Fresh & Easy, both because we want the stores to succeed -- the more competition the better for the entire industry, not to mention keeping the jobs (and adding more) of the great store-level employees who work for the grocery chain -- but also because the value-priced meat line, like the 98-cent produce packs recently introduced by Fresh & Easy, along with some other recent value-based developments, just happen to fit the "value proposition" model we started developing and describing in the Blog over a year ago (and have continued to do), that in our analysis is where Tesco needs to go -- and has been moving towards -- with Fresh & Easy Neighborhood Market. [Fresh & Easy Buzz Redux: Much of the Value Proposition-Based Analysis and Suggestions We've Been Offering Now Being Adopted By Tesco's Fresh & Easy.]

But, in terms of "Buxted," when we hear the name or see it on a package of meat, particularly steaks, we just can't get that thought of the "Buxton" leather wallets out of mind.

Fresh & Easy Gets Local; Creates Free 'Indie' Music Concert Series at its Hollywood, CA Store For September

Tesco's Fresh & Easy Neighborhood Market in partnership with Southern California radio station indie 103.1 is launching a free acoustic music series starting this Thursday at its Hollywood, California grocery store.

The free musical events, which will be held each Thursday evening at 7pm in the outdoor courtyard of the Fresh & Easy store at 7021 Hollywood Blvd., are being called the Blank Canvas Series at Fresh & Easy.

The performers, all from the indie music scene, include: Nico Stai (September 4); Anya Marina (September 11); Meiko (September 18); and Greg Laswell (September 25). You can learn more about the performers here.

As an interesting addition to the music, during the Thursday evening concerts artists will be on hand at the Hollywood Fresh & Easy store custom-painting reusable canvas shopping tote bags. Customers who spend $50 or more at the store will receive a free hand-painted tote bag.

Fresh & Easy Buzz likes the concept and promotion. First, the tie-in with the indie radio station and the Hollywood store located on Hollywood Blvd. is a good one, since the demographics of the neighborhood's residents fit well with the demographics of indie music listeners.

Additionally, who doesn't like free? The free music series offering is a good way to draw attention to the store by providing customers and potential customers with free entertainment. There's no hard sell such as having to make a purchase to listen to the music and the like. Soft sells always work best. It's all value-added.

The free music series also is a good positioning tool for the Hollywood store. Indy music is hip and Fresh & Easy wants to be perceived as somewhat hip. Therefore it's a good marriage of music and store format we think. Grocery stores should be social places as well as ones of commerce. Music is a great social lubricant.

Lastly, the store-specific music series is good local marketing. It matches the store's neighborhood, Hollywood Blvd., with something many residents and visitors to the neighborhood enjoy--indie music.

Since we've been critical of Tesco's Fresh & Easy for not putting a local design, marketing and merchandising focus on its stores, we want to give the grocery chain props for doing so in its tie-in with the indie radio station for the September music series at the Hollywood Blvd. store in Hollywood, California. It's a good fit in our analysis.

Grocery stores and supermarkets are different than most other retail formats in that they sell the most essential of all commodities--food. As such they've historically have served as focal points for people in communities and neighborhoods.

The more of a sense of place a food retailer can create in its stores in terms of physical design, community and ambiance, the more successful generally that grocer is. That's one reason independent grocers continue to survive and thrive in the U.S. while they've nearly gone the way of the horse and buggy in many other western industrialized nations.

Events like the music series at the Hollywood Fresh & Easy, along with incorporating some local design elements and local merchandising features, help create this neighborhood sense of place. Consumers tend to reward such food retailing by spending their money at the stores of grocers who factor in this important consideration, along with the basics like product selection, pricing and service.

Feature & Analysis: Tesco is Launching A Major 'Local Foods' Program in the United Kingdom; Why Not Do the Same At Fresh & Easy USA?

Tesco, the world's number three retailer and the number one food and grocery sales market share leader in its home country of the United Kingdom with about 32% of the nation's total retail food sales, is launching what appears to be the biggest local foods sourcing and merchandising program in the UK.

Last year, Tesco opened five new local foods' regional buying and marketing offices in the UK cities of York, Leicester, Plymouth, Peterborough and Horsham, making it the first supermarket chain in the UK to develop such an extensive regionally-based structure designed to procure and market locally-based food and grocery products.

Each of the five local offices has a buyer and marketing person who's jobs are to find and procure high-quality, locally-produced products to sell in Tesco's UK stores.

As part of its local foods procurement and marketing program, Tesco also has started holding "Meet the Farmer" local foods events in its UK supermarkets.

Since Tesco launched the program, called "Local Sourcing", last year, the retailer says it's five regional UK offices have thus far launched over 1,00 new, local food and grocery product lines in its stores, bringing the total number of locally-produced products the retailers sells currently to about 3,000. Tesco also says it's added 90 new local suppliers to its vendor list.

Tesco UK also has an executive in charge of the local sourcing program, Emily Shamma. Ms. Shamma says UK consumers want to buy quality local food and to support local producers by doing so.

Tesco customers also want to buy more local foods to cut down on food miles and the resulting carbon emissions, Shamma says.

Further, UK consumers see locally-produced foods as having overall superior quality to food products imported from elsewhere, as well as liking the idea they can know more about how the local products are produced (because the goods are local) compared to imported food and grocery products.

Tesco plans to further grow its local foods' sourcing and marketing program, according to Ms. Shamma. She says the retailer's goal is to sell more locally-produced food and grocery product lines than any other UK food retailer.

To further this aim, Tesco also has set up a fund designed to help small, local farmers expand their businesses. This is similar to what U.S.-based natural foods' retailer Whole Foods Market, Inc. is doing for small farmers in the United States as a way to promote small-scale agriculture and local food production.

Tesco has put ~1 million-p ($1.95 billion U.S.) in the fund to use to help give local farmers and producers a leg up in expanding their operations.

The British retailer also has created a local technical team in each of the five regional offices. The team offers and provides free help to the local producers in the areas of manufacturing, packaging, quality assurance and marketing. part of the reason for creating these dedicated technical teams is so Tesco can make sure the local producers have the means available to meet the retailer's overall product quality control standards for the goods it sells in its UK stores.

Samma also says Tesco doesn't just want to make local foods available in its stores to wealthy consumers. Rather, the goal is to make local fresh produce for example more affordable so that it's available for UK consumers of all income levels, she says.

Tesco's current goal is to sell ~400 million-p ($780 million U.S.) worth of locally-produced food and grocery products in its stores this year, with a longer-term goal of selling ~1 billion-p ($1.95 billion U.S.) worth of the locally-produced bounty by 2011.

Tesco PLC had gross sales internationally of about $84 billion U.S. in 2007.

The locally-produced products Tesco has introduced in its stores just since last year when it opened the five new regional buying offices range from fresh produce like Yorkshire cucumbers and locally-raised fresh meat, pork and poultry products, to locally-produced ice cream and beer. The local foods initiative is across all store product categories, from fresh and frozen, to refrigerated and shelf-stable.

Tesco's main competitors in the UK--Wal-Mart-owned Asda, Sainsbury's, Morrisons, Waitrose, the Co-op and a couple others--also are to various degrees involved in local foods sourcing and marketing programs. Besides Tesco, probably Waitrose and Sainsbury's, followed by the Co-op, are the second, third and fourth most aggressive in local foods procurement and selling in their respective stores in the UK.

None of these competitors however has created as aggressive and as comprehensive local foods program as Tesco has with its five fully-staffed regional offices. And perhaps they don't need to. There are many ways to procure and sell locally-produced foods in their stores.

However, based on the fact Tesco has added 1,000 new locally-produced products in its stores, and 90 new local vendors to its roster in less than a year, it seems the regional buying office concept complete with the in-house technical teams is working well for the retailer--and for the local farmers and food producers who thus far have been able to get their goods into Tesco's UK supermarkets, which exist in nearly every city and town in the nation.

Tesco's Fresh & Easy USA and local foods

As regular Fresh & Easy Buzz readers are aware, we've argued regularly that one of the weaknesses--both from merchandising and sales aspects--of Tesco's current 61 small-format, convenience-oriented grocery stores in the Western U.S., is that the stores are not localized in terms of their features on a community and neighborhood basis and in their product mixes.

For example, we've suggested that on top of the basic Fresh & Easy store format, the grocery chain add some custom features based on where the store is located.

For example, some Southwestern-oriented and Latin-oriented flair for the Arizona stores as well as custom features in the Southern California stores to reflect the history, culture and demographics of the different regions and communities the stores are located in, rather than taking a cookie-cutter store design approach, which currently is the case.

We've also suggested strongly the Fresh & Easy stores need to sell more locally-produced food and grocery products--foods from California in the Southern California stores, more foods produced in Arizona in those stores.

There are thousands of fresh and shelf-stable locally-produced products available in both states that aren't currently for sale in the Fresh & Easy stores.

We aren't suggesting Tesco bring in thousands of these local products--the Fresh & Easy stores are limited assortment grocery stores after all. Rather, the retailer just needs to add a solid variety of locally-produced food and grocery items throughout store categories--from fresh produce, meats and dairy, to dry grocery, on top of its core fresh & easy store brand and limited number of national brands product mix.

The stores already have some locally-produced products, especially in the fresh produce category by virtue of the fact much fresh market produce is grown in the west. However, the selection is minimal and spotty, especially outside the produce category.

If Fresh & Easy Neighborhood Market begins a localization program like we suggest--and like Tesco is doing in the UK--it will find itself creating stronger bonds--and more business--with the consumers in its market regions.

All of the reasons given by Tesco's UK local foods sourcing chief Emily Shamma as to why the retailer is going big with local foods sourcing and marketing in the UK exist equally among U.S. consumers, especially in the Western U.S. where Tesco has its Fresh & Easy grocery stores.

California, Arizona and to a lessor degree Nevada are top U.S. farming states. Further, California's Central Valley is the world's number one agricultural producing region. Residents in these three states love locally-produced foods, and will even purchase them at a slight premium over foods from other parts of the U.S.

California also is the home of the local foods movement and has many food retailers like Whole Foods Market, Raley's, Safeway Stores, Bristol Farms, Gelson's and numerous others who are focusing extensively on procuring and selling locally-produced foods in their stores.

Both California and Arizona also are top specialty, natural and organic food and grocery product producing states in the U.S. Local producers in these two states produce everything from scores of types and varieties of fresh produce and locally-raised beef, poultry and pork, to nuts, milk, cheese, wine, breads, oils, shelf-staple grocery products of every kind and more.

Tesco could have an absolute field day procuring and selling locally-produced foods in California and Arizona for its Fresh & Easy grocery stores. And, it wouldn't take all that much too succeed at it if done right.

A careful and thoughtful addition of a few locally-produced food and grocery products in every category of products in the Fresh & Easy stores would have the overall effect of making a big difference in terms of achieving that "localization" formula we discussed earlier. The category-wide local foods product mix needs to be selected carefully however.

Doing so also builds consumer loyalty. As Tesco's local foods guru Emily Shamma said about UK consumers wanting to buy locally-produced foods and support local farmers, so too do U.S. consumers want to do--and are doing--the same thing. This is particularly true among Western USA consumers in California, Nevada and Arizona, who count numerous local farmers and local food producers among their family members, friends, relatives and business associates.

Local foods procuring and advertising "locally-grown" on the menu also is big with mid-range to higher-end restaurants in the Western USA. These restaurants, especially the higher-end ones, are major food trend setters, and their local foods' initiatives have made buying and eating local even stronger among consumers in the region.

U.S. consumers also want to buy local foods for environmental, as well as for product quality and local farmer-producer-support reasons. And they're doing so. That's why local farmers' markets are so popular in the U.S., especially in the Western U.S. These local fresh fruit and vegetable farmers' markets, which also sell all sorts of other local food and grocery products, have grown by 50% in number and customer counts in just the last decade.

In California, a state with nearly 40 million people, nearly every city and small town has a farmers' market which starts in early spring and runs into the fall. Most big and medium cities even have farmers' markets that operate year-round. Further, most larger cities in the Western US have at least two or three--and often more--farmers markets, many of which operate every day of the week.

Americans also are buying local foods in significant numbers at grocery stores, as evidenced by the fast-growing trend among numerous supermarket chains, independent grocers and natural foods' retailers to stock as much of the locally-produced products as they can in their stores.

Many of these food retailers have created "local foods" shelf signs, which they put on every locally-produced product sold in their stores. These grocers also label all the local foods' items in their weekly advertising circulars with bright-colored flags which identify the advertised item as "Local."

Many of the supermarket chains, such as Whole Foods, Safeway, Raley's and others also are partnering with local farmers and local food producers directly, guaranteeing them the retailer will buy the farmers' entire crop of say sweet corn or melons in return for the exclusive marketing and selling of the local crop or products.

If you pay attention to weekly supermarket advertising circulars like we do, you'll notice in just the last year how many more chains and independents have started advertising and promoting locally-produced products every week, as well as how such major food retailers like Safeway Stores, Whole Foods Market and even mid-range chains have increased the number of local items they promote each and every week in their ads as well as in-store.

Local is big. In the Western USA, its rapidly becoming as big as organic.

The opportunity certainly exists for Tesco's Fresh & Easy Neighborhood market USA to launch a local foods initiative. After all, its stores are located in the heart of America's local foods-producing region, the Western USA. The Western U.S. also arguably is home to the most "local foods loyal" consumers in America.

Additionally, Fresh & Easy has the infrastructure and commitment to local foods' procurement and marketing from parent company Tesco's UK local initiative. All Fresh & Easy needs is a few American-bred, experienced local foods procurement and marketing experts to manage the program.

Going local is even going to be more imperative for Fresh & Easy next year when it enters the Northern and Central California markets of Bakersfield, Sacramento and the San Francisco Bay Area with about 43 or so stores, which will start opening in early 2009. Central and Northern California consumers are even more fiercely local foods-oriented than their Southern California, Nevada and Arizona neighbors.

Additionally, the economies of Central and Northern California are still heavily-based on agriculture, including small, local farmers and food producers.

Further, the "foodie" culture, especially in the 7-million resident-strong San Francisco Bay Area is increasingly demanding quality, locally-produced foods, and even in today's bad economic times a high percentage of Bay Area consumers are willing to pay a premium for foods produced locally in the region. Of course, these shoppers would love--and buy even more of--affordable local foods.

We believe an affordable local foods initiative done well, just like an affordable organic foods program executed well, could go a long way towards creating a strong identity and better positioning for Tesco's Fresh & Easy Neighborhood Market USA's small-format grocery stores and the Fresh & Easy brand in general.

There currently isn't a major food retailer of note in California, Arizona and Nevada offering organic and local foods at truly affordable retail prices, except Trader Joe's to a certain extent in the organic space, on a regular basis.

We believe based on our analysis if Tesco's Fresh & Easy could accomplish those two goals--creating and sustaining solid affordable organic foods and local foods' marketing and merchandising programs--the grocery chain would be helped greatly in its goal to succeed in the highly competitive Western U.S. retail food and grocery market.

USA Today Discusses Themes We Sound Off On Here at Fresh & Easy Buzz Near-Daily: Neighborhood, Community and 'Sense of Place' in American Retailing

USA Today business writer Bruce Horovitz--who rumor has it reads Fresh & Easy Buzz on occasion--has a brief piece in the just hot off the press (well, cyberpress) edition of America's national newspaper, which talks about three of our favorite (and very often written about) retail themes in relation to retail grocery stores: neighborhood, community, "localism" and sense of place.

As F&E Buzz readers know, we discuss all these related concepts often in terms of what our analysis tells us Tesco's Fresh & Easy small-format, convenience-oriented, combination basic grocery and fresh/specialty foods grocery markets lack. We also offer numerous suggestions on how Tesco can better create that sense of place, community and neighborhood in its Fresh & Easy stores.

In fact, one of our favorite (and yes, most used) sayings is that Tesco Fresh & Easy Neighborhood Market needs to put the "neighborhood" in its Neighborhood Markets by creating a better sense of place in its stores.

On of the key variables we argue the retailer needs to foucus on in order to achieve this needed result (more sense of place and "neighborhood" in the grocery stores) is "localism," which we define as the need for Tesco's Fresh & Easy to achieve a greater understanding of the history, culture, behavior (of residents) and demographics of the people who live in the neighborhoods where the stores are located--and then to customize certain design elements and features of the grocery markets to these respective neighborhoods--along with greatly increasing the "local" food and grocery product mix in the stores, as well as customizing (neighborhood merchandising) the product mix (on top of the stores basic mix) to each neighborhood.

What we suggest is far from a foreign concept or strategy in U.S. food and grocery retailing.

Give Mr. Horvitz's USA today piece--"It's A Beautiful (Shopping) Day in the Neighborhood," a read here.

By the way, We think Mr. Neighborhood himself, Fred Rogers, would agree with our arguments on "neighborhood," "community," "localism" and "sense of place" as they relate to grocery retailing. We think he also would like Mr. Horovitz's title, and "neighborhood-oriented" retailing piece.

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

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

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

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

>Creating more awareness through advertising

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

Local and Neighborhood Focus Customization

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

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

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

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

Advertising

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

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

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

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

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

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

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

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

Conclusion

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

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

Tesco's 1,000 Mile 'Local' Scottish Chickens

Why did the chicken cross the road? To get into the truck for its 1,000-mile round trip of course.

Retail giant Tesco, parent company of Fresh & Easy Neighborhood Market in the USA and the UK's largest supermarket chain, is coming under fire from environmentalists and shoppers today in the United Kingdom (UK) for labeling chickens sold in it's stores as "local" despite the fact the birds' actually have taken a 1,000-mile round trip to be slaughtered, packaged and then transported to the grocer's stores in Scotland.

The thrust of the matter regarding the "local" labeled but well-traveled birds is that the grocery retailer is currently selling chickens in its Scotland stores that have been raised at a chicken farm in North-East Scotland, then sent 499 miles to Essex to be processed, before then being shipped back to the Scotland stores to be sold. Perhaps Tesco should change the label to "locally raised for now?

But, that seems to be the crux of the problem. According to the UK industry trade publication Meat Trades Journal, the chickens killed at the Grampian Country Foods slaughterhouse in Perthshire, Scotland (local so far) are being shipped (at least until today perhaps) to Witham in South-East Essex (499 miles away) for packaging because the regular packaging plant in Banff, Abberdeenshire (which is close to Perthshire) shut down last year. So much for outsourcing locally and then not finding another local packaging plant right away.

UK environmental groups such as Sustain, the alliance for better food and farming, are accusing Tesco of a lack of full-disclosure by still labeling the birds as "local." The green groups also are saying the chickens' 1,000-mile round trip--from near the Scotland stores to 499 miles away and back again--is creating unneeded extra food miles and adding to the country's already growing carbon emissions. Sounds logical to us.

Another UK environmental group, Friends of the Earth, also issued a statement today about the non-local, "local chickens." Vicki Hird (rhymes with bird), a Friends of the Earth spokesperson, said: "Consumers thinking they are buying 'greener,' local and Scottish are actually buying pretty travel-sick chicken." Chickens travel far more than 1,000 miles to get to market and are still tasty. However, we get the thrust of Ms. Hird's point.

Tesco, the world's third-largest retailer, defended its travel itinerary plan for the birds in a statement saying basically it didn't have any option because the local packaging plant closed and they needed to get the chickens packaged for sale at the stores. A Tesco spokesperson didn't comment on how many chickens are being sent on the 1,000-mile roundtrip journey. However, the retailer said it hopes to have the situation solved very soon

The local Grampian Country Foods' packaging plant closed last year (about six months ago), according to Max Tooley, Tesco's technical meat manager for poultry. Tooley added that although the situation has been going on for about six months (then why still label the birds as local we wonder?) it should "hopefully be solved in about two weeks," with the pending approval of a new packaging plant at a new site nearby where the chickens are slaughtered. We're glad it will be solved in two weeks. But that could be a long two weeks if Tesco doesn't take the local label off the chickens' packaging or the shelf.

Tesco shoppers weren't very happy today upon hearing the news that the "local" birds aren't really all that local because of their travels. Consumers buy "local" foods not just because they are raised locally, but also because they are processed and packaged locally as well. In other words, one of the keys to "locally grown" is that the products don't have to travel excessive food miles to get to the stores where shoppers buy them. Local equals a lower carbon footprint.

The locavore (local foods) movement defines a locally-produced food product as one that generally comes from no more than 100 miles from where it is sold at retail and purchased at the grocery store, or elsewhere, by a consumer. This local definition includes the food product being grown, processed, packaged and distributed within that 100-mile distance. Obviously, in the case of the 1,000 mile chickens, they don't quality under that definition.

Meanwhile, the revelation about the well-traveled "local" chickens is a serious hit for Tesco. It's CEO, Sir Terry Leahy, has been arguably the most outspoken of all UK retailers on the need for the supermarket industry to reduce its carbon footprint. In fact, under a plan of Leahy's, Tesco plans to eventually label all of the food and grocery products it sells in its stores with a "carbon footprint" label. The label, similar to nutritional labels on packaged foods, will inform the consumer where the product was produced, processed and warehoused, and how many food miles it traveled to get to the Tesco store.

Tesco in the UK also has been a major proponent among UK food retailers of buying and selling locally-grown foods in its stores, including beef, pork, poultry and other food and grocery products. Local foods is a major issue among UK consumers, not only as part of the nation's p[opular and fast-growing green movement, but also as a way of preserving it's shrinking farming industry.

To the latter point, the Tesco chickens are raised locally. However, to the former point, the 1,000- mile journey--to the packaging plant and back again--violates the green aspects of the "buy local" movement.

It seems that even without their wings, these particular Scottish Tesco chickens are still well-traveled birds.

Is Tesco's Fresh & Easy Playing the Fiddle While Palm Springs' 'Burns' for A Trader Joe's?

Today's addition of the Desert Sun, the daily newspaper for the Southern California desert city of Palm Springs, reports that a neighborhood coalition wants a Trader Joe's grocery store in its city so bad, it's launched a petition drive to convince the retailer to open a store in this residential and resort town of about 75,000 residents.

According to David Carden Jr., chairman of the Baristo Neighborhood Coaltion in Palm Springs, the group has thus far obtained 3,500 signatures towards its goal of 5,000 on a petition asking Trader Joe's to open one of its 10,000 square foot specialty grocery stores in the city. Carden told the Desert Sun the coalition hopes to reach its goal by April 11, 2008. (Read the full Desert Sun story here.)

Palm Springs, which is located in the Southern California desert region, is not only a fast-growing residential area and one of the top retirement communities in the U.S., it also has a thriving tourism and convention industry--one of the biggest in the country in fact. The city is especially packed with tourists in the winter months (January through March) when the temperatures in the city and surrounding region are in the 90's, and often hit over 100 degrees. The city's demographics and overall income level fits very well with the types of locations Trader Joe's seeks out for its grocery stores.

Community groups petitioning Trader Joe's in this manner isn't that unusual. For example, a group in Albany, New York is currently conducting a similar petition drive--along with an agressive and professional lobbying and PR campaign--aimed at convincing Trader Joe's their city is worthy (and the demand is there) of a TJ's grocery store. A group in Nashville, Tenessee is doing the same.

Numerous other cities in the U.S. have launched similar petition drives designed to hopefully bring one of the popular Trader Joe's stores to their respective towns. In 2000, citizens in the Southern California city of Long Beach were successful in getting TJ's attention with such a petition drive and PR program--and as a result Trader Joe's built and opened a grocery store in that city.

This is the type of consumer demand most food retailers would trade a lifetime's worth of free groceries for. Fresh & Easy Neighborhood Market would love this level of demand in Palm Springs (and elsewhere), for example. However, despite the fact the retailer will soon open a Fresh & Easy store in Palm Springs, the neighborhood coaltion still wants a Trader Joe's. That isn't a critique of Fresh & Easy so much as its testimate to the brand strength of TJ's. However, it is something Tesco's Fresh & Easy Neighborhood Market senior management should study and learn from we believe.

Perhaps the Palm Springs' group doesn't even know Tesco's Fresh & Easy Neighborhood Market will soon open one of it's 10,000 -to- 13,000 square foot grocery markets--which have many similarities to TJ's, but also a number of differences--in the desert city soon. Of course, we think they should know, since Fresh & Easy has a number of its grocery stores located right around Palm Springs, and just opened a new store two days ago in the neighboring city of Palm Desert. Plus, it's not like their hasn't been any publicity regarding the British grocer's petite grocery stores in Southern California.

With these facts and realities in mind regarding Treader Joe's, here are a few things we would do immediatly upon reading this news if we were part of Tesco's Fresh & Easy Neighborhood Market senior management team:

>Call Mr. David Cardon Jr., head of the Palm Springs' neighborhood coalition, and invite him to a "coffee date" in downtown Palm Springs. At coffee, give him a brief overview of Fresh & Easy, including an overview about the new store that's set to open soon in Palm Springs. (Note: pay for his coffee and a pastry for him.)

Also during coffee, ask him if you and another of your Fresh & Easy collegues can meet with the Baristo Neighborhood Coalation, give them a brief presentation, and most importantly, ask them for their input in what they want in their Fresh & Easy that the stores' don't currently have. (We suspect they will tell you they want a numer of things TJ's stores have.) Bring them some Fresh & Easy fresh brewed coffee and a variety of treats on meeting night, by the way.

>Once you have informed the group about the coming Palm Springs Fresh & Easy grocery store, and listened to and written down all of their comments about why they want a Trader Joe's in Palm Springs so much, the hard work begins. You, Fresh & Easy executives, will need to decide what new elements, from the input from the group, you will implement in the Palm Springs Fresh & Easy store that just might be in your format. In other words, localization within the basic Fresh & Easy format blueprint.

We suggest you incorporate most of what they tell you they want into that store. You know the reason why: the group wants a Trader Joe's so bad in Palm Springs they're willing to work for it. We know Fresh & Easy is new, but we don't hear any groups--or even a single Plam Springs resident--creating much of a demand for one of your stores. We mean no offense; just telling you what we have learned.

Tesco needs to localize Fresh & Easy's style and merchandising mix

This gets us to the major point we're trying to make to Tesco's Fresh & Easy Neighborhood Market in this piece, with the help of the Palm Springs coaltion, who provide a perfect real life example. That point is: Tesco seriously needs to localize its Fresh & Easy stores more, including parts of the store design, its offerings, and its product mix.

We think Tesco can use its basic Fresh & Easy format as the template. However, within that basic template or blueprint, the stores need to be given more local positioning and a sense of place. For example:

>Design and sense of place: Tesco needs to put the "Neighborhood" in Fresh & Easy Neighborhood Market stores. The stores are supposed to be neighborhhod grocery stores, where people shop around, spend time, and buy a cart full of groceries. Rather, from our observation people are shopping the stores in the main like they do basic convenience stores. In other words, just buying a few items on their store trips. We bet the stores' average ring, an important food retailing metric, bears us out on this.

Tesco also needs to create some warmth, and more of a sense of place in the Fresh & Easy stores. We suggest one way Tesco can create this needed sense of place in the stores is to borrow a page from Tesco stores in the UK that have "Tesco Cafes," in-store cafe's like those so common in many American supermarkets today.

Since Fresh & Easy Stores are small (10,000 -to- 13,000 square feet on average) the "Fresh & Easy Cafe" can be smaller than those in supermarkets. We suggest an intimate, approximately 600 square foot petite cafe inside the store (not all stores neccessarily) as one way to create a sense of place in the grocery markets, as well as to encourage shoppers to spend more time in the stores. For example, Starbucks has numerous cafe's this size in supermarkets and in chain bookstores. They are very successful and add to the supermarket's or book store's overall sense of place, along with allowing customers to linger, and buy more.

Localization within the format template: The Western U.S., especially California, is the U.S. mecca for specialty and natural foods, groceries and other products. It has more producers in these categories than any other region in the country. It's also the per-capita number-one region (California the number-one state) in terms of specialty, natural and organic products consumption. California is the food products' trend setter; south and north. And "local" is big, no huge, in California among consumers.

However, when you walk into one of the numerous Fresh & Easy grocery stores in Southern California or Arizona, you see none of these facts and phenomenon's represented. No major offerings of southwestern foods in the Arizona stores, no extensive "made in California" merchandising in the Southern California stores, and no focus on the many local, artisan food and grocery product purveyers who populate both states in droves.

[Note: California also is the nation's number one and its most diverse agricultural producing state. California (and Arizona) consumers love large displays of fresh, bulk produce. It's what they are used to. That's one reason they love the state's many farmers' markets so much. The packaged fresh produce--which Fresh & Easy gets in bulk from suppliers and then packages at its distribution center--isn't going to make it, especially in California. If Fresh & Easy were to go to a quality, bulk fresh produce merchandising scheme instead of the current packaged one, we believe they would see at least an immediate 30%-40% increase in sales in the fresh produce category.]

The local angle plays a strong part again here with fresh produce. California has a bounty of fresh fruit and vegetable growers. In fact, Southern California is full of them. However, visit a Fresh & Easy grocery store in Southern California, and you're hard-pressed to find anything in the way of "locally-grown" fresh produce. That's a huge marketing mistake.

[Note to Fresh & Easy: Tip O' Neill, the famed former Speaker of the U.S. House of Representatives, was famous for saying: "All Politics is Local." He never lost an election, including the one among all his "local" fellow Congressman that made him Speaker, by remembering and practicing that motto for about 60 years in politics.

To paraphrase Tip O' Neill from a Fresh & Easy perspective: in the Western USA--especially in California--"Local is King." This doesn't mean Fresh & Easy must throw away the format. What it does mean is that success will come when the grocer uses that format as its template--and then localizes its stores to reflect a given community's history, culture, present and demograpics. This is one important key to Whole Foods Market, Inc.'s sucess. They even "localize" stores to neighborhoods within the same city, while keeping their basic format blueprint intact.

This localization needs to include design elements to the stores in addition to the product mix. For example, Tesco has signed leases for 18 stores in Northern California to date. The stores are to be opened in late 2008 or early 2009. Among those 18 stores include markets in San Francisco, Oakland and Napa.

These three cities offer perfect examples to explain the importance of localization within the format template. Each city has a rich and unique history, as do most California cities. Napa is America's premiere wine growing and producing region, as well as the country's number one place for specialty, natural and artisian foods innovation. We would hope a Napa Fresh & Easy store would reflect much of those facts in its design elements and product mix.

San Francisco, as we all know, is the culinary co-capital of the U.S., along with New York City. It's also a former gold rush town, and is today one of the top high-tech and internet-oriented business centers in the world. Additionally, San Francisco is a city of neighborhoods, each one having a distinct history and unique present. These elements should be reflected in any Fresh & Easy grocery store located in San Francisco. If not, San Francisco shoppers--who are major boosters of their city--will avoid the stores, branding them as just another cokkie-cutter chain.

Oakland, across the Bay Bridge from San Francisco, also has a unique history. Whole Foods' celebrated a major element of that city's history by building a store near the city's downtown that is designed like a European food hall, rather than like it's more typical format stores. The reason the grocer did this is the store's location sits right near a site that was a famous european-style food hall for decades, until there was a fire and the market, called Houswives Market, was eventually torn down. Despite this customization, Whole Foods still was able to use its basic format blueprint.

A Fresh & Easy in Oakland (there are three on tap thus far) need not be taken to this extreme in terms of localization--although Oakland loves its Whole Foods' Market Hall store. However, by not localizing the three stores to the history, culture and neighborhoods of Oakland, Tesco will likely decrease their odds of success with the stores in that city by at least 50% we believe.

Fresh & Easy needs some new direction

These are just a few examples of the direction we believe Tesco needs to go with its Fresh & Easy format and stores. There are a number of other suggestions we have based on lots of observation and research, but we will save those concepts and ideas for another time.

For now, using the Trader Joe's consumer demand phenomenon as a guide, it's our analysis that Fresh & Easy needs to do some serious evaluation of its format and operations, and to create more of a sense of place in the stores, localize the product merchandising mixes in the stores much better than they currently are, and institute a store design localization element, whereby the stores better reflect the history, culture and the present elements of the community and neighborhood they are located in.