Gentlemen ... Start Your Grocery Cart: Save Mart Supermarkets Goes 'Big' With 12-Foot High Motorized Shopping Cart

Touring the track on Sunday at the Toyota/Save Mart 350.

Northern California Market Region

Northern California's two leading supermarket chains - Pleasanton, California-based Safeway Stores, Inc. and Save Mart Supermarkets, which is headquartered in Modesto - have been thinking and doing "big" this month.

But the big thinking and doing has nothing to do about the fact the grocery chains are the number one - Safeway - and number two - Save Mart - market share leaders in Northern California.

Safeway Store's big thinking and doing was on display in San Francisco on Sunday, June 17, when the grocery chain broke the Guinness World's Record for creating the longest picnic table. We wrote about the "big" (or long) event in this June 19 story: Safeway Has A Picnic in San Francisco Featuring the 'World's Longest Picnic Table' to Showcase its 'Open Nature' Natural Foods' Brand


Kyle Bush and the giant Shopping cart in the winner's circle after Sunday's race.


12-foot high 'hot rod' shopping cart

Not to be outdone by its competition when it comes to "big" thinking and doing, earlier this year Modesto-based Save Mart hired a local company, BRE Rods & Classics, located in nearby Salida, California, to create the 12-foot high, "hot rod" shopping cart (pictured at top).

The cart, which some insiders are calling "Piccinini's Pride," in honor of Save Mart majority-owner, chairman, CEO and rabid auto racing fan Bob Piccinini, who commissioned the mean machine, was featured on Sunday at the NASCAR Toyota/Save Mart 350 auto race at Infineon Raceway in Northern California's Sonoma County.

Sunday's race, sponsored annually by Toyota and Save Mart Supermarkets, was won by Kurt Bush, who held off a late-charging Jeff Gordon to claim the first-place honor.

Save Mart's mega-motorized shopping cart, which is powered by a 454 Chevy engine sponsored by Watson Racing, which allows it to hit speeds of up to 100 miles an hour, according to Jim Brown of BRE Rods & Classics, got its inaugural debut in Modesto's annual "Graffiti Fest" parade on Friday evening, June 11. (You can see the Save Mart motorized shopping cart on a test run in the brief video below.)

The three day "Graffiti Fest" event, which is sponsored by the Modesto Kiwanis Club each year, pays homage to the movie "American Graffiti," which was made by Modesto native George Lucas of Star Wars fame, and chronicles the born-and-raised in Modesto movie producer-director's childhood, growing up in what the locals like to call the "Cruising Capital of the World."

Or at least Modesto was America's cruising capital. However, a number of years ago the Modesto City Council outlawed cruising on McHenry Avenue and J Street, the main drag where most of the action took place in Lucas' era (late 1950's-to-early 1960's) and in his movie, which is set in the early 1960's. As the famous line in American Graffiti says: "Where were you in '62?

Local boosters created the annual "Graffiti Fest" event, along with a series of other events throughout the summer, called "Graffiti Summer," as a way to celebrate the tradition, along with using it as a vehicle to increase tourism and encourage people to spent money with local businesses during the summer months.

Save Mart's big, hot rod shopping cart got a bit over-heated during its trial run in the June 11 "Graffiti Fest" parade, according to a longtime Modesto-area food broker and Fresh & Easy Buzz reader who was there, and had to be sidelined. A Save Mart executive confirmed that observation for us recently.

However, the crew at BRE Rods and Classics fixed the problem and "Piccinini's Pride" was in top shape at Sunday's Toyota/Save Mart 350 race in Sonoma County.

Sunday's big race isn't the last stop for the shopping cart. Save Mart's pit crew is taking the racing engine-powered vehicle to the California State Fair in Sacramento next.

After that the cart, which also made an appearance at one of Save Mart's Lucky banner supermarkets in Napa, California on June 23, will be featured at the annual "Hot August Nights" event in Reno, Nevada. Save Mart, like Safeway Stores, Inc., operates supermarkets in northern Nevada, as well as in Northern California.

The Save Mart "hot rod" shopping cart at the Crystal Springs Gold Course in Burlingame, California. The club's pro says course rules prohibit the shopping cart's use as a golf cart, even though it can hold a whole lot of golf bags. But he did let a photographer use the fairway to take a few "shots."

An American tradition

Creating "out-sized" things and events - giant displays in-store, parade floats, and even record-holding tables and giant shopping carts - is part of a long and historic tradition of thinking and doing "big" by U.S. grocers, as a way to not only promote their stores, but also to have plain fun.

It's good to see that Save Mart and Safeway Stores' are keeping that tradition alive - and are doing so in a "big" way.

Potential Guiness World Record?

Modesto, California-based Save Mart Supermarkets, which was founded over five decads ago by Bob Piccinini's father Mike and partner Nick Tocco, operates 240 stores in Northern and Central California and Northern Nevada under the Save Mart, S-Mart Foods, Lucky, Maxx Value (supermarkets) and FoodMaxx (discount warehouse format) banners, should contact the Guinness World Record people post-haste because a Guiness World Record might just be looking the grocer right in its eyes, so to speak.

Save Mart can't get the record for biggest/largest/tallest shopping cart. That record is already held - and at 34.4 feet high, from ground to handle, the world record-holding cart, which was made by the Al Safeer Group and Century Shopping Mall, and sponsored by Dubai UAE Duty Free, won the honors in February 2004 at the Dubai UAE Shopping Festival

But ... the record-holding shopping cart from Dubai has no motor.

Enter Save Mart's 12-foot high "muscle car-style" shopping cart, powered by the 454 Chevy engine.

Based on our research on the Guinness website, we think there just might be an opportunity for Save Mart to claim the title and honor of having the world's biggest, largest or highest (or all three) motorized shopping cart.

It's certainly worth checking out. After all, does Save Mart Supermarkets' (and its chief Bob Piccinini) really want to let Safeway Stores' have all the glory with its World's Longest Picnic Table, when it comes to Northern California-based grocery chains setting world records?

The grocery business is all about competition, right? So ... Bring it on.

Related Stories

June 19, 2011: Safeway Has A Picnic in San Francisco Featuring the 'World's Longest Picnic Table' to Showcase its 'Open Nature' Natural Foods' Brand

March 23, 2011: Tesco Opens First Fresh & Easy Neighborhood Market Store in California's Northern Central Valley Today - in Modesto

March 19, 2011: Preview: Fresh & Easy Neighborhood Market is Headed to Save Mart Supermarket's Hometown of Modesto

October 27, 2010: Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group

July 15, 2010: Just Like Mr. Rogers Did, Save Mart Supermarkets' Doesn't Just Talk the Talk, it Walks the Walk in the Neighborhood

Sunday Satire By Earl Grey: Soon to Be 'Ex-Governator' of California and Tesco's Fresh & Easy - A Match Made in Heaven?

By Earl Grey: Fresh & Easy Buzz's Occasional Satire & Humor Columnist

I have just two words - actually it's a famous name - for United Kingdom-based Tesco when it comes to promoting its Fresh & Easy food shops in California and nearby Nevada and Arizona: Arnold Schwarzenegger.

That's right, starting tomorrow the Austria-born body-builder, who then became a famous movie actor and celebrity, a position he used to become the two-term-Governor of California, is out of a job, replaced by another once two-term Governor, Jerry Brown.

And the change is just in time for Arnold - and the state - by the looks of California's poor economy, its high unemployment rate of over 12%, and its twenty-some billion dollar budget deficit. Some of the more optimistic residents around my new part-time residence in the Golden State say prosperity is just around the corner. But right now it's still looking and feeling to me a bit like the United Kingdom economically rather than like a place that's on the verge of entering a brave new economic world, at least in my neck of the woods, which I confess isn't Beverly Hills.

During his eight years in office, Governor Schwarzenegger took no salary, instead living off the tens of millions - and some say hundreds of millions - he made in Hollywood. He also paid for the cost, estimated to be about $6,000 a minute, it takes to fly his private jet back and forth from his home in Southern California to the state capital in Sacramento; doing so multiple times per week.

One thing is certain, you can say whatever you want about Arnold's performance running California - and much is being said about it - but what you can't say is that he made any money out of it. And, as a result of this fact, he needs a gig - and fast - in order to replenish the millions he spent out-of-pocket to support himself and his family in high style while serving as Governor of California for the last eight years. Not that he's hurting. But running California for eight years has been a personal money-loser for a man who's made a lot of it at everything he did before getting into politics.

A match made in Heaven?

Tesco, which has its Fresh & Easy food and grocery chain based in Southern California where it has about 106 of its 155 grocery markets, needs a hook to lure shoppers into its food shops. The soon to be former Governor of California needs a new gig. Therefore, I see a match made in Heaven.

The one thing Arnold has always been the best at - as a body builder, actor, businessman and Governor - is promotion, which from the looks of it is something Tesco needs a lot of for Fresh & Easy. And, even though his popularity rating as Governor haven't been too grand over the last year, once he's out of office, the great residents of the Golden State will take to loving Arnold in huge numbers once again, just like they did before he set foot in Sacramento.

It's just the way Americans treat their ex-politicians. Look at Bill Clinton, who was nearly impeached as President. Now he's a rock star. And even George W. Bush, who in his last term as President had an approval rating of about 22 percent, as low as it gets. Thanks to not speaking out in public much for nearly two years, plus a new book, "Bush 43," as they call him, is back in the high fifties and on his way to being thought of highly by 60% or so of the American public, after less than two years out of office. Were less kind in Britain. Just ask Gordon Brown.

It won't take the soon to be former Governor of California nearly that long to once again become a matinee idol - he too good at self promotion to let that happen. He's also not George W. Bush. Actually, he's more of a Bill Clinton in personality. Instead, mere months after Arnold leaves office, look for the "Terminator," who road into office eight years ago as part of the recall of then-Governor Grey Davis, to once again become the popular Californian he was before becoming Governor.

Tesco should take note of what I say. Sign Arnold up as the Fresh & Easy Neighborhood Market spokesman and pitch man before Walmart or Safeway get wind of my idea. He's a far better fit for Tesco's small food stores than he is for Walmart's mega-supercenters or Safeway's big supermarkets anyway. Arnold Schwarzenegger: A big man for a chain of small grocery stores.

I can see the once 'Governator' touting Fresh & Easy, beginning almost immediately.

For example, how about a television commercial where Arnold stands outside a small Fresh & Easy market, his big arms made to look like they're holding the store in them, and says: "I'm Arnold Schwarzenegger - and I'm here to 'Pump Up' Fresh & Easy?" His Austrian accent would also be a nice contrast to the British accent Tesco offers with its Fresh & Easy stores.

How about a YouTube video of the iconic Californian checking out his grocery purchases at one of Fresh & Easy's self-service checkout lanes? When the ex-Governor finishes checking out his groceries, he says: "Now that I have plenty of time on my hands, I love using the self-service checkout at Fresh & Easy," flashing his signature smile and ending with his trademark tag line: "Ill Be Back...To Fresh & Easy?" Arnold could also add in the video spot he loves self-checkout so much that as Governor he vetoed a bill that had he signed it would have ended self-service checkout at Fresh & Easy. You can read all about that here. Without a doubt, the video would go viral, as the kids say.

The promotional opportunities are unlimited. How about a line of "Arnold" brand energy bars (with his mug on the label), energy drinks, smoothies and other health and fitness related products exclusive to Fresh & Easy - and promoted by the man behind the private brand, Arnold Schwarzenegger. Talk about a "point-of-difference," as the grocery industry and brand management types like to call it.

Then there's product placement promotion. It's possible Arnold will star in another "Terminator" movie. Remember, he said he would be back. Also remember he needs to replenish his bank account after eight years in office. With Arnold as the spokesman for Tesco's Fresh & Easy, it would be a given that one or more of the little Fresh & Easy markets would make an appearance in what would be a huge box office blockbuster. Perhaps the script of the movie could even be written in a way that makes Fresh & Easy a hero in the film? Tens of millions of viewers. Positive placement. All because of Arnold.

It's all about what I like to call the "Arnold all over" campaign - on billboards, on the radio for Fresh & Easy, "guest-tweet" appearances on the Fresh & Easy Neighborhood Market Twitter feed, store visits - and on-and-on. If the message is truly the medium, then Arnold would be the message for Fresh & Easy. All Arnold, all the time. Done with taste of course.

Even if Tesco seizes the opportunity I've laid out for it, Arnold will still have to say yes to becoming the chief spokesman and pitchman for Fresh & Easy. And you can bet the offers have already started rolling in for the man spending his last night as the chief executive of the nation state of California, home to nearly 40 million people and the sixth-largest per-capita economy in the world, nearly as big as that of the entire United Kingdom.

My suggestion: Bring in the man with stature and the charm, Tesco CEO Sir Terry Leahy, who's retiring as Tesco's chief executive in March of this year.

Fresh & Easy is Sir Terry's baby. He launched it in 2006 but isn't going to see it become profitable during his tenure, if ever. But Sir Terry, who's the rock star of retail in Britain, and a man who can talk chief executive-to-chief executive with Arnold, as well as respective rock star-to-rock star, could seal the deal, without question. It would be Sir Terry's last big hurrah. And perhaps the best parting chance he has to help Fresh & Easy succeed in America.

It's pure magic, I tell you. Arnold Schwarzenegger, the Austrian immigrant, who has come to symbolize the American Dream, teamed up with the huge British retailer, Tesco, that wants a piece of the American Dream with its Fresh & Easy Neighborhood Market grocery chain. The big guy - Arnold - embracing the little Fresh & Easy markets against a world, or at least a California, Nevada and Arizona, of huge hypermarkets and supermarkets.

[Editor's Note: After a long but undeserved hiatus, our sometime satire and humor columnist, Earl Grey, has favored Fresh & Easy Buzz with a new submission to start off 2011. In a long e-mail explaining his hiatus, Earl, who over the past few years has divided his time between a flat in London and a home in Lake Havasu City, Arizona, where the original London Bridge was moved many years ago to serve as a tourist attraction, informs us that among other things, he' sold his winter home in Lake Havasu City in a "short sale" and has now bought a small winter home in California, which he says he got for a "steal" in a foreclosure sale. Since it's the start of a new year and his column topic is well-timed, even though it's been nearly a year since we've had a submission from Earl, we've decided to forgive him for his long absence, restore his byline on probationary status, and run his contribution. Note: The column is satire, or an attempt at it.]

A couple past columns by Earl Grey

January 29, 2009: Earl-Grey-At-Large: Fresh & Easy Buzz's Sometime Humor Columnist Drops in For A Bit Of Pre-Super Bowl Musing On 'Carnivores' V. 'Vegetarians'

November 27, 2008: Earl Grey Returns for the Holiday: Thanksgiving With A Slice of 'Rye'

Safeway Wants to Grow its Online-Home Delivery Grocery Business - And is 'Giving Away the Store' to Prove it

Can Safeway Stores, Inc. convince grocery shoppers to go online by making them an offer that's hard to refuse?

Pleasanton, California-based Safeway Stores, Inc. is aggressively courting new customers for its Safeway.com online food and grocery ordering-home delivery business by making them an offer that's hard to refuse. That offer: The grocery chain is tempting first-time Safeway.com users with a promotion that includes $15-off purchases of $50 or more, along with free delivery. If a shopper orders the minimum dollar amount required, that's a whopping savings of 30% - plus free delivery - off their $50 grocery purchase. Safeway charges from $6.95-$9.95 for orders under $150, depending on the time slot in which it's delivered.

The $15-off online coupon code voucher is in addition to any online manufacturers' coupons or Safeway Club Card deals a first-time cyber-customer might use.

Safeway has been offering the promotion in the markets where if offers online ordering and home delivery - the San Francisco Bay Area, metro Sacramento and the coastal Monterey-Salinas region in Northern California; Portland, Oregon; metropolitan Seattle, Washington; metro Phoenix, Arizona; Maryland; Washington D.C.; and metro Philadelphia - nearly every week since August of this year.

The promotion works like this: Safeway runs a banner ad or similar advertisement in its weekly advertising circular (see the ad at top) in which it promotes the $15-off purchases of $50 or more discount and free delivery for first time Safeway.com customers, as well as running the ad on its website and social media sites at times. The advertisement includes a promotional code, which the first-time cyber-shopper types into a box on Safeway's online grocery ordering site. The system gives the customer the discount plus a free delivery credit. If a shopper has used the online ordering and home delivery service in the past, the system will reject the deal because it keeps a record of all previous customers.

Giving away the store

The fact Safeway Stores is nearly giving away its gross margin on the promotion, along with eating the cost of delivery - which combined makes it basically a money losing proposition - demonstrates two key things when it comes to the grocery chain and its home delivery service.

First, Because its one of the few major grocery chains in the U.S. doing online ordering-home delivery, it sees the potential to grow the business significantly as a major point of difference via-a-vis its competitors, as well as potentially being a cost-effective niche-oriented way to grow its business overall. Online grocery shopping would have to grow by leaps and bounds in the U.S. in order for it to become a major revenue source for Safeway - or for any other U.S. supermarket chain.

Secondly, Safeway needs to grow its Safeway.com customer base in all of its markets - some much more than in others - to make it more cost-effective. That's why, in part, it's been offering such an aggressive promotion for first-time customers, hoping to give them a low-cost first-taste, then hook them, or at least have them use the service every so often, along with shopping at the grocer's stores.

Safeway's cyber-grocery beginnings

In the late 1990's, when the first dedicated online-home delivery grocers and supermarket-based operations like Safeway's popped up, many members of the media, along with numerous supermarket industry analysts and pundits, were predicting cyber-grocery shopping with home delivery as the next revolution in the business.

Safeway's original online-home delivery operation was called Grocery Works. It was a partnership between the supermarket chain and United Kingdom-based Tesco, which owns and operates Fresh & Easy Neighborhood Market, which has 155 stores in California, Nevada and Arizona, and is launching into Safeway Stores' home market of Northern California early next year.

Tesco was the first supermarket chain in the world to create an online grocery store with residential delivery, which it started in the mid-90's in the UK. In the UK Tesco also offers clothing, furniture, consumer electronics and other general merchandise on its online site, similar to Walmart.com in the U.S. The products are shipped to homes via carrier though. Only food and groceries and related non-foods packaged goods are delivered by the retailers directly to residences.

Ironically, Tim Mason, who is the CEO of Southern California-based Fresh & Easy, as well as being a corporate director of Tesco, headed up Tesco's online-home grocery delivery creation and launch as a marketing manager at the chain's UK headquarters at the time.

The Safeway Stores-Tesco Grocery Works joint-venture (Safeway was the majority owner) didn't last long - about long enough for Safeway to go to school on what was a primarily Tesco creation from a technological standpoint, since it was already operating an online/home delivery business in the UK. After less than two years, Safeway bought out Tesco's share, killed the Grocery Works name, and brought the operation in-house, branding it with the Safeway name.

Safeway Stores fulfills the online orders from a series of dedicated Safeway supermarkets in each region rather than using centralized distribution centers. The dedicated stores - there are numerous such units in each of the market regions where Safeway offers its home delivery service, have an area in the backroom where the orders are processed, scanned at a checkout counter and stored for pick up.

A typical order fulfillment scenario works like this: The Safeway.com centralized computer system routes an online shopper's order to the dedicated Safeway store closest to his or her residence. A store clerk then downloads the order and shops for it in the store. Once the order is picked, the clerk then scans it in the back room, bags it, tags it with the customers name and address, and moves on to the next order. All perishables are kept refrigerated or frozen in the store back rooms. Delivery trucks pick up the orders at the dedicated stores for delivery to the customers' homes. Shoppers pay for the groceries with a debit or credit card when they place the order.

Remembering Webvan

The primary reason Safeway went the joint-venture route in the late 1990's with Tesco was because it needed expertise fast, most specifically in its home Northern California market, where at the time Louis Borders, the founder of the Borders Books book store chain, had earlier announced his plans to "revolutionize" grocery shopping the way Borders revolutionized book retailing - except via the Internet and home delivery rather than with a chain of brick-and-mortar book stores - by creating what he called the "Amazon.com" of food retailing - which he named "Webvan." And, Borders said at the time, Webvan would start in Northern California's San Francisco Bay Area, where Safeway is based, and then spread over a period of a few years to at least 26 major metropolitan market regions in the U.S. Tesco had that expertise.

At its high point, at least expansion-wise, Webvan operated in the following U.S. metropolitan market regions: the San Francisco Bay Area; Sacramento, Los Angeles, Orange County and San Diego in Southern California, Portland; Seattle; Dallas; and Atlanta. San Diego.

Webvan gained some of these markets when it bought out rival dedicated online grocer HomeGrocer, which went bankrupt, in June of 2000.

Borders invested millions of dollars of his own money, a small part of his take from the sale of Borders Books, in Webvan, and raised over a billion dollars from investment banks like Goldman Sachs, Silicon Valley venture capital firms Benchmark Capital, Sequoia Capital and Softbank Capital, private investors and companies like Yahoo, which was involved in an online advertising partnership with Webvan as part of its investment.

Webvan, which had its corporate headquarters in Foster City on the San Francisco Peninsula, build a massive (about 1 million square-feet) distribution and order fulfillment center near the Oakland, California airport, hired the best and the brightest from Silicon Valley to create a high-tech online grocery store, invested in the best Sun Micro Systems servers and other high-tech equipment available at the time, had state-of-the art delivery trucks custom-built, spent tons of money on marketing - and launched in the late 1990's.

Jut a few years later, in 2001, the "Amazon.com" of food and grocery retailing - Webvan offered everything on the site that a big brick-and-mortar supermarket offers - went bust, filing bankruptcy and closing the business.

Loses were in the $1 million- $1.5 billion range. Numerous creditors were left hanging, owed mega sums of money. Some creditors received a few pennies on the dollar from the sale of Webvan's trucks and other equipment. Others nothing. The Oakland distribution center was torn down and everything was sold, including half a million dollars worth of custom-made plastic totes the company used to deliver the groceries in, in an attempt to pay those pennies on the dollar to the creditors.

Ironically, Amazon.com bought what was left of Webvan. But not for much money. But it was the start of Amazon's online grocery products offering, as well as the infrastructure for the online-home delivery business it operates today in the Seattle, Washington area, where it's headquartered.

Back to the future

A little over a decade since it launched its online grocery business, Safeway Stores is doing the most aggressive promotion - the $15 off, free delivery new customer deal - and for the longest period of time, we've seen the grocer conduct in many years.

It's a gamble - many shoppers will take advantage of the promo for the big one-time savings, and never use it again.

But Safeway is the only one, or basically one of two players, in the markets where it operates Safeway.com. If it can grow that business, say 8-10% a year for the next decade - and if in those ten years online grocery ordering with home delivery becomes more popular in the U.S., say getting closer to how much it's grown in the United Kingdom over the last decade, it could become a nice little piece of business for Safeway Stores, Inc.

After all, in the UK the nation's top three food and grocery retailing chains - Tesco, Walmart-owned ASDA and Sainsbury's - all operate successful online grocery stores with home delivery. However, after many years of growth, cyber-grocery shopping is essentially flat in the UK.

There are no current indications, in our analysis, that a major growth spurt in the online-home delivery food and grocery segment is on the near-horizon in the U.S. However, that doesn't mean Safeway can't build on its existing business through promotions like the current one and others.

But the proof in the online-home delivery pudding for Safeway Stores, Inc. will be in retaining those first time Safeway.com online cherry pickers. Will they return after getting a hot deal the first-time around? In our analysis only a very small percentage of those first time users will likely use the service a second, or third, time around. But if the universe of trial users created by the hot, multi-month promotion is big enough, it could be worth it for Safeway.

In the meantime, it is Christmas week. Therefore, if you live in one of the market regions where Safeway offers its Safeway.com online ordering and home delivery grocery service, and where it's currently offering the $15-off orders of $50 or more promotion, we know how and where you can get a $50 Prime Rib Roast for Christmas dinner for $35 - and have it delivered to your front door for no extra charge to boot.

Beverage Company Reed's and Fresh & Easy Neighborhood Market Launch Month-Long Cooperative Radio Advertising Campaign

Listen to the Reed's/Fresh & Easy 30-second radio spot here.

Promotions & Promotional Merchandising

Los Angeles, California-based beverage and natural products company Reed's, Inc. has launched a cooperative radio advertising campaign in Southern California in partnership with Tesco's Fresh & Easy Neighborhood Market for its Reed's Ginger Brew and Virgil's Root Beer.

The radio advertisement is a 30-second spot focusing on a new in-store promotion at Fresh & Easy Neighborhood Market to support literacy. Winners get books donated to their public schools of choice.

The radio advertising campaign, which is a first for Reed's, runs October 27-November 23 on Clear Channel's Los Angeles 104.3 MYfm radio station.

Chris Reed, founder and chairman of Reed's, Inc., says he hopes the radio campaign will reach four million listeners via Clear Channel 104.3 MYfm during its nearly month-long run.

"This is the first time we will advertise our brands on the radio. We’re thrilled to be working with Fresh & Easy and Clear Channel Communications, the largest radio station owner in the U.S. for this media campaign, Reed says. "We are highlighting our relationship and a program with Fresh & Easy Neighborhood Market. Their focus on quality and freshness is a perfect fit for Reed’s and Virgil’s all natural beverages with their refreshing, delicious and wholesome great taste. We’re excited to be working with Fresh & Easy as they position themselves to become one of the top supermarket retailers in the United States."

Displays in selected Fresh & Easy stores feature the free books for school promotion, which is being touted in the Reed's/Fresh & Easy radio spot. (Listen to the spot using the link at the top.)

The free books for schools promotion ties-in with Fresh & Easy's 'Shop for Schools' program, which is currently going on in all the retailer's stores.

Reed's, Inc. brews six flavors of its Reed's Ginger Brew soda: Original, Extra, Premium, Raspberry, Cherry, and Spiced Apple. There are four varieties of Virgil’s soda's: Root Beer, Cream Soda, Black Cherry Cream Soda and Real Cola Connoisseur.

The company also makes and markets a variety of other beverages products, including: China Cola, Sonoma Sparkler, Energy Elixir, Reed’s Rx. Reed's also produces and sells Ginger Candy and Ginger Ice Cream.

Reed's Ginger Brew and Virgil's sodas were introduced in the 168 Fresh & Easy stores in California, Nevada and Arizona in August.

The cooperative radio advertising campaign, which is funded by Reed's, along with the in-store free book promotion, is a good example of leveraging external media, in this case radio, with in-store promotional merchandising, which is something we first started suggesting Tesco's Fresh & Easy needs to do on a regular basis about a year and a half ago. (See the stories linked at bottom.)

Beginning this year Fresh & Easy has been doing just that, conducting promotions, including leveraging various media sources with in-store promotional merchandising on a much greater scale than it did in 2008 and 2009, which we've noted in a number of stories in Fresh & Easy Buzz, like those linked below.

Related Stories

October 2, 2010: Fresh & Easy Neighborhood Market and American Express Launch October In-Store Promotion

August 2, 2010: Arizona 'Tweeps' Treasure Hunting in Fresh & Easy Neighborhood Market's Twitter-Trivia Contest

July 19, 2010: Twitter Trivia + In-Store Treasure Hunt Promo Next Up On the 2010 Promotional Hit Parade at Fresh & Easy Neighborhood Market

June 23, 2010: Integrated Retail & Twitter Wine Promotion Rates Fresh & Easy Neighborhood Market A Gold Medal

February 8, 2010: 'I Taste Therefore I Tweet': Fresh & Easy Set to Hold 'Twitter (Wine) Tasting' Tomorrow Night

May 11, 2010: Fresh & Easy Neighborhood Market Promotion Benefits America's Wounded Warriors

April 19, 2010: Tesco's Fresh & Easy Joins Kroger Co. in Holding Earth Month-Earth Day Reusable Bag Design Contest

June 17, 2010: Fresh & Easy Neighborhood Market Picks Eight Finalists in its Reusable Bag Design Contest; Website Voting Through June 30

March 23, 2010: Fresh & Easy Kicks Off Three Week 'From Grapes to Gold Medals' Wine Promotion Tomorrow

April 25, 2010: Thousands Get 'Cheesy' at Fresh & Easy Neighborhood Market Co-Sponsored Grilled Cheese Competition in Los Angeles (Note: This promotion was initiated by a Fresh & Easy store manager.)

June 7, 2010: 'Bigmista' Hits the Stores in Fresh & Easy Neighborhood Markets' Free Barbeque Road Show

July 9, 2010: 'Bigmista' Hits the Road Again For Fresh & Easy Neighborhood Market's Free Neighborhood BBQ Road Show

September 16, 2010: Fresh & Easy Neighborhood Market Launches 2010 'Shop for Schools' Program; Shopping Nights Add Foot Traffic & Sales

Fresh & Easy Neighborhood Market and American Express Launch October In-Store Promotion

Promotions & Promotional Merchandising: News/ Analysis/Commentary

Tesco's Fresh & Easy Neighborhood Market and American Express have launched an October promotion at the grocer's 168 stores in California, Nevada and Arizona, in which customers who purchase at least four 'fresh&easy' private brand items as part of a minimum single total purchase of $50 will get a $10 credit on their American Express credit or charge card billing statement.

The promotion doesn't apply to debit cards. The $10 credit, for those shoppers who use their American Express cards, amounts to a 20% discount off of the minimum $50 grocery purchase. Alcoholic beverage purchases are exempted from the $50 minimum.

Customers receive the credit from American Express four -to- eight weeks after the promotion ends, which is on October 31, 2010. Additionally, Fresh & Easy customers/American Express credit card-users are limited to just one $10 credit during the promotional period.

The new in-store promotion is the most recent in a series of in-store promotions Fresh & Easy Neighborhood Market is conducting this year, which was something we suggested first in 2008 and again in 2009 the fresh food and grocery chain needed and needs to be doing to create excitement and drive sales in its stores.

Directly or indirectly, Tesco's Fresh & Easy has taken our advice. For example, below is our extensive coverage and analysis, along with commentary at times, of the grocer's most significant promotional and promotional merchandising activity thus far this year:

>August 2, 2010: Arizona 'Tweeps' Treasure Hunting in Fresh & Easy Neighborhood Market's Twitter-Trivia Contest

>July 19, 2010: Twitter Trivia + In-Store Treasure Hunt Promo Next Up On the 2010 Promotional Hit Parade at Fresh & Easy Neighborhood Market

>June 23, 2010: Integrated Retail & Twitter Wine Promotion Rates Fresh & Easy Neighborhood Market A Gold Medal

>February 8, 2010: 'I Taste Therefore I Tweet': Fresh & Easy Set to Hold 'Twitter (Wine) Tasting' Tomorrow Night

>May 11, 2010: Fresh & Easy Neighborhood Market Promotion Benefits America's Wounded Warriors

>April 19, 2010: Tesco's Fresh & Easy Joins Kroger Co. in Holding Earth Month-Earth Day Reusable Bag Design Contest

>June 17, 2010: Fresh & Easy Neighborhood Market Picks Eight Finalists in its Reusable Bag Design Contest; Website Voting Through June 30

>March 23, 2010: Fresh & Easy Kicks Off Three Week 'From Grapes to Gold Medals' Wine Promotion Tomorrow

>April 25, 2010: Thousands Get 'Cheesy' at Fresh & Easy Neighborhood Market Co-Sponsored Grilled Cheese Competition in Los Angeles (Note: This promotion was initiated by a Fresh & Easy store manager.)

>June 7, 2010: 'Bigmista' Hits the Stores in Fresh & Easy Neighborhood Markets' Free Barbeque Road Show

>July 9, 2010: 'Bigmista' Hits the Road Again For Fresh & Easy Neighborhood Market's Free Neighborhood BBQ Road Show

>September 16, 2010: Fresh & Easy Neighborhood Market Launches 2010 'Shop for Schools' Program; Shopping Nights Add Foot Traffic & Sales

Fresh & Easy's level of promotional activity so far this year is already more than double its 2009 activity.

This is important, and the reason why we highlighted the grocer's lack of promotions in 2008/2009 and suggested it needs to do just what it's doing promotion-wise (regular and varied in-store promos), because even though Fresh & Easy is owned by mega-United Kingdom-based Tesco, it's a start up chain in California, Nevada and Arizona and therefore essentially remains an unknown retail brand.

Tesco continues to lose $200 million-plus a year with Fresh & Easy, which adds impetus to the grocer's most immediate need, which is to increase sales - higher margins and profits will have to come later, although the clock is ticking rapidly to achieve both - which creative and aggressive promotions and promotional merchandising can help achieve.

Varied and regular creative promotions and merchandising-oriented promotions are key for grocers, including those with extremely established retail brands, because they not only help over time to build retail brand, they also create excitement in the stores and drive shoppers to the stores in the short and medium run. For Fresh & Easy, which as job one needs sales and needs to build a base of shoppers who use the stores as primary and secondary food and grocery shopping venues rather then merely using the stores as tertiary or occasional places to shop, such promotional and promotional merchandising programs are therefore even more important.

In the current down economy we aren't sure if a promotion like the American Express $10 credit October event will drive much added business into the stores or increase sales significantly - although the $50 minimum to get $10 back might increase some shopper market basket sizes - because those consumers who can afford to charge on their cards right now probably aren't that concerned about saving the $10, while those shoppers who most need to save the $10 probably either don't have an American Express credit card or if they do are close to or have already maxed out on their credit limit.

But what's key for Tesco with Fresh & Easy is two-fold: (1) Keep trying a variety of different types of promotions - experiment - because there's no better way to find out what works best than by trying it, within reason of course, and (2) Continue with a regular schedule of in-store promotions as a way to try to create excitement around the stores and the brand, drive shoppers into the stores, and hopefully for the grocer increase sales and average customer market basket sizes in the process.

Fresh Buzz - News & Notes About Tesco's Fresh & Easy Neighborhood Market: Fresh & Easy to Give $131,145 to Area Schools

Breaking Buzz: Tesco's Fresh & Easy Giving Out $131,145 to Southern California, Las Vegas and Arizona Schools: Proceeds of 'Shop for Schools' Fundraising Program-Promotion

Fresh Buzz has learned that the 494 Kindergarten through eighth grade schools in Southern California, Arizona and Metro Las Vegas, Nevada that participated in Fresh & Easy Neighborhood Market's "Shop for Schools" fund-raising program and promotion for public schools have raised a combined total of $131,145.

According to Tesco's Fresh & Easy, 322 elementary schools in Southern California participated in the fund-raising program, along with 86 schools in Arizona and 86 schools in Nevada.

Under Tesco Fresh & Easy's "Shop for School's" school fund-raising program, which ran from February 1 -to- March 31, 2009, the grocery and fresh foods chain pledged to donate $1 for every $20 a customer spends at a Fresh & Easy market during the program time period.

The participating schools can us the money they get from the program to purchase supplies and other needed items for their respective schools.

Kindergarten through eighth grade schools located within a three-mile radius of any Fresh & Easy store were invited to participate in the "Shop for Schools" program.

[Read our December 17, 2008 story for additional details: Fresh & Easy Neighborhood Market Launches 'Shop for Schools' Fund-Raising Program to Aid Schools Near its Stores.]

According to Tesco's Fresh & Easy, the participating Southern California-based schools raised a total of $81,724 during the February 1 -to- March 31 period. Mountain Meadows Elementary School in Moorpark, California was the top fund-raising school in Southern California.

Participating schools in Arizona raised $18,498. The Anasazi Elementary School in Scottsdale, Arizona was the top fund-raising school out of all of the schools in the state that participated in the "Shop for Schools" program.

And the participating schools in the Las Vegas, Nevada Metropolitan region raised $30,923 in the fund-raising program and promotion. Hayes Elementary School in Las Vegas, Nevada was the top fund-raiser in southern Nevada.

Besides getting all of the they money raised, the top three fund-raising schools mentioned above are each getting a $5,000 bonus donation, according to Tesco's Fresh & Easy.

Staff, students and parents of the participating schools encouraged friends and family to shop at Fresh & Easy stores from February 1 -to- March 31 through a variety of ways, including word of mouth, making posts on Blogs and social networking sites, and holding events, explaining that for every $20 spent at a Fresh & Easy market the grocer would donate $1 to their respective schools.

Store customers could designate to Fresh & Easy store-level employees the specific school where they wanted the $1 per $20 purchase to go, which most did.

Out and about

Fresh Buzz has also learned that members of Fresh & Easy Neighborhood Market's senior management team are out and about today presenting checks, including the $5,000 bonus checks, to the top-three schools: Mountain Meadows Elementary School in Moorpark, California; Anasazi Elementary School in Scottsdale, Arizona; and Hayes Elementary School in Las Vegas, Nevada.

Tesco's Fresh & Easy currently operates 120 small-format (10,000 -to- 13,000 square-foot), convenience-oriented combination grocery and fresh foods markets in California (Southern and Bakersfield), Metropolitan Las Vegas, Nevada and in the Phoenix Metro region in Arizona. There are 61 Fresh & Easy stores in Southern California and three in Bakersfield. The remaining 56 units are split about evenly between Metro Las Vegas and Metro Phoenix.

Fresh Buzz salutes Tesco's Fresh & Easy and all of the parents, school staff and students who raised a nice chunk of change through the grocer's "Shop for Schools" program so that the participating schools can have some needed extra money to buy supplies and other items for their schools -- items that they might not otherwise be able to afford.

Grocers and community

Numerous other grocers have and are conducting school fund-raising programs similar to Fresh & Easy's "Shop for Schools."

U.S. food retailers -- chains and independents -- conduct such programs not just as promotions designed to bring in additional sales, but because most understand that they are, just like schools, an integral part of the fabric of society, community and neighborhood.

Fresh Buzz thinks that's a good thing.

[Readers: Follow Fresh Buzz and Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]

A 'Newsworthy' News Release - But Not For the Reasons They Might Think: Tesco's Fresh & Easy Reinvents Multiple-Item Pricing in America; Good Luck!

Tesco's Fresh & Easy Neighborhood Market distributed the news release reprinted below (in italics) yesterday.

Buy More and Save at Fresh & Easy

Multi-buy discount introduced today

EL SEGUNDO, Calif., April 15 /PRNewswire/ -- With customers looking for ways to stretch their budgets, Fresh & Easy Neighborhood Market today launched a new multi-buy discount on a variety of products that will rotate every few weeks. The more customers buy, the more they can save, allowing customers to buy larger quantities for less.

"Customers are telling us they are increasingly looking for ways to stretch their budgets because times are tight," said Simon Uwins, chief marketing officer at Fresh & Easy. "Fresh & Easy's new multi-buy promotion will help customers save when they buy more, so they can feed their families for less money."

A few of the products that launched Fresh & Easy's new multi-buy promotion(1) include:

>fresh&easy Tea Bags, all varieties (20 Count) - Any 2 for $3
>fresh&easy Marinades, all flavors (12.25 fl oz) - Buy 2 Save 50-cents
>fresh&easy Sliced Bacon (12 - 16 oz) - Any 2 for $6
>fresh&easy Sliced Bread (24 oz) - 2 for $5
>fresh&easy 4 Count Apples (Fuji, Red Delicious, Granny Smith and Gala) - Buy 2 for $3
>fresh&easy non-fat and low-fat yogurt, all flavors (8 oz) - Any 6 for $3
>Pampers Dry Big Packs (Sizes 3 - 5) - Any 2 for $40
>Cesar Dog Food - Buy 5 Save 50-cents

Customers now can also save 20% when they buy three or more fresh&easy prepared meals labeled with a "Buy More and Save" sticker. Fresh & Easy's prepared meals are made fresh daily in the company's kitchen, and are developed by a team headed by Fresh & Easy's Chef Mike Ainslie. Like all Fresh & Easy brand products, these meals contain no artificial colors or flavors, no added trans fats and only use preservatives when absolutely necessary.

Earlier this year, following increased customer interest, Fresh & Easy added bigger packs to stores including diapers, laundry detergent, produce, and cereals. The company also introduced larger-sized freshly prepared meals that feed four people for only $8.

More information regarding Fresh & Easy Neighborhood Market can be found at www.freshandeasy.com. Photos available upon request.

(1) Customers must purchase multiples as indicated to receive the discount. Single items purchased at the everyday low price.Website: http://www.freshandeasy.com/

As you can see by reading the news release, basically what Tesco's Fresh & Easy is announcing is that it is doing some multiple-item ("two-fer", "three-fer") pricing on a selected number of food, grocery and packaged goods items that will rotate every few weeks.

This -- multiple pricing -- is something grocers in the U.S. have been doing for ages.

We asked an 88-year old retired grocer we know (he retired at age 77), who spent his entire (very successful) career -- beginning as a box boy at age 10 -- in the food and grocery retailing business in the U.S., including four decades in the Western U.S., about how long he thought multiple-item pricing has been around. He says he remembers multiple-item pricing being around when he first started in the business. Or to quote him: "I first remember multiple pricing existing at about the time when I needed two milk crates to get high enough at the checkout counter in order to box groceries." (Notice he said box, not bag.)

In other words, the news release isn't all that newsworthy; at least not from the news angle Tesco's Fresh & Easy thinks it is.

But we happen to think the news release is extremely newsworthy... for what its news angle or peg isn't however.

Read the sentence here in italics, (its the very last one in the news release in bold above): (1) Customers must purchase multiples as indicated to receive the discount. Single items purchased at the everyday low price.

What this means is that if a shopper buys only one of any or all of the multiple priced items -- say the fresh & easy tea bags priced at 2 for $3, for example -- then instead of getting her one box of tea bags for $1.50, like she gets the item for at every other store in the United States that uses multiple pricing, instead she will pay the regular price for the tea bags. Let's say that price is $1.99. In other words, she only gets the deal if she buys the quantity of the item(s) Fresh & Easy wants her to. It's a forced choice. In fact, that's a good name for the pricing scheme: "Forced-choice multiple pricing."

In other words, Tesco's Fresh & Easy is reinventing the food and grocery industry retail pricing in the United States.

It appears the retailer is attempting to get shoppers to buy more than one item on a variety of SKUS, which is fine so far since that's the primary goal of multiple item pricing strategies. But (and it's a Big But) Tesco has decided to attempt to achieve this objective by forcing the shopper to buy the multiples (two boxes of tea bags, two bags of dog food; 6 yogurt cartons, ect.) in order for the customer to get the item(s) for the price-point it has set for the SKU's. 'Want your fresh & easy sliced bread for $2.50 (2 for $5), buy two then. Only want one, it will cost you $2.99 or $3.19 -- the regular price.'

When American shoppers see "two-fer pricing" -- two 12-packs of Coke for $6.99, two loaves of sliced bread for $5 -- they know based on learned shopping behavior that they can buy one instead of two (or three or four if that's the multiple) and still get the promotional price. In the Coke example that would be one 12-pack for $3.50. The sliced bread: one for $2.50.

This is a shopper expectation. The expectation has been created by decades of U.S. supermarket industry convention. It's how pricing is done in U.S. supermarkets and discount stores: Wal-Mart, Target, Safeway, Kroger...on and on. See a 16oz package of sliced bread at $2 for $5 at any of these chain's stores but only want one loaf? No problem. It will cost you $2.50 -- not the "regular price."

American retailers know shoppers don't like to be forced to buy more quantities of a particular item (SKU) than they want to. That's why the retailers who use multiple-item pricing as part of their everyday and promotional retail pricing strategies offer the everyday or promotional price multiple to customers (whatever fraction one unit equals) even if they buy one item instead of two...or three or four. Buy one can of 8oz tomato sauce priced at 4 for $1...you get it for 25-cents, not its regular price, which could be say 39-cents.

We think Fresh & Easy is in for trouble trying to reinvent how multiple-item pricing is done in American food retailing. Even retail giants like Wal-Mart have a hard time going against such accepted convention. And it's not just accepted convention because it's convention. It is because it's a fair deal to most shoppers. 'Don't tell me I can have it for $6 but that I have to buy three in order to get that price,' they just might say. 'Just price the item at $3 and I will buy as many as I need or want; thank you Mr. grocer.'

And we feel sorry for the Fresh & Easy store-level employees who will be explaining to customers over and over why if they buy just one box of the fresh & easy tea bags that are priced 2 for $3 it is going to cost them whatever the regular price is rather than half of $3 ($1.50) like it costs them at Ralphs, Vons, Safeway, Bashas, Wal-Mart, Albertsons, Fry's, Smiths, Stater Bros., Trader Joe's, Whole Foods, Gelsons...and all the other food stores in California (Southern and Bakersfield), southern Nevada and Metropolitan Phoenix, Arizona, the three states where Tesco has its 118 Fresh & Easy markets in. We might add, that's how it is throughout the United States as well, in total.

A store-level scenario we see playing out:

65 year old retired female shopper (could also be 21 year old single male, female, for that matter): (Speaking to the Fresh & Easy store clerk)...Sir, when I scanned the fresh & easy tea (self-checkout only at Fresh & Easy but clerks assist if asked) that's on special at 2 for $3.00 it charged me $1.99 (hypothetical regular price) instead of the $1.50 (half of $3.00). There is a mistake!

Fresh & Easy store clerk: Let me take a look and help you Ms. How are you today, by the way? Ms., you only have one box of tea, that's why you were charged the $1.99 instead of the 2 for $3.00.

Shopper: Yes, I know I have just one box. That's all I need. I live alone and one box will last me for a month or two. If I buy more than one box at one time it gets stale. But half of $3.00 is $1.50, so I think the machine made a mistake?

Store clerk: Well...Ms. you have to buy two boxes of tea in order to get the price of 2 for $3.00.

Shopper: (who happens to have a Masters Degree in math): Yes, I know if I buy two it's $3.00. But I bought one, so it's $1.50. I just bought one each of three different items priced at Ralphs at 2 for $5.00. They cost me $2.50. Then I went down the street to Vons and bought some items (one only of each) that were priced 2 for $4.00. They cost me $2.00. Then yesterday I bought a different type of tea over at Albertsons. It was priced 2 for $3.00 just like this one. It cost me $1.50. So, I don't get it (wondering if it was worth getting the advanced math degree).

Store clerk: Ms. -- Between you and me...I don't get it either. But...let me try explaining it this way...

You get the point.

When many of the shoppers find that they have to buy the full multiple quantity (a forced choice) of the item in order to get the price, they are going to be unhappy.

So you see...the news release is newsworthy, in our analysis, which is based on a bit of experience in the pricing world. It's just not newsworthy from the perspective Tesco's Fresh &Easy thought it was when it issued the release yesterday.

In our analysis and opinion this "promotion" is another example of Tesco's failure to understand its Fresh & Easy stores are in the Western U.S. and not in Britain. You just can't force-feed a foreign food and grocery retailing model into another country and its food retailing culture and practices, no matter how big of a retailer you are.

As the wise Cultural Anthropologist says, when you play in another culture, it's best to observe that culture's practices, particularly the successful members of that given culture.

Safeway, Wal-Mart, Kroger....they do what they do vis-a-vis multiple pricing -- give the customer the price regardless of how many packages they buy -- for a reason: it works better than trying to force shoppers to buy the number of units of an item the retailer wants them to.

Of course we could be wrong. But experience tells us we aren't.

[You can follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]

A Fresh Freebie: Tesco Fresh & Easy Offering Online Coupon Good For Free Reusable Canvas Shopping Tote Bag

Tesco's Fresh & Easy Neighborhood Market is offering a "Twitter.com exclusive" online coupon good for a free reusable canvas bag with a food and grocery purchase of $10 or more in its stores.

The offering is for a limited time. The coupon expires on March 31.

The online coupon can be downloaded at the link below:

[Link: Coupon for free canvas bag. http://budurl.com/x5s4.]

We think using Twitter.com to make surprise promotional offerings like the reusable canvas shopping bag offering is smart. Fresh & Easy needs to keep up this sort of online-gorilla marketing and promotion. This is a good start.

The canvas bag being given away costs only $1.00 everyday. But we think such giveaways still are a good idea since they create excitement and offer shoppers a deal they can choose to take advantage of or not.

Twitter is growing in popularity -- hardly a day goes by without seeing an article about or mention of the social networking site on television.

The micro-blogging site already has 6 million users. Tens of thousands are joining each day. It's what we call a low-cost, high-impact platform -- the only cost of using Twitter for marketing and other forms of communication is a computer, Internet connection, and the labor costs for the person doing the micro-blogging for a given company.

We suggest Tesco's Fresh & Easy use Twitter to make at least one, and even two, offerings each week that are special and exclusive to Twitter. These offerings can be coupons good for items like the free canvas shopping bag, as well as for food and grocery products (hot discounts on the item, "buy-one-get-one-free, ect.), a special "Twitter Sale Price" on a given item or three, good for say three days, and other related special "Twitter" promotions.

The only limitation is common sense and creativity. Change it up each week; create variety and surprise. The canvas bag offering is a good start to what could be a high-impact, low-cost niche marketing tool for Fresh & Easy if used well -- and regularly.

[Reader Note: You can follow Fresh & Easy Buzz around on Twitter.com at: www.twitter.com/freshneasybuzz.]

Fresh & Easy Buzz is an independent Blog. It's not affiliated with Tesco plc, Tesco's Fresh & Easy Neighborhood Market, or any other food or grocery retailer.

Consumer Use and Retailer Redemption of Manufacturers' Coupons Soaring Says Leading Redemption Company in the U.S.; But Not at Tesco's Fresh & Easy

Inmar Inc., the leading promotions transaction settlement provider in the U.S., said late last week that manufacturers' "cents-off" coupon redemption in the fourth quarter of 2008 grew nearly 10%, compared to the fourth quarter of 2007, making it the first jump in redemption since the early 1990's.

Inmar operates one of the leading U.S. clearinghouse operations for the redemption of manufacturers' coupons by retailers and the payment to those supermarket and other format retailers by the manufacturers'-marketers.

According to data just released by Inmar, consumer response to manufacturers' coupons remained strong for 2008, with 2.6 billion coupons redeemed, the third year in a row at that level.

The peak year for coupon redemption was 1992, at the end of the last major recession, when 7.9 billion coupons were redeemed, Inmar says. [Fresh & Easy Buzz thinks 2009 could come comparatively close to that number. It won't be 7.9 billion because manufacturers aren't distributing coupons in the same volume as they were in the late 1980's-early 1990's. However, we bet when 2009 is over the total redemption amount will be much higher than 2.6 billion.)

"Consumers responded to the financial uncertainty (in 2008), in part, by using more coupons," says Bob Carter, president of Inmar CMS Promotion Services. "When everyone started hearing reports of record unemployment, drops in consumer confidence and losses on Wall Street, coupon redemption volume started to go up."

CMS Promotion Services is the brand solutions and promotions arm of Inmar.

The first three quarters of 2008 saw coupon redemption dip slightly, compared to the same three quarters in 2007, according to Inmar's data.

But manufacturer-issued food, grocery and non-food item coupon redemption surged up by nearly 10% in the fourth quarter of 2008, compared to the fourth quarter in 2007.

That increase came in November and December which both saw double digit redemption growth.

A double-digit increase in the use of food coupons primarily drove the jump in redemption, although non-food coupon redemption also rose by nearly 10%, Inmar says. [Note: This compares to the search trends by consumers we analyzed and published in this piece on March 8:

The increase in coupon use also accompanied an unprecedented shift in the channels in which consumers used coupons, according to Inmar.

"For years, nearly 70% of coupons were redeemed in conventional supermarkets," says Jennifer Mauldin, president of Inmar Carolina Services Revenue Recovery Services. "But in 2008, the mass-merchandiser channel saw a 15% increase in redemption overall, made up by a 20% increase in redemption for food coupons and a 13% increase in non-food coupons."

Inmar's Carolina Services Revenue Recovery Services processes coupons and manages third party pharmacy claims for retailers.

The majority of non-food coupons issued by manufacturers are for items like household cleaning supplies and essentials (toilet tissue, paper towels, cleaning products) and health and beauty care category items (vitamins, OTC drugs, body care products) that are sold in supermarkets, mass-merchandise stores and drug stores.

The mass-merchandiser channel includes retailers such as Wal-Mart, Target and Costco, all three of which accept manufacturer-issued coupons for food and non-food items.

Every major (and most minor) food, grocery and related format retailers in the U.S. accepts manufacturer-issued "cents-off" coupons in their respective stores.

Tesco's Fresh & Easy Neighborhood Market does not accept manufacturers' coupons at all in any of its stores in California, Nevada and Arizona, which currently number 115. Since Fresh & Easy is owned by the third-largest retailer in the world, Tesco, which also is the number on retailer of food and groceries in the United Kingdom, is qualifies in the major retailer category mentioned above.

Supermarkets and grocery stores still remain the top retail channel for the redemption of manufacturers' coupons, with about 64% of all coupons being redeemed in the channel, according to data provided by Inmar, which is based in Winston-Salem North Carolina.

However, coupon redemption is growing in the mass-merchandiser channel, largely because the mass-merchandiser channel is a fast-growing seller of food and groceries. About 19% of manufacturers' coupons are now redeemed in the mass-merchandiser channel, according to Inmar's data.

The remaining percentage of coupons are redeemed from other retail classes of trade, such as the drug store channel, and others.

Much of this growth in the mass-merchandiser retail channel in 2008 can be attributed to the fact that more and more shoppers have been turning to the channel, particularly to Wal-Mart, but also to other mass-merchandisers like Costco, to buy their food and grocery items, taking the manufactures' coupons with them to those stores.

Based on our research and analysis, it's not that fewer shoppers are using the coupons at supermarkets. Rather, it's the fact that over the last few years the mass-merchandiser channel has gain a much bigger share of the overall food and grocery (and non-food) consumer dollar. This therefore is reflected in the growth in coupon redemption for the channel.

For example, the overall number one retailer of food and groceries in the U.S. today is a mass-merchandiser, Wal-Mart. The number two seller of food and groceries nationally in the U.S. is Costco, also a mass-merchandiser, with a membership club store specialty. Kroger Co., the largest supermarket chain in the U.S., now comes in as number three. Just two years ago Kroger was the overall top-retailer of food and groceries in the U.S., and Supervalu, Inc. (now number four) and Safeway Stores, Inc. (now number five), were both in front of Costco.

Inmar CMS Promotion Services' president Bob Carter says food and grocery manufacturers'-marketers continue to believe in the power of coupons, proven by a 5% increase in the number of coupons made available to consumers last year. "At 317 billion coupons, distribution is not just up over the previous year, but is back up to levels from a decade ago," Carter says.

"This high level of (manufacturer-issued coupon) distribution, combined with a 9% increase in the average face value and a generally sour economy, make coupon offers more attractive to consumers than ever," says Carter.

As Fresh & Easy Buzz has been writing about and offer analysis on in a variety of pieces over the last many months, all of the empirical evidence out there demonstrates that Bob Carter is correct; that the use of manufacturers' "cents-off" coupons by consumers will continue to increase, and do so significantly.

To demonstrate this point, Inmar's Carter says current data shows consumers' use of manufacturers' coupons increased substantially in January, 2009, over January, 2008. Over 9% more manufacturer-marketer-issued food, grocery and non-food item coupons were redeemed (meaning they passed through retail stores) in the U.S. in January of 2009 than were redeemed in January , 2008.

"While we can't predict the future, it is safe to say that the traditional coupon is back in vogue for consumers, says Inmar's Jennifer Mauldin. "Even if the economy turns a corner sooner than later, a combination of factors have put coupons back on the radar of many consumers and introduced some to them for the first time."

Inmar is a logistics company that specializes in providing services and solutions between trading partners for the physical, financial and information flows within the supply chain. It's the nation's largest provider of promotions logistics and settlement services, serving over 1,700 business clients, including manufacturers, wholesalers and retailers. The company says it processes more than 3.5 billion transactions annually.

The Inmar data matches that from supermarket and other format retailers, which we've reported on and written about previously in Fresh & Easy Buzz . The retailers report that food and grocery coupon volume (use by shoppers) in their stores is at what some say is at an all time high, and what others say is significantly higher volume than they've seen in many years.

But since Tesco's Fresh & Easy has a policy of not accepting the manufacturer-issued coupons in its stores, the many shoppers who use the coupons take them to stores operated by its competitors, where they spend their money because those grocers accept the coupons.

Tesco News: Tesco Says 'Boxing Day Weekend' Sales Event 'Biggest Ever' In UK

United Kingdom-based Tesco, the number one retailer across all categories in Britain, and the operator of the Fresh & Easy Neighborhood Market fresh foods and grocery chain in the Western U.S., is holding, along with a number of its competitors, its hottest Boxing Day (days after Christmas) weekend sale in modern history.

Beginning yesterday, Tesco reduced prices on durable goods items in its UK stores by 70% in what the retailer and UK observers describe as the most-aggressive post-Christmas holiday promotion in history.

Tesco also is offering significant discounts on some food, grocery and household cleaning products items in its UK stores. However, the thrust of the mega-discounting sale is on soft goods, hard goods, consumer electronics and other similar category items.

It's all about salvaging Christmas holiday sales for Tesco and the other UK broadline retailers, as it is for similar retailers in the U.S. that rely on sales of durable goods, who also are offering mega-sales this weekend, including American Department stores like Macy's, Bloomingdales and others, which this weekend are offering up to 70% off on certain merchandise, just like Tesco and the others are doing in the UK.

And like the U.S., the UK's economy is in tatters, resulting in a poor Christmas holiday sales season across the pound as well as in the U.S. The discounting is needed to move the goods off the shelves and at least put some cash, even at lower margins, in the store tills.

Read about the biggest sale in history at Tesco, as well as similar sales at stores owned by its competitors in the UK, at the links below:

[Bloomberg: Next, Marks Join Tesco, Debenhams in Post-Christmas Price Cuts... Wales Online.UK: Shoppers' early start for Boxing Day bargains... Guardian.co.uk: If you thought the Christmas price cuts were good... Times Online-UK: Where to find the best bargains in the sales... Bloomberg: Tesco Plans 100 Million-Pound Sale to Lure Shoppers... Bloomberg: UK Retailers Offer Discounts to Reverse Sales Slump... ITV.com-UK: High street sales frenzy begins.] [And, Nine out of 10 UK consumers say they will cut back spending on everything in 2009, including food and grocery purchases.]

Marketing: Tesco's Fresh & Easy Launches E-Mail Promo Alert Program; Something Fresh & Easy Buzz First Suggested it Do Many Months Ago

Beginning early this year, and in a few pieces since, Fresh & Easy Buzz has written about what in our analysis is a simple marketing opportunity Tesco's Fresh & Easy Neighborhood has missed since it opened its first first small-format, convenience-oriented combination fresh foods and grocery markets in November, 2007.

That missed marketing opportunity is the lack of the use of a simple e-mail address-based alert function on its Fresh & Easy Web site in which the retailer can alert customers and potential customers to its regulars advertising circulars, coupons, company news and related promotions and information, a function many food and grocery retailers, including the fast-growing small-format Aldi discount grocery chain, offer.

For example, below is a paragraph about the missed opportunity from a piece we published on May 4, 2008:

"Additionally, although we searched for it, we can't seem to find a function on the Fresh & Easy website in which a customer or potential customer can put in their email address and receive the online advertising circular in their email box like one can with Aldi. Adding this function is cheap to do, and Fresh & Easy is missing the boat by not having such a simple yet powerful tool on its website. [If there is such a feature, and we missed it, it means it's hard to find because we searched all over the site for it.]" Read our complete May 4, 2008 story on the topic here.

The reason, as it says in the paragraph, we searched all over the Fresh & Easy Neighborhood Market Web site but couldn't find such a function is because one didn't exit -- until this month that is.

Tesco's Fresh & Easy, perhaps by mere coincidence to our suggestions, has this month launched just such an e-mail-based alert function on its company Web site, which you can find here.

Here's what Fresh & Easy Neighborhood Market says in promoting the new e-mail function (graphic at top of the piece) and what we suggested could also become a valuable marketing and promotional database over time:

Are you a friend of fresh & easy?

'We've made it easy for you to get the scoop on our latest news , budget prices and special offers. Sign up below and we'll make sure you know what's happening around your store! Plus by signing up now, you'll receive an exclusive coupon for $6 off when you spend $30 or more at fresh & easy by December 24, 2008'.

Below is the response people get once they sign up for Fresh & Easy's e-mail alert program:

Below the text is a link where consumers can click and download Fresh & Easy's current $6 off total store purchases of $30 or more online coupon. [By the way, we would change the header in Fresh & Easy's adveretising text printed above in italics to: "Become a 'friend of Fresh & Easy.' It's much more inviting than asking the question in the header: "Are you a friend of Fresh & Easy?" which sounds a bit exclusionary. What if I'm not a "friend" but might want to be, for example, as in have never been in a Fresh & Easy store but might want to become a customer. It's a simple distinction -- but we think an important one.]

We don't get the "exclusive" aspect as it relates to Fresh & Easy's use of that term in the ad copy, since the $6 off coupon is the one Fresh & Easy gives out to everybody. "Exclusive" has a specific meaning after all and certainly doesn't apply to the coupon. But minus using the term "exclusive" we think it's a good idea to offer it -- if the grocer is going to offer the coupon at all -- as part of an incentive to get customers and potential customers to sign up for the e-mail based alerts.

Food and grocery retailers like Aldi, Safeway Stores, Inc., Kroger, Whole Foods Market and many others -- including many in Southern California, Nevada and Arizona where the Fresh & Easy markets are located -- have been using e-mail alerts for a long time. It's a simple, cheap and effective way to communicate with consumers.

It's also a natural, 21rst century way to get a retailer's weekly grocery ad into the hands of shoppers in an inexpensive and alternative (in addition to paper) way. Imagine the money retailer's could save if they can eventually eliminate paper advertising circulars, for example.

Having an e-mail alert function is something Tesco's Fresh & Easy Neighborhood Market should have been doing long ago. But it has to date been behind the marketing curve on this and so many other areas, particularly relating to the use of the Internet, which it should be a leader in rather than a follower. For example, imagine if the started the e-mail alert program in January of this year -- the grocer would have a nice data base built by now.

Additionally, since Fresh & Easy's customer base appears from our research to thus far be overwhelmingly comprised of younger people (about age 18-35), a group that uses the Internet and personal communication devices as second nature, the retailer should use the Internet and the various forms of electronic communication available to it like...well, second nature, in our analysis and opinion.

At its sign up site, Fresh & Easy indicates it also will eventually sent text message updates as well as e-mail alerts. Using text messaging alerts to personal electronic communication devices -- mobile phones, Blackberry's, iphones -- is something we've been suggesting in Fresh & Easy Buzz offers great potential for marketers in the food, grocery and consumer packaged goods industries.

For example, we see a day very soon when consumer packaged good manufacturers can send coupons directly to a shopper while she is in the aisle at a grocery store. For example, say a shopper is in the household cleaning products aisle. She could press a button on her mobile phone or other device and get a list of coupons for laundry detergent -- Tide, Cheer, even the store private label brand. No worry about printing any coupons out. The stores would be hooked up to companies offering the service. There could be a simple way to transmit the coupon data from the customers' hand-held devices to the stores' point-of-sale systems as the shopper has her purchases checked out, the coupon values being deducted from her order.

This is just one example of what we believe are a myriad of marketing uses, and convenient options for consumers, of digital technology and its application to food and grocery marketing and shopping.

Promoting e-mail alerts on the MyPoints.com system

Tesco's Fresh & Easy also is promoting its e-mail alert program via the MyPoints.com reward program (promotion graphic from MyPoints.com pictured above), Fresh & Easy Buzz has learned. Consumers with a MyPoints account recently received an e-mail alert, as they do from other companies using the system, announcing the Fresh & Easy program. Below is the text of that Mypoints.com alert as it was sent to users:

Get Your Points!
"Now that you've read the BonusMail, visit Fresh & Easy Neighborhood Market™ online. Receive 5 Points. It then offer a link to the Fresh & Easy Web site."

In addition to MyPoints.com users getting five MyPoints bonus points (Mypoints' are similar to credit card points or airline miles in concept and use), which Fresh & Easy pays MyPoints.com for providing its users as part of the advertising arrangement, Fresh & Easy is offering the MyPoints.com users that sign up for the e-mail alerts on its freshandeasy.com Web site a coupon for a free Fresh & Easy reusable canvas shopping bag, which they can redeem in-store if they spend more than $10 at a Fresh & Easy market.

Since Fresh & Easy sells these bags for 99-cents in-store, we don't see it as much of a deal, and thus doubt if there will be much action in regard to consumers going to crazy over getting a 99-cent canvas bag for free in return for spending $10 at the store. Fresh & Easy should also have offered its $6 off coupon to the MyPoints.com users, along with the bag offer. Why not?

But using MyPoints.com as an additional avenue to promote the e-mail alert campaign is a good idea, in our analysis and opinion. Doing so taps into an established base of Internet savvy consumers who regularly use online-based marketing tools and programs offered by companies. It's smart for Fresh & Easy to piggyback on this base, we believe, even if the canvas bag incentive is rather on lean-incentive side. The main incentive to MyPoints.com users, in all promotions, are the five free MyPoint.

We are wondering why though Fresh & Easy hasn't e-mailed its current online promotional flyer to e-mail addresses, at least ours and those of a few readers we know, since we -- and they -- have already signed up for the e-mail alerts? In fact, you receive nothing via e-mail from Fresh & Easy after you sign -up -- not even a simple inbox message alerting you to the fact that something will be coming in a week or two, like the message we mentioned earlier in this piece that you get on the company's Web site after putting in your name and e-mail address.

It's simple to create a simple "bounce back" reply via e-mail like this. It's a good idea to do because not only does it provide instant feedback via e-mail to the person who just signed up -- something that's a good sign of things to come -- it also allows Fresh & Easy to get its first message (why not include a link to the $6-off coupon in a simple two or three sentence "bounce back" response if it need be limited to such) to its new e-mail alert participants right way.

God (and the Devil too it is said) is in the details. Add Internet savvy consumers to that list. Those consumers used to using the Internet regularly, like the target consumer base Fresh & Easy is (or should be) after with its new e-mail alert program, are used to and like instant response -- that's why they not only use computers but portable electronic communication devices as well.

Therefore, not getting any response from Fresh & Easy via e-mail after signing-up for the e-mail alerts program tends to short circuit the "alert" aspect of the program. It also makes users wonder if their e-mail sign-up went through, since they are used to getting immediate responses (instant feedback) from nearly all similar Web site sign ups. The grocery chain should fix that and add an immediate e-mail response "bounce back" posthaste, in our analysis. Follow through is key to everything a food and grocery retailer does. And details matter always, especially in marketing programs.