Southern California-Based '99 Cents Only Stores' Has A Valentine's Day Ad 'Frugal Romeos' Can't Refuse

Commerce, California-based retailer 99 Cents Only Stores, which offers a strong assortment of perishable foods and grocery items in its 281 stores in California, Nevada, Arizona and Texas, appeals to men with its clever and funny Valentine's Day advertising circular (above) - "Attention All Romeos: Valentine's Tips From Your Friends at 99 Cents Only Stores - this week. View the full advertising circular here.

Valentine's Day offers a great selling opportunity for food and grocery retailers, particularly because it provides an opportunity in mid-February to sell many types of products in significant volume that, were it not for the special occasion, would move off the shelves at a slower, normal velocity.

Many of these products - gourmet candy, high-end floral bouquets, champagne and wine, steaks, seafood, non-food gift items and the like - are high-ring items that also in many instances have higher than average gross margins. A high item-ring plus higher than normal gross margin equals music (hear the cash registers ringing) to retailers' ears.

More music to retailer's ears: Compared to last year, the average shopper is expected to spend about 12% more on Valentine's Day gifts - an average of about $116 - than he or she did last year, according to retailing prognosticators who track holiday period sales.

Food and grocery retailers are well aware of the benefits Valentine's Day offers to both their top and bottom lines. That's why you see merchants go all out starting a couple weeks before the holiday, featuring Valentine's Day-themed in-store displays throughout every department. If its heart-shaped, for example, you'll see it in-store for Valentine's Day.

Nearly every food and grocery retailer in America also focuses its weekly advertising circular on Valentine's Day in the week leading up to today. Cookies, cupcakes, adult beverages, flowers, balloons, candy, gifts and cards, meats, seafood, gourmet foods, ready-to-heat gourmet meals and more are advertised at promotional prices beginning on the Tuesday or Wednesday before Valentine's Day, leading up to today.

As we do for each major merchandising holiday here at Fresh & Easy Buzz, this week we reviewed dozens of Valentine's Day-themed advertising circulars put out by grocers, mass merchants, dollar stores, drug chains and other format retailers located throughout the U.S.

The collective output is impressive, not only in the sheer number of items offered by retailers, but also because of the excellent prices offered this week for food, beverage and non-food items, all geared towards Valentine's Day.

But one retailer's ad circular stood out among the many we reviewed leading up to today, not because it's "better" than all the others but rather for its use of creativity and humor, tied-into its offering of various inexpensive gift items geared to male shoppers looking for Valentine's Day gifts for their sweethearts.

That retailer is the fast-growing Southern California-based dollar store format chain 99 Cents Only Stores, which this week took a clever and humorous angle in its Valentine's Day-themed ad, offering a variety of gifts "Romeo's" should consider buying for their sweethearts.

Unlike most other dollar store-format chains, 99 Cents Only Stores offers an assortment of perishable foods - meats, produce, dairy/deli - along with frozen foods and a strong selection of packaged food and grocery items (including gourmet and organic) in its 281 stores, which are located in California (75% of the units), Nevada, Arizona and Texas.

In the ad (pictured at top) headlined: "Attention All Romeos: Valentine's Tips From Your Friends at 99 Cents Only Stores," the retailer created two columns - "Good Choice" and "Bad Choice...but still a great deal" - each featuring items "Romeo's" should buy at the stores for their sweethearts.

Among the items in the "Good Choice" column include: chicken of the sea oysters, live flowering plants, condoms, whipped topping, a chocolate rose in a box and lady's lingerie, all for just 99-cents each.

Conversely, the "Bad Choice...But Still A Great Deal" column features items such as anti-wrinkle patches, a pregnancy test (see condoms in the good choice column) deodorant, diet tea, a mop and a broom, powdered Butt Aid and, perhaps as a companion item to the Butt Aid...douche. All of the "Bad Choice" items are also a mere 99-cents each, which demonstrates, at least in this case, that good choices cost the same as bad ones do.

[You can view the full ad circular and all the items here.]

The ad ends today. However, perhaps anticipating a rush by "Frugal Romeos" to the stores, 99 Cents Only has extended its stores hours, as noted in the circular.

But...back to that estimated average consumer spend of $116 this Valentine's Day, mentioned in the beginning of this piece. "Frugal Romeos" take note - and you still have time before the 99 Cents Only stores close today: You can purchase every single one of the items for your sweetheart on both the "Good Choice" and Bad Choice" lists featured in the 99 Cents Only Stores' ad circular - and still have plenty of cash left over for dinner out tonight at a decent restaurant.

The Promotional Pundit: Fresh & Easy Buzz's 'Promotional Pundit' and Watchdog Likes Safeway's '12 Days To Save' Promotion

There tends to be a dearth of creative marketing and advertising when it comes to the weekly promotional offerings put forth by U.S. supermarket chains.

For example, most food retailers' weekly advertising circulars consist mainly of a series of national (and regional) brand and store brand items which are offered at discount prices, along with a store-specific coupon or two. This isn't a bad thing - just a limiting one.

Of course, there are exceptions.

I noticed such an exception yesterday in the form of a four-page, full-color supplemental promotional/advertising circular distributed by Pleasanton, California-based Safeway Stores, Inc. via Sunday newspapers and online in all of its U.S. markets. Safeway operates hundreds of supermarkets in California, Nevada and Arizona - the three states where Tesco's 130 Fresh & Easy Neighborhood Market grocery and fresh foods markets are located - under the "Safeway" and "Vons" banners, as well as operating under "Safeway" and other banners in numerous other parts of the country.

The Promotional 'Big Idea'

Safeway's concept in the supplemental advertising flier issued yesterday - and good until Christmas Eve, December 24 - is a simple yet catchy one.

The promotion is called "Safeway's 12 Days To Save." It's a takeoff on the famous "12 Days of Christmas" song and theme."

In the advertising flier [an online version even includes sound; click the fourth button from the left on the Web Player at the link, top of the Web Site] Safeway is offering shoppers a coupon good for a one free item for each of the 12 days - beginning yesterday - leading up to Christmas. The last free coupon - for a free bottle of Safeway brand Club Soda - is to be redeemed by shoppers on Christmas Eve.

Among the "12 days of free items" from Safeway, along with the club soda, are a dozen free eggs, a 5 pound bag of potatoes, free cake mix and eight other items. Shoppers have to spend a minimum of $20 to get the daily free item coupon offering.

The promotion and advertising flier isn't a replacement for Safeway's regular weekly advertising circular. Rather, it's a supplement to it, geared around the Christmas holiday song and theme of the "12 Days of Christmas."

I like Safeway's promotion for a number of reasons.

First, it breaks out of the usual price-promotion-only focused paradigm/box by adding a creative element to it: The "12 Days of Christmas," which is a song every grocery shopper can relate to. It's easy for a consumer to immediately make the mental connection between the 12 days of free item coupons and the "12 days of Christmas" song and theme.

Second, the promotion adds the element of fun to grocery shopping. This cynical pundit smiled when we saw the flier, for example. Good advertising creates smiles.

Third, FREE is an obviously powerful offering. With a coupon for one free item, such as a dozen eggs, in hand, and with only a $20 purchase minimum needed in order to obtain it, I think a non-Safeway shopper just might be tempted to give Safeway a try. In other words, creating new customer trial, which should always be one goal of grocer promotions. And for regular Safeway shoppers the free item is a bonus for being a loyal customer.

Lastly, and perhaps most important, Safeway's "12 Days To Save" promotion and advertising flier creates interest in the Safeway brand. Safeway's supplemental advertising flier caught my attention, for example, and I look at way too many grocery chain promotional and advertising pieces. That means is broke from the usual clutter.

Such interest in "brand Safeway" does more than promote -- it adds to the chain's overall marketing and brand building efforts -- and as such I think it warrants being called a marketing piece as well as just a promotional one.

I give two thumbs up to Safeway's "12 Days To Save" promotion.

And just for fun, the song: "The 12 Days of Christmas"

On the first day of Christmas, my true love sent to me A partridge in a pear tree.

On the second day of Christmas, my true love sent to me Two turtle doves, And a partridge in a pear tree.

On the third day of Christmas, my true love sent to me Three French hens, Two turtle doves, And a partridge in a pear tree.

On the fourth day of Christmas, my true love sent to me Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the fifth day of Christmas, my true love sent to me Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the sixth day of Christmas, my true love sent to me Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the seventh day of Christmas, my true love sent to me Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the eighth day of Christmas, my true love sent to me Eight maids a-milking, Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the ninth day of Christmas, my true love sent to me Nine ladies dancing, Eight maids a-milking, Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the tenth day of Christmas, my true love sent to me Ten lords a-leaping, Nine ladies dancing, Eight maids a-milking, Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the eleventh day of Christmas, my true love sent to me Eleven pipers piping, Ten lords a-leaping, Nine ladies dancing, Eight maids a-milking, Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree.

On the twelfth day of Christmas, my true love sent to me Twelve drummers drumming, Eleven pipers piping, Ten lords a-leaping, Nine ladies dancing, Eight maids a-milking, Seven swans a-swimming, Six geese a-laying, Five golden rings, Four calling birds, Three French hens, Two turtle doves, And a partridge in a pear tree!

Click here to listen to the song: "The Twelve (12) Days of Christmas."

Fresh & Easy Buzz Redux: Tesco's Fresh & Easy Kills Plain White Paper Advertising Flyers; Moving Closer to What We Termed 'Minimalism By Design'

Tesco's Fresh & Easy Neighborhood Market distributed its third once-a-week frequency advertising flyer today. The promotional ad flyer, good from March 11-24, 2009, features the five fresh produce items (98-cent produce packs) above, along with other food and grocery items.

Promotional Merchandising: Tesco Fresh & Easy's Weekly Ad Flyer

On January 27, 2009 we wrote and published this piece [Tesco Fresh & Easy's 'New' Advertising Flyer: Minimalism Without Thought or Design Does Not A Retail Advertising Communications Piece Make] in which, among other analysis and suggestions offered, we suggested that the fact Tesco's Fresh & Easy Neighborhood Market had changed to a black ink on cheap plain white paper advertising flyer, from its previous color promotional flyer, was probably not a good idea, to say the least.

The title of the January 27 story says it all. In the piece we offered that there is nothing wrong with minimalism when it comes to advertising flyers, particularly in hard economic times like the present, as long as it is what we term "minimalism by design." That's opposed to "minimalism by default."

However, the two black ink on inexpensive plain white paper flyers we discussed in the piece were completely without design. Therefore, we suggested Fresh & Easy needed to go back to the computer graphics program or layout table and create something at least a bit more graphically attractive, and include at least one or two colors in the advertising flyer.

No more plain white ad flyers

Tesco's Fresh & Easy did just that with the supplemental advertising flyer it distributed about two weeks after our story was published on January 27.

In addition, Fresh & Easy has issued at least three -to- four advertising flyers since that one, and all have at least two colors, and at least have some thought given to the layout. In other words, they look much better that the plain white paper flyers we analyzed and critiqued in our January 27, 2009 piece.

The advertising flyers since then have a layout similar to what we suggested in the January 27 story, although they still need work to make them easy to read and more marketable. The flyers now also include color, green and red most recently, against the white backdrop.

Fresh & Easy needs to design the flyer so that graphically it fits into its overall merchandising and marketing communications message. It's a marketing-advertising communications piece, and when consumers see it a retailer should want them to immediately identify the ad flyer with the stores and the grocer's overall merchandising and marketing message.

As we reported and wrote about in this March 11, 2009 piece [Fresh & Easy Buzz Redux: Tesco's Fresh & Easy Changes its Promotional Advertising Flyer to 'Weekly;' Something We've Been Suggesting For About A Year], Tesco's Fresh & Easy Neighborhood Market has now changed to a once-a-week advertising flyer, which is something we first suggested it needed to do about one year ago. [The new weekly ad, March 18-24 is out today, here. Produce here.]

Now that the grocery and fresh foods chain is using a weekly ad flyer like all of its competitors are, it won't need to issue so many (if any) direct-mailed, paper supplemental ad flyers like it's been doing as a way to attempt to stay current because its previous advertising schedule was one ad flyer about every three weeks.

Additionally, now that Fresh & Easy is producing and distributing a weekly advertising flyer, it needs to produce a quality piece. It can be minimal -- in fact their might even be a certain cache to doing so -- but it needs to be "minimalism by design," not by default.

A perfect example of "minimalism by design" when it comes to grocer advertising flyers or circulars is Trader Joe's famous "fearless flyer." The TJ's ad flyer is printed on very inexpensive paper, newsprint basically. It is minimal in its look -- but by design.

The Treader Joe's "fearless flyer" contains mostly black ink pen-style artwork and generally uses only one other color (most often red) in its pages. The flyer is really more a booklet. But it is inexpensive to produce.

The Trader Joe's ad flyer fits perfectly with the grocery chain's image and merchandising and marketing communications message. The pen-art in the flyer reminds one of the hand written and drawn chalkboard signs in the stores, for example. That's a graphic marketing communications tie-in.

And the design of the flyer fits Trader Joe's quirky (by design) image: the names of its store brand products, the way the store employees dress, the look of the stores, and the like. That's integrated merchandising and marketing. That's what marketing communications is supposed to be. Advertising flyers need to be a part of that whole, not something different each week.

Tesco's Fresh & Easy now has a chance, with its now weekly ad flyer schedule and frequency, to produce a low-cost, high-impact, attractive paper advertising flyer similar to what we've previously suggested it could and should do.

By attractive we don't mean it has to be high-quality or fancy. Remember "minimalism by design" is just fine. But like the Trader Joe's "fearless flyer," which is minimal, but also is attractive, so too can Fresh & Easy design one that meets those dual criteria.

Fresh & Easy needs an advertising flyer that fits its overall image -- is a part of that image. The grocery chain needs to come up with a design and then stick with it. Advertising communications is best when it's integrated and consistent. Tweaks are fine but not wholesale changes each week.

Like they say, you only get one first impression.

We've had many readers tell us the plain white, and even the slightly better versions we described above (the ones after our January 27 story), Fresh & Easy flyers often go right in the circular file or recycle box because they look like junk mail. There's a reason grocery chains like Safeway Stores, Kroger and others make their weekly advertising circulars or flyers as attractive as they can within budget. That reason is that the food retailers want consumers to not only look at the promotional pieces -- but read and use them to do their grocery shopping, as well.

Up until the first of this year, Tesco's Fresh & Easy produced and distributed fairly attractive paper versions of its ad flyers. Then they changed them in January, most likely to save money. Saving money is fine. But being penny-wise but pound foolish isn't smart. Fresh & Easy needs to find a happy and economic medium between its previous graphically attractive advertising flyers and the ones it's currently producing and distributing (the paper, direct-mailed versions.)

It appears to us that since we wrote the January 27, 2009 piece, the grocery chain has been experimenting with its advertising flyers. They have improved. But they could improve much more. Minimalism is great -- just as long as it is by design rather than default.

And more important, Tesco's Fresh & Easy needs to decide on an advertising flyer design (at least a basic design) and then stick with it. And as we said earlier, it needs to be integrated with the chain's overall merchandising and marketing. We look forward to seeing what develops.

Breaking Buzz: Tesco's Fresh & Easy Distributes its First Promotional E-Mail Alert Today; Has the Grocer Been Reading Fresh & Easy Buzz This Week?

Tesco's Fresh & Easy Neighborhood Market sent out its first e-mail promotional alert today to consumers who've signed up for the program, which Fresh & Easy Buzz was the first publication to report on in this December 22, 2008 piece [Marketing: Tesco's Fresh & Easy Launches E-Mail Promo Alert Program; Something Fresh & Easy Buzz First Suggested it Do Many Months Ago].

Fresh & Easy's first e-mail alert dated today, January 30, 2009, is a version of its current promotional flyer promoting food and beverage items for this Sunday's Super Bowl. We wrote about the paper, direct-mailed version of that flyer on Tuesday (January 27, 2009) in this piece [Tesco Fresh & Easy's 'New' Advertising Flyer: Minimalism Without Thought or Design Does Not A Retail Advertising Communications Piece Make].

The Fresh & Easy e-mail alert of its Super Bowl promotional flyer, well-timed just two days before the Super Bowl, contains some good prices on game-day food and beverage items, including the grocer's $5.99 mixed-meat grill pack, 24-packs of Coke and Diet Coke for $5.99 each, and an 18-pack of Tourino Beer for $6.99, along with a few other sale-priced beverage, snack and related items, and a few versions of its new 98-Cent Produce packs. Below is the e-mail alert:

From: Fresh & Easy Neighborhood Market
Date sent: 01/30/2009 08:01:26 am
Subject: Check out our big savings for the big game.

Click here to view the promotional flyer contained in today's Fresh & Easy e-mail alert.

Did Tesco's Fresh & Easy read our January 27 piece?

The e-mail alert promotional flyer distributed to cyber-mailboxes today also contains an online version one of Fresh & Easy's discount store coupons. But it's not one of the grocery chain's normal $5 off (purchases of $20 or more) or $6 off (purchases of $30 or more) store coupons. Instead the coupon offered in the e-mail alert flyer today is one good for $10 off total purchases of $50 or more at Fresh & Easy markets. [View today's $10 off online coupon here.]

In addition, the $10 off coupon in today's e-mail alert flyer is good only for three days -- today, Saturday and Sunday, unlike the normally one, two and even three week shelf life the Fresh & Easy discount store coupons normally have.

In our story on Tuesday, January 27, we suggested two things Tesco's Fresh & Easy should experiment with regarding its store coupons. The first one is that instead of using just the $5 off purchases of $20 or more and the $6 off purchases of $30 or more deep-discount coupons, we suggested the retailer should offer store coupons that encourage higher shopper purchasing limits and offer lower percentage discounts. We specifically suggested Fresh & Easy should offer coupons good for $10 off purchases of $50 or more and coupons good for $25 off purchases of $100 or more. [The story linked above explains why we suggest doing this.] It appears the grocery chain is trying one of our suggested versions -- the $10 off purchases of $50 or more -- in the e-mail alert flyer/coupon distributed today.

Additionally, in that Tuesday piece, we suggested Fresh & Easy Neighborhood Market also should play around more with the expiration dates of these coupons. We specifically suggested it take a page from the Sacramento, California-based Raley's supermarket chain and at times offer the $10 off and $25 off coupons with only a three day shelf life -- Friday, Saturday and Sunday -- just like the $10 off coupon it has in its e-mail alert flyer today.

E-mail alert deja vu

In this story we wrote and published way back in May, 2008, Fresh & Easy Buzz suggested Tesco's Fresh & Easy was missing out on a very powerful marketing and promotional tool by not having an e-mail alert type promotional system, like numerous other food and grocery chains have started offering in recent times.

Below (in italics) is a paragraph from our May 4, 2008 piece on the topic:

"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.]

In December, 2008, as we reported here, Tesco's Fresh & Easy started asking consumers via its Web site to sign-up for just such an e-mail alert program, which they said would be coming soon. Today's promotional e-mail is the first alert the grocery chain has distributed that we are aware of.

Digital marketing and promo 2.0

Today's Super Bowl themed promotional e-mail alert flyer from Fresh & Easy Neighborhood Market demonstrates the marketing power of such systems, just as we argued is the case in that May 4, 2008 story.

Unlike nearly all of its competitors, who run weekly advertising circulars, Fresh & Easy's paper and online ad flyer is good for three weeks at a time. This means that unlike its major competitors, Fresh & Easy can't offer as well-timed theme promotions in its flyers as they can.

For example, Safeway, Ralphs, Bashas, Fry's Albertsons and all the others major supermarket chains in Southern California, Nevada and Arizona used a Super Bowl theme in their weekly ads which broke two or three days ago, beginning either on Tuesday or Wednesday depending on the specific chain's ad schedule. Fresh & Easy had to use a Super Bowl theme more than two weeks ago when its ad flyer came out. Events like the Super Bowl don't become top-of- mind with consumers until the week leading up to the event, and don't really become top-of- mind in any real way until a couple days prior to the event, when all the media hype about Super Bowl Sunday is in full bloom.

Therefore, as a result of its good-for-three-weeks nature, the Fresh & Easy ad flyer is a stale media product compared to the weekly ad circulars its competitors use. But now, with the e-mail alert program, Fresh & Easy can turn that stale ad flyer in to a fresh baked and delivered version, at least from an online standpoint. If it wants to do the same with the paper version then it obviously needs to mail it out, timed to arrive in consumers' mailboxes today, which is regularly does with supplemental flyers to its once-every-three-week-distributed regular ad flyer. We suspect, but have yet to check and verify, that Fresh & Easy is sent out a paper version of the flyer to arrive at homes today.

But the online flyer is dirt cheap to distribute. And it can be re-distributed again for near-zero cost. For example, the promotional flyer e-mail alert sent today can be sent a second time on Saturday afternoon as a reminder to stock up for Super Bowl Sunday. And unlike with paper flyers -- which at this point in time do reach more consumers but likely won't a year or two from now when Fresh & Easy bulds-up a bigger e-mail alert data base -- the second e-mail alert doesn't cost any additional money (accept to pay an employee to click "send") to e-mail tomorrow, if the grocer chooses to do so. That's the power of digital/Internet-based marketing. And as Fresh & Easy gets more consumers to sign up for the e-mail alerts, that power will continue to multiple.

Tesco Fresh & Easy's 'New' Advertising Flyer: Minimalism Without Thought or Design Does Not A Retail Advertising Communications Piece Make

Analysis & Commentary

Tesco's Fresh & Easy Neighborhood Market has downscaled the quality and design of the advertising and promotional flyers it regularly mails out to residents of the neighborhoods around its 110 combination grocery and fresh foods stores in Southern California, Metro Las Vegas, Nevada and in the Phoenix, Arizona Metropolitan regional market.

The grocery chain's most recent promotional flyer (dates: January 14 -to- February 3, 2009), its regular every-three-weeks' piece, is a single page of inexpensive-grade white paper with 35 sale items printed in black ink, rather than the full or two-color flyer printed on quality paper Fresh & Easy has been distributing since it started direct-mailing it's promotional pieces in November, 2007, when the grocer's first batch of stores opened. Like all of its direct-mailed promotional flyers, the current single-page flyer includes one (sometimes the flyers have two and even three) of Fresh & Easy's deep-discount coupons -- in this case a coupon good for $6 off purchases of $30 or more.

The current flyer isn't the first one-pager on inexpensive-grade white paper the grocery and fresh foods chain has sent out either. Tesco's Fresh & Easy distributed a similar (printed on the same plain-grade white paper with the text in black ink) one-page supplemental flyer -- which is often something the grocer does in-between its once every three weeks' regular flyer mailings -- just about a week before it distributed the current January 14 -to- February 3 promotional piece. That flyer didn't contain any specific items with specific promotional prices, just some promotional text about items that have low prices on them in-store. Rather, the flyer seemed to be more of a vehicle for the deep-discount coupon, which was the grocer's $5 off purchases of $20 or more version.

Until now, Fresh & Easy's advertising flyers have been graphically (and thus visually) attractive, printed on high quality stock and featuring two or three colors, including its trademark green, as in the color of its "Fresh & Easy" logo. Additionally, the past flyers have been at least two pages in content (front-back with front-back insert inside) and at times more.

The January 14 -to-February 3, 2009 one-page flyer printed on inexpensive white paper has the following tag line at the top: "These days we're all about scoring great deals," which is a good enough tag line in terms of the tie-in between touchdowns (Super Bowl) with scoring good deals (at the grocery store). The flyer's promotional item focus being of course on the upcoming Super Bowl and various related "game day" food and grocery items on sale.

There are eight feature items on the current ad flyer's front page. The items are: the fresh & easy assorted fresh meats grill pack, featured @5.99; 1 lb. package of beef franks @99 cents; Taurino beer @6.99 for an 18-pack; a 24-pack of Coke or Diet Coke @5.99; and Lays brand Ruffles or Tostitos Scoops snack chips (14-14.5 oz packages) @2.99. The flyer's front page also features Fresh & Easy's new "98 Cent Produce Packs" -- in this case a 2 lb whole table carrots pack, a 4-count navel orange pack, and a 2-count package of bell peppers, all at 98 cents.

All of those "front page" feature items are in-line price-wise with what other food and grocery retailers are currently promoting in California, Nevada and Arizona. None are what we would call "super hot." But none are way off-base either. But the Coke and Lays chips can be found on sale for less at a number of competing supermarket chains in the three markets. Nearly all competitor grocers also are offering comparable prices, and some even lower, on the other items. The fresh meat grill pack is a strong deal though. But if shoppers use the $6 off coupon in the flyer the added savings can be considerable, especially if they purchase just $30 (the coupon minimum) worth of the sale items.

In contrast, the back of the one-page advertising flyer printed on the inexpensive white paper contains 27 items, including prepared and frozen foods items, snacks, some basic grocery items, and a few household non-foods items.

The front of the flyer looks not too bad from a design standpoint. However, with 27 items printed on the back side of the page, it looks very cluttered, crowded and not extremely attractive in terms of the layout. If Fresh & Easy is going to stick to this one page flyer we suggest it go back to the design table in terms of the sparse look on the front compared to the overcrowded look on the back of the page. It's just not very visually appealing to the eye. And visual appeal is very important when it comes to direct mail advertising pieces, even if they are on inexpensive paper and minimalist in nature.

We understand what the grocer was trying to do in terms of putting just the eight items on the front page as "feature items," then all of the other (27) items on back as sub-feature and line-item ad items. But it doesn't work. There are simple layout changes that can be made though. For example, there's no need to crowd all 27 sub-feature and line ad items on the back of the one-sheet. Instead a mix can be used on both front and back, for example, so that the single-page flyer looks much more visually attractive. The flyer looks like it wasn't given any design thought at all.

From the look of the last two Fresh & Easy one page, black ink on cheap white paper flyers, it appears clear the grocer is attempting to cut its advertising costs. After all, the non-color single sheet costs significantly less across the board than Fresh & Easy's previous higher quality flyers do. Direct mailing a single page also is cheaper than bulk mailing a multiple page flyer.

But we are reminded of the old saying: "Penny Wise but pound foolish." The penny saved being the immediate cost savings, the pound foolish being the loss of impact of the now one-page, cheap white paper flyer.

Based on experience, we can tell readers that there is a cost savings for Tesco's Fresh & Easy in downscaling from its previous higher-quality, color flyer to the new one-pager on inexpensive white paper. But that savings isn't huge. And we question the cost-cutting in such a vital area (marketing-advertising communication) for the fledgling grocery chain.

Notice how nearly every other supermarket chain is maintaining its full-color, multi-page advertising circulars, nearly all of which are much larger and elaborate that Fresh & Easy's in the first place, despite the current economic recession?

The primary reason for their doing so is because in bad economic times like today, competition gets even hotter in the already highly-competitive food retailing business, especially when it comes to price promotions and ad circulars. Therefore these chains -- Safeway, Bashas, Ralphs, Fry's and most others in Southern California, Nevada and Arizona -- are maintaining the quality and size of their respective weekly advertising circulars (they all do weekly, Fresh & Easy does every three weeks) because of the intensification of this competition.

In fact, a number of chains like as Safeway, which operates about 400 stores in Southern California (Vons banner), Nevada (Vons in southern Nevada, Safeway in northern Nevada) and Arizona (Safeway banner) have expanded both the number of pages and items featured in their weekly ad circulars.

Tesco's Fresh & Easy is a new player in these three markets. Therefore it needs to get its advertising and promotional message out at least as much, and in reality more so ,than these established grocery chains do. But instead of doing so with more frequent and bigger ad flyers, it's cutting back to a one-pager. This doesn't make sense to us in terms of the highly competitive nature of the Southern California, Nevada and Arizona markets. It also doesn't make since to us because all of the major competitors are going full-steam ahead with their respective weekly ad circulars, and as we mentioned above, in some cases even increasing the size and depth of the promotional pieces. It also doesn't make sense because Fresh & Easy needs to get more shoppers in its stores. Ad circulars help to do that.

There are a number of places where Fresh & Easy could cut back on expenses. But its our analysis that doing so with its direct-mailed advertising piece at this time in the chain's development is a big mistake. Were the stores thriving, which they are not overall, maybe. But even then with market competition the way it is we believe Fresh & Easy's move just invites a loss of traffic to the stores.

Sure the grocer is still kicking out its $5 off and $6 off coupons twice to three times each month via the direct mailed flyers. But such coupons aren't not the same thing from a marketing and merchandising standpoint as using weekly advertising pieces to help drive shoppers into stores -- and keep them coming back each week. Consumers compare rival grocers ads, even more so at present then ever before in recent history, then shop more than one store based on the prices.

The deep-discount coupons also come out of Fresh & Easy's hide -- its retail profit margins. In contrast, all of the items offered at discount in grocer's weekly ad circulars, except store brands and in some cases even those, are the result of promotional allowances given to the respective retailers by the manufacturers and marketers of those branded products in turn for the retailers promoting the given items. Manufacturers even pay the retailer's for the space in the weekly ad circulars. For example, Safeway gets a couple thousand dollars for just a mere line-item ad in its weekly circular; thousands more for a feature item. The weekly ad circulars are actually a profit center for chains like Safeway, Ralphs and others.

Tesco's Fresh & Easy gets these supplier deals as well for the items it advertises in its flyers. But since the majority of those items are its store brand, the deals aren't very significant overall for the grocery and fresh foods chain.

Regarding the deep-discount coupons, when a shopper uses a $5 off Fresh & Easy coupon for a $20 purchase, which results in a 20% savings for the shopper, that 20% comes directly out of Fresh & Easy's profit margin on the items that comprise that $20 purchase. That's a tough nut because after that 20% there isn't much margin leftover.

By relying so much on the store coupons rather than item advertising and promotion, Fresh & Easy is hurting itself in two key ways, as we've suggested in Fresh & Easy Buzz in past stories: It's building a shopper reliance on the coupons (the grocer has been distributing them regularly since the first store opened in the fall of 2007) and it's diminishing its profit margins because instead of infrequent (read promotional rather than regular) distribution, and thus infrequent shopper use of such deep discount coupons, Fresh & Easy customers have them in-hand nearly always and use them regularly.

Just ask Fresh & Easy store employees how much grief (mostly polite grief though) they've been getting from customers in-store because the grocery chain is now trying to distribute the deep-discount coupons only via the direct mail flyers and periodically online at its Web site, instead of giving them away liberally in the stores, which is something the grocer did from November, 2007 until just a couple months ago. Some stores still are giving the coupons out in-store in a limited fashion. Most have stopped though, as directed by company management. Headquarters just doesn't send the stores any, in other words.

Numerous customers have told us, and have commented on various Web sites, including Fresh & Easy Neighborhood market's own Web site Blog and its site on Twitter.com, that they either are no longer shopping in the stores or doing so far less frequently because of the now more limited availability (read not by the handfuls in-store) of the $5 off and $6 off deep discount coupons.

It's our analysis that instead of downscaling to a one page, once every three weeks flyer printed on cheap white paper, Tesco's Fresh & Easy should move away from its reliance on these deep discount coupons to developing and implementing a regular advertising circular program -- a once a week ad circular similar to what Safeway, Ralphs, Bashas, Stater Bros., other chains and nearly even every single-store independent grocer does.

Fresh & Easy should then include the deep-discount store coupons far less frequently in the weekly advertising circulars, and offer them for far less periods of time.

Store coupon mini case study: Raley's

Perhaps the grocer should take a page from the Sacramento, California-based Raley's supermarket chain which in October and November of 2008, and again earlier this month, offered two store coupon versions: A $10 off purchases of $50 or more and a $25 off purchases of $100 or more.

The Raley's deep-discount store coupons are good only for Friday, Saturday and Sunday -- key shopping days and thus days in which all grocers want to take business away from competitors, along with keeping regular customers from going to competitors' stores on. This strategy not only creates a promotional incentive for consumers (coupons good only for three days), it also limits a grocery chain's margin loss exposure to sales only on those three days. And remember they are key shopping days, so the supermarket chain really isn't hurt by limiting the coupon's shelf life to only three days.

In contrast, the Fresh & Easy deep-discount store coupons are good for two or more weeks at a time. Having such long expiration dates on these types of coupons reinforces the "regular" nature of their use. (I don't have to use them today, or tomorrow, or even next Monday since they are good for a couple weeks.)

Many consumers have been "trained" by the way Tesco's Fresh & Easy uses these coupons -- the regular rather than promotional nature of how they distribute them -- to believe the coupons are a regular way of doing business for Fresh & Easy instead of a limited nature promotional device. That's not a good thing for a grocer. And its why so many consumers are complaining about not being given one, two and even at times three of the deep-discount coupons after every Fresh & Easy store purchase, as was the case until a couple months ago.

The Fresh & Easy ad flyer - and store coupons

It's our analysis that if Fresh & Easy moved to a more frequent (weekly would be best) schedule with its advertising circular program, in addition to scrapping the new one-page flyer in favor of something more like what its competitors' are and have been successfully using for years (doesn't have to be the same, creative is good), it could eventually wean consumers (and its present coupon-focused retailing model) away from the regular deep- discount coupons, which we know the grocery chain wants (and needs) to do in a big way.

Fresh & Easy can still use a version of the deep-discount coupons but run them in what now would be the weekly advertising circular less frequently -- say every other week to start. The grocer could also limit the shelf-life of the coupons, say similar to what Raley's is doing with its "Good only Friday, Saturday, Sunday" store coupons. The Fresh & Easy weekly ad flyer could come out each Tuesday or Wednesday, like its competitors ad circulars do, and have the coupon kick-in starting Friday, running through Sunday, for example. The grocer also can experiment with which days the coupon is good for, as well as alternate such days and see what happens.

Doing this also would allow Fresh & Easy to play around more with the coupon "coupon value -to- purchase ratio." One of the key objectives of using such store coupons -- although few grocers use them at all and those like Raley's that use them do so only in a very limited way -- is to get shoppers to buy as much dollar value of groceries as a grocer can achieve if the customer is using the coupons. Doing so reduces the margin loss for the grocer. It also raises the market basket (average size of customer purchase) for the grocer. Achieving the latter is one of the few justifications actually of using such deep-discount coupons.

An example of reaching for the optimum " coupon value to purchase ratio" is: If Fresh & Easy Neighborhood Market store "Shopper A" uses the $5 off purchases of $20 or more coupon, and buys just $20 worth of groceries, that's a 20% savings for the customer -- and in Fresh & Easy's case it's 20% less than the grocer would have made on the purchase had the shopper not used the coupon. But if "Shopper B" uses that very same coupon but purchases $40 worth of groceries, that's a 10% savings for her -- and a loss of only 10% for Fresh & Easy had "Customer B" not used the coupon for her $40 purchase.

Conversely, creating a coupon that offers $10 off $50 or $25 off $100, like Raley's is doing at times, sets the purchase ratio higher by design, which in our analysis and experience is superior. You don't create a consumer reward ($5 off or $6 off) for merely spending $20 or $30 in the store, which is an OK amount for a convenience store but not a grocery market, but rather up the ante -- spend $50, get $10 off, spend $100 (which isn't much at the grocery store today), get $25 off.

Therefore two things are key for grocers in this regard if they use such deep-discount store coupons: That they find the best "coupon value -to- purchase ratio" combination for the coupons, and that they get more shoppers into the stores who's purchases exceed the coupon limit ($20 in the case of the F&E $5 off coupon).

This is why in Raley's case it's using the $10 off $50 and $25 off $100 store coupons. It wants to (1) limit its customer universe of coupon users to those who are willing to buy at least $50 worth of groceries at a single purchase and (2) get as many consumers as possible to use the $25 off $100 coupon (that's why it offers a higher percentage savings than the $10 off $50 version) because even though it features a savings of $5 more, the $100 purchase (double the $50) is worth it for Raley's because the added dollar volume offsets the additional $5 in shopper savings.

Also, the coupons are an infrequent and limited promotional tool for Raley's. It big media-oriented promotional tool is its about 12-page weekly, full-color advertising circular, which it distributes using a combination of direct mailing and insertion in the Tuesday editions of the major daily newspapers in its market regions, which include most all of Northern California and the northern Central Valley. Raley's is a privately-held chain based in Sacramento, California. It operates 130 supermarkets and warehouse stores. The chain had annual sales of about $3.6 billion in 2008.

Fresh & (ad flyer) downscaling

But for now it appears Tesco's Fresh & Easy has decided to downscale its promotional outreach efforts to customers and potential customers by going to its new, one-page advertising flyer printed on inexpensive white paper.

We believe the move is a wrong one for the grocery chain at this time.

It's been a consistent practice among the vast majority of U.S. supermarket chains, and even independent grocers, beginning with the serious recession in the late 1970's, through the equally serious 1982 recession, and in the less serious but real recession in the early 90's and in the 2001-2002 recession, to not cutback in the areas of retail marketing, promotion and advertising, including downscaling the quality of their advertising circulars and other media in a dramatic way like Tesco's Fresh & Easy has done.

In fact, these have been, and are currently to date in the present serious recession, the last areas the vast majority of U.S. grocers cutback or downscaled in. Instead, grocers look to cut in other places, only doing so in retail marketing, promotion and advertising when most other areas are exhausted.

We shall observe closely when the new Fresh & Easy advertising flyer comes out next week (it begins after February 3) to see if the last two flyers are just an experiment in downscaling or if they are the new norm.

Minimalism is fine - but by design

Lastly, we aren't against minimalism, as long as it is done by design. The one page Fresh & Easy flyer doesn't look like there is much thought or strategy behind it. After all, it's one piece of inexpensive white paper with sale items printed on it in black ink.

If the thought is to go minimal -- which could be a great marketing strategy in this down economy -- why not go minimal by design and strategy?

For example, why not a four page ad flyer in just black and white? Use inexpensive newsprint and make the flyer look like a black and white newspaper. Well designed but minimalistic. Call it the "Fresh & Easy Thrifty Flyer." Tout it as a minimal and simple advertising flyer for tough times. A potential tag line: "We made tor new flyer out of newsprint and are doing it in black and white because by doing so we can bring you even lower prices in our stores during these tough economic times." Use the media to help convey the message.

There are obviously better ideas than ours. It's merely an object lesson in what we mean by minimalism by design. Our point is minimalism by strategic design can be a very good (think about the old Volkswagon automobile ads) strategy and practice, but seldom is it so when its minimalism by default -- such as reverting to using a single page of white paper as a promotional and advertising flyer.

Marketing is everything a retailer does -- from its stores to its advertising flyers -- and more. Integration is key. We don't see any of those things in Fresh & Easy's new flyer: It's just a piece of white paper with the advertised items printed on it in black ink. Something is amiss.

{Tesco's Fresh & Easy also posts its advertising flyer online at its Web site. You can view the current online flyer here.

Nearly all supermarket chains and many independents post their advertising circulars on their Web sites today. When the day comes when grocers can get the majority of consumers to go online regularly for thier ad circulars, that will be a day when all grocers are able to save a ton of money, eliminating the expense of laying out, printing and distributing the promotional pieces. And perhaps reflecting some of that savings to consumers by lowering prices in the stores? But we don't see that day coming in the immediate future.}