It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell

Fresh & Easy Buzz was the first publication to report in this September 22, 2008 story [Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market] that former co-vice president of operations Brian Pugh was leaving his position at Tesco's Fresh & Easy and Tesco plc.

Brian Pugh was a key executive for Tesco plc before being tapped to be one of the handful of Tesco executives from the United Kingdom sent to the United States to start up its Fresh & Easy small-format grocery and fresh foods chain in Southern California in 2006. The first Fresh & Easy markets opened in November 2007. There are now 131 Fresh & Easy stores open in Southern California, Arizona and Nevada.

Fresh & Easy Buzz was also the first publication (that we can find) to report in this December 22, 2008 story [Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position] that the former Tesco Fresh & Easy co-president of operations had landed a new position as vice president of format development at the mega-U.S. drug store chain Walgreens.

Mr. Pugh was promoted by Walgreens to the position of corporate vice president of merchandising (a position he currently holds) just a few months after being hired, as we reported in this March 2, 2009 story: Walgreens Promotes Former Tesco Fresh & Easy Exec Bryan Pough to VP Merchandising Position; Move Fits Drug Chain's Current Strategic Focus.

Prior to March of 2008 Brian Pugh held the position of vice president of operations at Tesco's El Segundo, California-based Fresh & Easy USA.

However, as we reported in this March 12, 2008 story [Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team], that changed when Tesco plc decided to transfer Jeff Adams, the former CEO of its Tesco-Lotus unit in Thailand, to Fresh & Easy USA to share senior retail operational duties with Mr. Pugh. [Suggested reading - May 29, 2008: Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 12.]

Charlotte Maxwell: Part of the British Invasion Down Under

Earlier in this August 17, 2008 story [Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department] Fresh & Easy Buzz was the first to report exclusively that Charlotte Maxwell, a nine-year Tesco plc executive and the former director of grocery at Tesco's Fresh & Easy USA for close to three years, was leaving her top position at Fresh & Easy headquarters in Southern California to return to Tesco plc's global headquarters in the United Kingdom.

Ms. Maxwell's departure from the top grocery merchandising job at Tesco's Fresh & Easy came amidst what we called in this August 17, 2008 story [ Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'] a category manager and grocery buyer "Brain Drain" at Tesco's Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, California.

Unlike former Tesco Fresh & Easy co-vice president of retail operations Brian Pugh, who left Tesco plc completely and not just its Fresh & Easy USA unit, former Tesco plc executive and Fresh & Easy USA director of grocery Charlotte Maxwell did return to Tesco and its global corporate headquarters in Cheshunt, Herts, England in the United Kingdom.

Her stay there didn't last long though.

We can now report that Charlotte Maxwell, like Brian Pugh, no longer is employed by Tesco plc.

In April of 2009 Ms. Maxwell joined the Coles supermarket chain in Australia as its new general manager of deli/bakery, which is the senior merchandising and buying position for the deli and bakery categories at the chain.

In 2008 and again in early 2009 Coles, which is Australia's second-largest food retailer after the Woolworths chain, tapped Charlotte Maxwell (in her case in early 2009), along with an entire team of former British supermarket chain executives, category managers and others, as part of a five-year strategic turn-around strategy being implemented by the board of directors of Coles' parent company, Westfarmers. Not too many years ago Coles held the number one market share position in Australia but was overtaken by Woolworths, which is something the board wants to change.

The turnaround effort is being led by Brit Ian MCLeod, who is a former executive with Asda, the number two supermarket chain in the United Kingdom after number one Tesco.

Another British grocery retailing veteran, turnaround specialist Archie Norman who is given much credit for the turnaround of the Walmart Stores, Inc.-owned Asda chain in the United Kingdom, is assisting in Coles' turnaround strategy, working with MCLeod in the position of "chief coach," a consulting capacity.

Former Tesco and Fresh & Easy USA executive Charlotte Maxwell is among a group of numerous Brits now at Coles' corporate headquarters in Australia. This group includes veterans from the United Kingdom's top three supermarket chains: Tesco, Asda and Sanisbury's. Many in the Australian food and grocery industry are calling it the "British invasion of Coles." We sot of like "British Invasion: The Sequel."

And the British food and grocery retailing vets transplanted to Coles in Australia look to be very busy, according to a brief report in Tuesday's (December 23) Herald Sun newspaper headlined: "Supermaket giant Coles accused of crunching suppliers with new campaign."

Here's the report (in italics):

Supermaket giant Coles accused of crunching suppliers with new campaign

SUPERMARKET giant Coles has been accused of launching a new campaign that strips profits from struggling suppliers.

A new management team recruited from UK supermarket chain Tesco has been blamed for the profit grab, which has seen Coles axe some branded lines that compete with its own private labels.

Suppliers say Coles is demanding big increases in payments for shelf space, playing cheap, low-quality imports off against local companies to force their prices down and asking suppliers to take a big hit on payments to subsidise the refurbishment of Coles' stores.

Coles has rejected the "wild" accusations. A spokesman said the chain sought to "strike a balance between paying sustainable prices to suppliers, and ensuring customers get the best possible prices in our stores".

But a food manufacturer who deals with local farmers said the new Coles management had been "ruthless", demanded "premium product for Chinese prices" and played several tricks during negotiations.

It appears the British invaders are stirring things up a bit down under.

Life After (Tesco's) Fresh & Easy

Neither Tesco plc or Tesco's Fresh & Easy Neighborhood Market USA announced the departures of either Charlotte Maxwell or Brian Pugh when each respectively left Fresh & Easy headquarters in Southern California. That's not an unusual phenonmenon though, and certainly not exclusive to Tesco.

But both Mr. Pough and Ms. Maxwell were key in setting up Tesco's U.S. Fresh & Easy chain just three years ago -part of that select team of pioneers or "British Invaders" if you will - And now both are no longer employed by Tesco plc.

We aren't suggesting anything nefarious about the departure's of these former key Tesco employees. It happens.

It is an interesting phenomenon though since both were key Tesco plc executives prior to the establishment of Fresh & Easy USA, which has been a less than stellar venture for Tesco thus far, and now both are not only gone from Fresh & Easy but also from Tesco plc.

But we won't go as far as to suggest there exists anything like a "Fresh & Easy curse" for former key Tesco plc executives who, like those British pioneers of history, came to the former colony of America to stake their claim.

But as many of us know - a start up can be a cruel mistress or master, as has been the case at Tesco's Fresh & Easy USA. But in the case of Mr. Pugh and Ms. Maxwell, it appears they've both landed well - one (Mr. Pugh) with the leading U.S. drug store chain, Walgreens, and the other (Ms. Maxwell) with Australia's second-largest supermarket chain, Coles.

'British Invasion: The Sequel Down Under'

And in the case of Charlotte Maxwell, it's "British Invasion: The Sequel Down Under," in part. Having spent nearly three years as one of a group of Tesco plc senior executives starting up the Fresh & Easy chain in the Western U.S. - a move that's often been dubbed in the media as the "British Invasion" of U.S food and grocery retailing, she's now part of a group of British retail food and grocery retailing veterans who have parachuted (or invaded) into australia to lead the turnaround of that country's second-largest grocery chain.

Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK

On August 17 we reported in this piece: "Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department," that Charlotte Maxwell, director of grocery at Fresh & Easy Neighborhood Market USA, is leaving Tesco's U.S. food and grocery retailing venture to return to Tesco's corporate offices in the United Kingdom to accept a grocery director's position which she interviewed internally for and was recently offered. It was an offer she accepted.

In the August 17 story we reported she would be leaving Fresh & Easy Neighborhood Market and its headquarters in El Segundo, (Southern) California for her new position at Tesco in the UK before the end of this month.

We've now learned that today, August 22, is Ms. Maxwell's last day with Fresh & Easy Neighborhood Market USA and at its Southern California headquarters.

After today, Ms. Maxwell, who's home is Britain, will be returning home to live and take up her position as a grocery director level four at Tesco's offices in the UK.

Like many of the Tesco Fresh & Easy Neighborhood Market senior executives, including CEO Tim Mason, marketing director Simon Uwins and others, Ms. Maxwell came from the UK to Southern California to start up the Fresh & Easy chain. And like Mr. Mason, Mr. Uwins and most of the food retailer's other senior executives, Fresh & Easy has been Ms. Maxwell's first experience with food and grocery retailing American style.

As we reported in our August 17 piece, Sean McCurley, also a British native, will be replacing Charlotte Maxwell as corporate director of grocery at Fresh & Easy Neighborhood Market. Mr. McCurley is currently the director of fresh, which has been an equal position to Ms. Maxwell's in Fresh & Easy's corporate structure. Essentially he is making a lateral move within the company. He begins his new position with Charlotte Maxwell's departure today.

Fresh & Easy Neighborhood Market splits its category management/merchandising and buying department into two functional areas: grocery and fresh, as we detailed in our August 17 piece.

As part of Ms. Maxwell's departure, Tesco's Fresh & Easy is reorganizing its corporate buying department, replacing her with Mr. McCurley, along with making other adjustments and changes in the department.

That reorganization also comes on the heels of five category managers and buyers having left Fresh & Easy in the last 4 -to- 5 months. For more information on this category manager and buyer brain drain at Fresh & Easy's corporate offices read our other August 17 piece: "Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain.'"

Tesco opened its 73rd Fresh & Easy small-format (average 10,000 -to- 13,000 square feet) combination basic grocery and fresh foods store on Wedneday, August 20 at Tustin and Chapman streets in the Southern California city of Orange. It's the grocery chain's second store in the city, and its eighth unit in Orange County, which the city of Orange is located in.

Related stories from Fresh & Easy Buzz:

August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department

August 17, 2008: Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'

Director of Grocery Sean McCurley Leaving Fresh & Easy Neighborhood Market to Return to Tesco in the UK

Breaking Buzz

Corporate director of grocery buying and merchandising Sean McCurley is leaving Tesco-owned Fresh & Easy Neighborhood Market to return to Tesco's global headquarters in Cheshunt, United Kingdom, where he worked prior to joining the U.S. fresh food and grocery chain as director of fresh foods, Fresh & Easy Buzz has learned. Mr. McCurley was a member of the original group of Tesco executives and others who started up Fresh & Easy Neighborhood Market in Spring 2006.

According to our sources, McCurley is set to leave Fresh & Easy's El Segundo, California headquarters to return to work at Tesco in the UK as early as the end of this month, but no later than June 12.

We're told Sean McCurley is leaving Fresh & Easy on good terms with Tesco.

His specific new position at Tesco in the UK isn't clear. But it will be in the commercial (buying and merchandising) area.

McCurley was Fresh & Easy's director of fresh foods until August 2008, when he became director of grocery, replacing Charlotte Maxwell, who left Fresh & Easy and returned to the UK that month. [See - August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department] [August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK]

Charlotte Maxwell left the employment of Tesco not long after. She moved to Australia in the spring of 2009, joining a group of British supermarket industry veterans who took over management of Australia's Coles supermarket chain. [See - December 25, 2009: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell.

Sean McCurley has held the corporate director of grocery position at Fresh & Easy since Ms. Maxwell's departure in August 2008.

In December of 2009 Jim Jensen, the then director of fresh foods at Fresh & Easy, who was promoted to that position from a category manager slot in August 2008 to replace McCurley, left Tesco's Fresh & Easy Neighborhood Market to accept a key position at Walgreens drug in its start up fresh-prepared foods program, as we were the first publication to report. [See - January 6, 2009: Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy] [January 15, 2010: Just-Exited Tesco Fresh & Easy Fresh Foods Director Jim Jensen to Head New Fresh Foods Initiative at Walgreens Drug Chain.] [January 21, 2010: Walgreens Announces Hiring of Former Fresh & Easy Fresh Foods Director Jim Jensen; Confirms Our January 6 Report]

Jensen was recruited to Walgreens by former Tesco Fresh & Easy vice president of retail operation Brian Pugh, who left Fresh & Easy in the summer of 2008. Pugh joined Walgreens, where he's currently vice president of merchandising, in 2009.

Jim Jensen's vacated director of fresh foods position was recently filled by Tim Lee, who came to Fresh & Easy Neighborhood Market from Tesco's corporate headquarters in the UK. Tim Lee was a corporate director of produce group procurement at Tesco in the UK prior to leaving to join Fresh & Easy as director of fresh foods.

Lee and another Tesco produce category procurement director, Alex Dower, launched Tesco's global fresh produce sourcing buying and supply chain initiative in about mid-2009. The initiative focuses on direct procurement of fresh produce for Tesco stores in the United Kingdom and continental Europe. Lee's responsibilities included setting up satellite offices in growing and sourcing regions around the world and staffing the offices with technical specialists and produce buying teams.

Dower left Tesco last year to join the London-based fresh-prepared foods-maker and retailer Pret A Manger, which in addition to having over 100 shops in the UK and eight in Hong Kong, has over 20 stores in New York City, one in Washington D.C. (soon to be two), and is opening its first ready-to-eat, grab-and-go fresh foods shop in the Chicago area in August of this year.

Tesco's Fresh & Easy Neighborhood Market divides its corporate buying and merchandising function into two departments - grocery and fresh foods. Internally it uses the British industry terms, which are "ambient" for grocery and "fresh" for fresh foods. Fresh foods at Fresh & Easy consists of produce, meats-seafood, dairy-deli and fresh-prepared foods. Everything that's ambient - dry grocery, non-foods and the like - is under the grocery department.

Sean McCurley's departure affords Tesco's Fresh & Easy Neighborhood Market the opportunity to hire a new corporate director of grocery buying and merchandising who has a strong background in U.S. food and grocery retailing in general and extensive experience (mixed with talent of course) in the Western U.S., particularly in California. Fresh & Easy's chief commercial officer (the British industry term they use for buying and merchandising) John Burry is from Tesco in the UK, as is recent arrival, director of fresh foods Tim Lee.

It will be interesting to see if Fresh & Easy Neighborhood Market CEO Tim Mason, who's also a Tesco plc corporate director, takes the above approach or if Tesco replaces Sean McCurley with someone from the UK, as in the case of Tim Lee replacing Jim Jensen. Jensen is an American who never worked for Tesco prior to being hired by Tesco's Fresh & Easy.

Tesco currently has 159 of its small-format (10,000 -to- 13,000 square-foot) Fresh & Easy Neighborhood Market fresh food and grocery stores open and operating in California (Southern and the Central Valley areas of Bakersfield and Fresno), Metropolitan Las Vegas Nevada and Metro Phoenix, Arizona. In a November 27, 2007 presentation made in Southern California by CEO Tim Mason and his senior management team, Tony Eggs, Fresh & Easy's chief real estate officer, said there would be about 200 stores open and operating by February 2009. The grocer is about 60 stores shy of 200 units 15 months beyond February 2009, for those keeping count.

Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy

Jim Jensen, the director of fresh foods for Tesco's Fresh & Easy Neighborhood Market, has left the company, Fresh & Easy Buzz has learned.

According to our sources, Mr. Jensen left Fresh & Easy on December 30. He is no longer employed by Tesco plc in any capacity.

Sources tell us Jim Jensen left Tesco's Fresh & Easy Neighborhood Market to accept a new position with the Walgreens drug chain at its corporate headquarters in Illinois.

Interestingly, if Jim Jensen does join Walgreens, as our sources tell us he is, he will join another Tesco Fresh & Easy alum, former vice president of retail operations Brian Pugh.

Mr. Pugh left Fresh & Easy in September 2008. [September 22, 2008: Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market] and joined Walgreens as a vice president in December of 2008. [December 22, 2008: Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position]

Jim Jensen became director of fresh foods at Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, (Southern) California just 17 months ago, when he was promoted to that position from his then position as category manager for bakery. Bakery is part of the fresh foods department. [Read our August 17 and August 22 stories here for additional background: [August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department] August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK]

Tesco's Fresh & Easy breaks its corporate merchandising and buying function (which it calls commercial, using the British term) into two functional departments: Grocery and Fresh. Each department is headed by a director, which are the top corporate operational merchandising and buying positions at corporate headquarters.

All of the merchandising and buying department category managers report to the two directors.

The two directors of grocery and fresh report to the vice president of commercial (corporate merchandising and buying).

The grocery merchandising-buying department includes all packaged food and grocery items, along with non-foods.

The fresh department includes fresh produce, meats, bakery, other perishables and the grocer's ready-to-eat and ready-to-heat fresh, prepared foods (entrees, side dishes, ect.)

Tesco's Fresh & Easy has yet to name a replacement for Mr. Jensen, according to our sources.

Jim Jensen is the second merchandising-buying director to leave Tesco's Fresh & Easy in the last 17 months.

Charlotte Maxwell, the former director of grocery merchandising, left her position in August 2008.

Ms. Maxwell was replaced by the then director of fresh foods, Sean McCurley.

Jim Jensen was then promoted to director of fresh foods, filling Mr. McCurley's position.

As we've reported in the past, Tesco's Fresh & Easy has experienced considerable employee turnover in its corporate merchandising and buying departments since 2007, with numerous category managers and buyers leaving the company. [August 17, 2008: Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain']

One of our sources tells us Tesco could replace Jim Jensen at Fresh & Easy's El Segundo, California corporate headquarters with a merchandising-buying executive from Tesco headquarters in the United Kingdom. However no replacement has yet been named, based on our information.

Related Stories From Fresh & Easy Buzz:

December 25, 2009: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell

August 17, 2008: Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'

August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department

August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK

September 22, 2008: Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market

December 22, 2008: Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position

March 2, 2008: Walgreens Promotes Former Tesco Fresh & Easy Exec Bryan Pough to VP Merchandising Position; Move Fits Drug Chain's Current Strategic Focus

March 12, 2008: Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team

May 29, 2008: Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 5

January 22, 2009: Neighbors by Location Only: Will Mega-Drug Chain Walgreens' New Focus on Consumables and 'Affordable Essentials' Rob Sales From Tesco's Fresh & Easy?

[Follow Fresh & Easy Buzz on Twitter.com for the latest news and information at www.twitter.com/freshneasybuzz.]

Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department

Tesco's Fresh & Easy Neighborhood Market is in the process of reorganizing its corporate category management and buying department at its El Segundo, California corporate headquarters, Fresh & Easy buzz has learned. (Fresh & Easy calls its buying department "Commercial," in following the British usage, even though its a U.S-based division.)

As we reported earlier, five category managers and buyers have left the company over the last four -to- five months, from February -to- June, 2008.

Key to the corporate category management and buying department organizational changes is the departure of Charlotte Maxwell, Fresh & Easy Neighborhood Market's director of grocery. Ms. Maxwell, who is a British native, plans to return to Tesco PLC in the United Kingdom to assume a director position at corporate headquarters there, sources tell Fresh & Easy Buzz.

Replacing Ms. Maxwell as director of grocery will be Sean McCurely, who currently is director of the Fresh Department. Mr. McCurely is equal to Ms. Maxwell in the corporate organizational chart. Therefore his will essentially be a lateral move within the company.

Grocery and Fresh are the two departments within Fresh & Easy Neighborhood Market's merchandising and buying organization.

Additional changes and new category management and buying assignments include:

>The promotion of existing Bakery category manager Jim Jensen to the director of fresh, replacing Sean McCurley who is assuming Ms. Maxwell's director of grocery position.

>The existing category manager for dairy/deli (which is in the Fresh division) is moving over to the Grocery Department to be the category manager of specialty, baking and canned goods, reporting to Sean McCurley, who he currenly reports to in the Fresh Department.

>A new person has been hired to be the category manager for dairy/deli, replacing the existing category manager, who is moving over to the grocery division. Our sources say his first name is Dan. However they don't have a last name for the new dairy/deli category buyer. He will report to Jim Jenson, who will be the new Fresh Department director, as detailed above.

>The current beverages category manager is getting the confections category added to his portfolio. Previously he was in charge of canned goods along with beverages but no longer will be because that segment is now going to the new specialty, baked goods and canned foods category manager as we detailed above. Beverages is under the Grocery Department.

Additionally, we've learned the wine and beer category, which originally was part of the Grocery Department but was moved some time ago to the Fresh Department for internal reasons, is going to be switched back to its original location in grocery, under the supervision of Sean McCurley, who as we said above is switching from director of fresh foods to grocery director, replaces Charlotte Maxwell who is returning to Tesco in the UK.

Further, our sources tell us the frozen foods category, which currently is in the Fresh Department, likely also will be moved to the Grocery department under Mr. McCurely's supervision.

After the organizational changes are completed, the Fresh Department will consist of the following: fresh meat, fresh produce, bakery and dairy/deli. All other categories will be under the Grocery Department.

According to sources, Fresh & Easy has filled some of the five category manager and buyer positions we reported on here. However, based on the math, it appears there remain openings to fill for bakery goods in the Fresh Department and snacks and breakfast in the Grocery Department. Of course, depending on how the new Grocery and Fresh department directors organize their respective departments, these two category manager positions could be merged, changed or otherwise adjusted.

Fresh & Easy has filled the vacant non-foods category manager position internally, moving former frozen foods category manager Michelle Bonilla into that position. Her non-foods duties include health and beauty care items. At press time we're told the buyer position under her has yet to be filled.

We weren't able to determine as of yet if Ms. Bonilla's frozen foods category manager position has been filled. Sources say there's been talk about trying to fill it internally.

Fresh & Easy Neighborhood Market category managers have started to informally tell their supplier sales representatives about the reorganization and changes. Sources tell us the company has no plans to make a formal, written announcement to the supplier community or the press about the changes however.

In addition to these major organizational changes in the category mangement-buying department, particularly the departure of Ms. Maxwell, there will be some additional minor changes and tweaks, particularly when the department is able to hire the remaining category managers and buyers.

Tesco's Fresh & Easy Neighborhood Market currently has 71 of its small-format (10,000 -to- 13,000 square foot), convenience-oriented combination basic grocery, fresh foods and specialty grocery markets open in Southern California, Metropolitan Las Vegas, Nevada, and in the Phoenix, Arizona Metro region. Numerous additional stores are scheduled to be open the rest of this year and next year, including moving into the new markets of Central and Northern California beginning in early 2009, as we've reported on extensively.

Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market

Brian Pugh, Tesco Fresh & Easy Neighborhood Market's co-vice president of retail operations has left the company, according to information obtained by Fresh & Easy Buzz.

Additionally, we've independently and directly verified Mr. Pugh no longer works for Fresh & Easy Neighborhood Market at its corporate headquarters in El Segundo or elsewhere for the grocery chain.

Brian Pugh left Fresh & Easy Neighborhood Market around the first week of this month, close to the the Labor Day holiday.

In addition, Brian Pugh's wife, who worked for Fresh & Easy Neighborhood Market and whom he met while both worked at the corporate headquarters office in El Segundo, also is no longer with the company, leaving at about the same time he Pugh did.

Mr. Pugh was one of the original Tesco Plc. executives who came to the U.S. to start up the Fresh & Easy Neighborhood Market small-format, convenience-oriented, combination basic grocery and fresh foods chain.

Others key senior corporate executives who in addition to Brian Pugh came from Tesco's United Kingdom or other international divisions to Southern California to start-up Fresh & Easy, and who remain in positions with the company, include CEO Tim Mason, director of marketing Simon Uwins, Tony Eggs, who's head of the retailer's store development program, and others.

As we reported in August, Charlotte Maxwell, who came from Tesco's UK operations to head Fresh & Easy Neighborhood Market's grocery merchandising department, recently returned to Tesco-UK to accept a director-level position there. Her title at Fresh & Easy corporate was director of grocery merchandising.

On March 12, 2008, we reported in this piece, "Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team ," that Tesco was reassigning Jeff Adams, the then CEO of Tesco-Lotus in Thailand, to Fresh & Easy Neighborhood Market to share the vice president of retail operations position and duties with Brian Pugh.

Nearly three months later, as we reported in this May 29, 2008 story, Tesco Fresh & Easy Neighborhood Market confirmed in a press release our March 12 report that Jeff Adams had joined Fresh & Easy at the El Segundo corporate office and that he would be sharing duties with Brian Pugh; both men holding the title of co-vice president of retail operations.

In the May 29 piece we discussed how unusual of an arrangement having co-vice presidents of retail operations is for a grocery chain, commenting in the story that time will tell how such an arrangement works out.

Less than four months later, Mr. Pugh has left Fresh & Easy Neighborhood Market. Jeff Adams now is the vice president of retail operations for the chain, holding that title alone.

We haven't learned the specific reason Brian Pugh left Tesco Fresh & Easy Neighborhood Market, at least not to the verification standards we employ in reporting on Fresh & Easy Buzz. Further, we aren't suggesting Mr. Pugh's departure had anything to do with the relationship between him and Jeff Adams or the fact they shared the position.

However, we have learned two things. First, according to sources in the UK in a position to know, it appears Mr. Pugh no longer works for Tesco Plc. Additionally, we've learned Brian Pugh's departure from Fresh & Easy corporate was rather abrupt -- that he hadn't discussed with any co-workers having any plans to leave the company, nor that he was leaving to accept another job opportunity in the industry or elsewhere.

Mr. Pugh's voice mail at Fresh & Easy's El Segundo office still works. However, it doesn't have his recorded voice on the system. Additionally, his company mobile phone no longer works. An employee verified he no longer works for the company.

Brian Pugh is the latest in a long line of Tesco Fresh & Easy Neighborhood Market headquarter employees to leave the grocery chain this year.

As we reported in this August 17, 2008 story, "Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'," five category managers and buyers have left the company in just a four -to- five month period -- from February -to- June, 2008 -- this year.

Additionally, about 11 category managers and buyers overall have left Fresh & Easy since it set up shop at the corporate office in El Segundo, California about two year's ago.

Further, as we mentioned above, and reported in this piece on August 17, 2008, " Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department," Charlotte Maxwell, who was the director of grocery merchandising since Fresh & Easy launched in the U.S., recently left, returning to the UK to accept a director level position with Tesco there. Ms. Maxwell is a British citizen. [Click here for an addition story on Charlotte Maxwell's departure from Fresh & Easy.

Brian Pugh has a prior working history with both Jeff Adams, who up until this month he shared the vice president of retail operations title and position with, as well as with Tesco Fresh & Easy Neighborhood Market CEO Tim Mason.

Those who know both Mr. Pugh and Mr. Mason describe them as friends. Jeff Adams and Brian Pugh worked closely together in the past at Tesco-Lotus in Thailand. Both men also are former employees of Wal-Mart, Inc.

Since Brain Pugh and Mr. Adams shared the vice president of retail operations position, we don't expect there to be a major problem in terms of Jeff Adams' getting up to speed on the portion of the shared duties that belonged to Mr. Pugh.

However, Brian Pugh did have an institutional memory of the chain since he was part of Fresh & Easy's start up. That knowledge could be a loss to the grocery chain, along with other aspects of his knowledge and experience.

Category Management Report: Fresh & Easy Conducting Wine Category Review and SKU Rationalization; We Offer Some Analysis

Tesco's Fresh & Easy Neighborhood Market has been conducting a category review and sku rationalization in its wine, craft beers and liquor category, Fresh & Easy Buzz has learned from sources involved in the process. The focus is primarily on wines, which is a key product category for the Fresh & Easy stores.

All of the current 96 Fresh & Easy stores, except two in Southern California we are aware of (Hollywood and Van Nuys), sell wine and craft beers. A number of the combination grocery and fresh foods markets sell hard liquor along with wine and beer. Not all of the units offer the spirits for sale however. The Hollywood and Van Nuys stores don't have permits to sell alcoholic beverages of any kind.

The wine category sku rationalization process is being led by category manager Karen Fletcher, who came to Fresh & Easy Neighborhood Market USA from Tesco in the United Kingdom as part of the start-up team. Ms. Fletcher is a native of Britain.

The category review also comes not to long after Fresh & Easy Neighborhood Market went through a series of changes in its grocery merchandising department, which found former director of grocery Charlotte Maxwell, also a British national, leaving Fresh & Easy corporate headquarters and her position to return to Tesco in the UK to accept a director position at corporate headquarters there, as we've thus far been the only publication to report.

Ms. Maxwell was replaced as Fresh & Easy's corporate director of grocery merchandising by Sean McCurley, who previously was director of fresh foods. That position was equal to Ms. Maxwell's in terms of the company structure. Mr. McCurley also is a British citizen.

As part of the wine category review and sku rationalization, Fresh & Easy is looking at reducing the overall number of skus the stores carry in the category, focusing on fewer items and maximizing total sales per item count, according to our sources. Some slow moving wine skus have already been discontinued.

There also has been some merchandising-related discussion as part of the category review involving flipping the wine and beer aisles towards the store's freezer case sections from their current locations, although our sources said they aren't sure of the current status of this previous discussion.

When Fresh & Easy Neighborhood Market USA was first organized, the wine and beer department was under the grocery department, which is normally the case with food retailing companies. However, sometime later category manager Karen Fletcher requested her category be placed in the fresh department and that she report to Sean McCurley, who ran fresh at the time, rather then Ms. Maxwell, who then was in charge of grocery.

Fresh & Easy's senior corporate directors approved of the change. Following Ms. Maxwell's departure back to Tesco in the UK and Sean McCurley assuming her grocery director position, the wine, beer and spirits category was moved back over to grocery with Ms. Fletcher's blessing, according to our sources.

Wine primarily, but also beer and spirits, is a major focus for Fresh & Easy, as it is internationally for Tesco. Karen Fletcher was brought over to the U.S. to build the category as an integral part of the Fresh & Easy merchandising mix. Part of that strategy includes having numerous proprietary, specialty-blended wines produced for the grocery chain, including numerous wines from Australia. Tesco is among the leading retail buyers of Australian wines in the world.

Wine category analysis

The wine category hasn't yet been all that Tesco has expected it to be at the Fresh & Easy stores. Our analysis is this has to do with a number of factors, most notably the fact California wines, which Fresh & Easy stores are short on compared to its competitors, are much more popular than foreign wines in California, Nevada and Arizona, where the current 96 Fresh & Easy grocery and fresh foods markets are located.

Even more so, it has to do with the highly competitive nature of wine, beer and spirits retailing in each of these markets. Not only are major supermarkets like Safeway Stores, Inc. major wine retailers in the Western U.S., for example, but there are category killer retailers like Beverages & More and Cost-Plus World Market, along with Trader Joe's and many others (including scores of independents), that have been selling wine in these markets very successfully for decades. These retails know the market, the customer base, and the wine producers almost as much as they know their own family members in many cases.

As a result, Fresh & Easy has far more competition in its Western U.S. markets than say Tesco has in its home market of the UK when it comes to wine retailing.

The wine category product mix at Fresh & Easy also lacks proper regionalization, sub-regionalization and localization. Perhaps this has been recognized and is one of the reasons for the category review and sku rationalization?

Like it has done with its entire product mix, Tesco basically has tried to merchandise its Fresh & Easy stores in many ways like they are British small-format stores (read Tesco Express) in the UK, merely transplanted to the Western U.S. This has resulted in lots of failures, lost sales and missed opportunities.

Additionally, when it comes to the wine category, there arguably isn't a category that it's more important to regionalize, sub-regionalize and localize. Wines that do extremely well in Northern California, for example, often sell poorly in Southern California. The same regional differences hold true in Nevada and Arizona. Wine brands in the U.S. are regional and even sub-regional. What sells well in San Francisco often isn't what sells well just 80 and 90 miles away in the Central Valley cities of Stockton or Modesto, for example.

Further, since Fresh & Easy has so many proprietary brands, wine brands consumers have never heard of, they have had to hope shoppers might merely like the price or how the bottle looks and give them a try. That's a tough way to sell wine, especially in California.

A number of the proprietary Fresh & Easy wines have done well though, particularly its $1.99 a bottle ($2.99 in Nevada and Arizona) Big Kahuna brand, which is a clone of Trader Joe's famous and super-successful "Two Buck Chuck" value-priced wine brand and line. Big Kahuna is an Australian wine. TJ's "Two Buck Chuck," which last year won the top award in the California State Fair Wine Competition, is a California wine. It's produced by Ceres, California-based Bronco Winery.

In terms of the wine category review and sku rationalization, Fresh & Easy needs to add more California wines, sub-regionalize and localize its wine brand and item selection and merchandising program if it wants to be a successful wine retailer in its respective markets, in our analysis.

This is especially true in California, which is a bigger wine sales market than Nevada and Arizona combined are. (Southern California alone and Northern California alone are both respectively even bigger than both states combined. Since California is the major U.S. wine-producing state, as well as one of the top wine regions in the world, consumers are much more familiar with wines then elsewhere in the U.S. The state also has the highest per capita wine consumption in the U.S.

It also follows that the state has the most competitive and generally the best wine retailers in the country.

California wine consumers are big on sub-regional differences. For example, consumers in Southern California want lots of wines from the Santa Barbara region (a major local wine producing region) want lots of wines in stores from that region, along with from elsewhere in California, the U.S. and the world.

In Northern California (which is the main wine-producing region in the state) consumers expect to see lots of Napa and Sonoma-produced wines on store shelves, along with wines from the coastal region and the Central Valley and Foothill regions. Farther up north it's important to add far Northern California and even some Oregon and Washington State-produced wines.

In fact, in the Central Valley, a good wine retailer also merchandises as many wines from that home region and the nearby Sierra Nevada foothill region than he or she does from Napa and Sonoma.

And in coastal Northern California (the Monterey-Big Sur wine region), good wine retailers there will put a major focus on wines from that wine-producing area.

It's all about localization -- and California is full of local, micro wine regions.

Having a basic selection of proprietary, branded wines is fine for Fresh & Easy. However, as long as that is the major focus in the stores it won't be a top wine retailer in its respective markets. There are too many good wine retailers doing the right things for that to happen.

However, if as part of this category review the retailer focuses on the three things we outlined earlier, it has a far better chance of improving its current wine category sales and eventually joining the ranks of the top wine retailers in the markets it has its stores in.

When it comes to wine merchandising and retailing in the Western USA, especially in California, everything is local, despite the fact imports have an important place in the overall category product mix.

More Reshuffling: Number Two Marketing Exec Follows CMO Uwins Out the Door at Tesco's Fresh & Easy Neighborhood Market

Tesco's Fresh & Easy celebrated birthday number four November 9.



The top-level management reshuffling and integration of the marketing function into a new combination buying-merchandising-marketing department headed by chief customer officer and former chief commercial (buying and merchandising) officer John Burry continues at Tesco's Fresh & Easy Neighborhood Market.

The latest departure from the Fresh & Easy's El Segundo, California headquarters is marketing operations director Paul Madarieta, who was the number two marketing executive in what was until a couple weeks ago the standalone marketing department.

Madarieta, now gone, reported directly to former chief marketing officer (CMO) Simon Uwins, who as we were the first to report in this story on November 10 left Fresh & Easy and Tesco in a top-level shakeup initiated by Philip Clarke, the CEO of Tesco, and Tesco group deputy CEO/chief marketing officer Tim Mason, who's also the CEO of Fresh & Easy Neighborhood Market.

Madarieta joined Fresh & Easy in late 2007 in a retail operations capacity. His title before moving into marketing was regional director of California stores.

He was later brought into the grocery chain's corporate marketing department by CEO Mason, who, according to our sources, believed his knowledge of retail operations, particularly in California, and high-level of enthusiasm would make him a good addition to the department and to the grocery chain's marketing efforts.

Mason, who since March of this year has been Tesco's chief marketing officer and deputy CEO, in addition to remaining CEO of Fresh & Easy, was the United Kingdom-based global retailer's chief marketing officer before coming to California in 2006 to start up Fresh & as its founding CEO.

Madarieta became Fresh & Easy's marketing operations director in January 2010.

As part of the shake up that resulted in Simon Uwins' leaving Fresh & Easy (see here), Madarieta was offered a lessor position in the new, combined department being headed up by John Burry, which he ultimately declined, instead leaving the 184-store fresh food and grocery chain, according to our sources.

Madarieta's position, like that of his former boss Simon Uwins, has been eliminated by Tesco's Fresh & Easy Neighborhood Market.

Fresh & Easy Neighborhood market recently posted an advertisement for a marketing analyst, a position that pays considerably less a salary than the former marketing operations director position, and a whole lot less than the chief marketing officer position formerly held by Uwins. The marketing analyst will work in the new joint commercial (buying-merchandising)-marketing department being headed up by chief customer officer John Burry.

Prior to joining Tesco's Fresh & Easy, Paul Madarieta spent a number of years working for iconic specialty grocer Trader Joe's, which Fresh & Easy Neighborhood Market has sought to emulate in a number of operational and merchandising ways, ranging from store size and look and its focus on private brands, to putting an emphasis on the wine category, among others.

Madarieta started out as a crew member (store clerk) at Trader Joe's. He later became a store captain (store manager), and from there was promoted to a regional vice president position with the Southern California-based grocery chain.

Fresh & Easy Neighborhood Market has hired a number of former Trader Joe's employees.

For example, Larry Biggerstaff, Fresh & Easy's current director of grocery buying and merchandising (reporting to John Burry), was the vice president of merchandising at Trader Joe's prior to joining El Segundo, California-based Fresh & Easy Neighborhood Market last year, as we reported in this September 11, 2010 story - Ex-Trader Joe's VP, Winn-Dixie Exec Larry Biggerstaff New Director of Grocery at Tesco's Fresh & Easy Neighborhood Market.

A number of category managers and buyers at Fresh & Easy also have previously worked for Trader Joe's, which is headquartered in the Southern California city of Monrovia.

For example, in the November 10 story about Simon Uwins' departure, we mentioned that three key mid-level headquarters employees had also recently left the grocery chain.

One of the employees who left in the last 60 days is Mei-Lon Jimenez, who until her departure was the category manager for bakery at Fresh & Easy, and prior to joining the grocery chain worked for Trader Joe's.

In her position at Fresh & Easy Neighborhood Market, Jimenez played a significant role in the start up of the new in-store bakery departments the grocer is putting in many of its stores. We broke the news about the bakery development in this May 18, 2011 story. Fresh & Easy started the in-store bakery installations late this summer. It's on the record as saying its goal is to have the bakeries in about 100 of its 184 grocery markets by the end of this year.

The former Fresh & Easy bakery category manager is now working for the Coles supermarket chain in Australia.

We discovered she joined the down-under supermarket chain two weeks ago when Coles' posted her name on a portion of its website, listing her as its new category manager for cheese. A senior executive at the supermarket chain confirmed the posting. She started at the down-under chain last week, according to the source.

Coles' is headed up by former British supermarket executive Ian McLeod. Its senior management team includes numerous veterans of the food and grocery retailing business in the United Kingdom, including Tesco, as we detailed in this December 25, 2009 piece: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell.

Another related Coles-Tesco Fresh & Easy angle: Charlotte Maxwell, who worked for Tesco for nine years and was the director of grocery buying and merchandising at Fresh & Easy from 2006 until August 22, 2008, joined Coles in April 2009 as its general manager of deli and bakery, which includes cheese. Ironically, she left Coles (about 30 days ago) to pursue other occupational opportunities. (Click here to read about Ms. Maxwell's departure from Tesco's Fresh & Easy and her joining Coles in Australia.)

With the departure of the number one (Simon Uwins) and two (Paul Madarieta) marketing executives at Fresh & Easy Neighborhood Market, chief customer officer John Burry has taken on the dual-responsibility for the corporate commercial (buying and merchandising) and marketing functions at the Tesco-owned chain, as we reported in our November 10 story.

Additionally, as we noted in the story, Tim Lee, who's been Fresh & Easy's director of fresh foods, reporting to Burry, is stepping in as a key player in the grocery chain's marketing efforts. He continues to report to Burry

Lee is being replaced as director of fresh foods by Ian Fletcher, who previously was in charge of Fresh & Easy's kitchen operation. He too reports to John Burry, as does Lee and director of grocery Larry Biggerstaff.

From a balance sheet (cost savings) perspective, Uwins' salary is being absorbed into Burry's, perhaps with a slight bump, while Madarieta's position and salary will essentially be absorbed by Tim Lee. As previously noted, the two marketing positions have been eliminated.

Tesco will report its 2011/12 fiscal year third quarter results on December 8, although it won't likely offer specific sales and loss numbers for Fresh & Easy, as it generally doesn't do so except when reporting half (interim) and full-year results.

On October 5, 2011 Tesco reported a fiscal 2011/12 half-year loss of $112 million for Fresh & Easy, on sales of $470 million. The loss is 21-23% (depending on how recorded) lower than the one reported for Fresh & Easy for the same period in the previous fiscal year.

The United Kingdom-based global retailer's CEO, Philip Clarke, says Tesco will break-even with Fresh & Easy Neighborhood Market by the end of the 2012/13 fiscal year, which is 15 months away. The 2012/13 fiscal year ends February 2013. Tesco reports its sales and profits/loss for the year in April 2013.

Post Script: Take a look at prediction number 7 in this story from last year - December 30, 2010: Seven Predictions For Tesco's Fresh & Easy Neighborhood Market For 2011.

Also see these columns by our 'The Insider' columnist, all published before Philip Clarke became CEO of Tesco in March 2011:

>October 8, 2010: Incoming Tesco CEO Philip Clarke Needs to 'Imagine' When it Comes to Fresh & Easy Neighborhood Market USA

>September 13, 2010: Reading Philip Clarke's Tea Leaves: Might A Mixed Corporate/Franchise Model Be in Fresh & Easy Neighborhood Market's Future?

>June 12, 2010: Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

Additional Related Stories

November 17, 2011: 'Meat Guru'-Category Manager Bill Arnold Out at Fresh & Easy Neighborhood Market

November 10, 2011: Chief Marketing Officer Uwins Out in Top-Level Reshuffling at Tesco's Fresh & Easy Neighborhood Market.

October 27, 2011: Former Meat Buyer Wins $400,000-Plus Legal Judgment From Fresh & Easy Neighborhood Market

February 23, 2011: Incoming Tesco CEO Philip Clarke Visits America - And Fresh & Easy Neighborhood Market

February 28, 2011: Changing of the Guard: Clarke Takes Over the Reins as Tesco CEO Wednesday

Click on this link - Fresh and Easy headquarters personel changes - for more related stories.

[Photo credit: Fresh & Easy Neighborhood Market.]

Just-Exited Tesco Fresh & Easy Fresh Foods Director Jim Jensen to Head New Fresh Foods Initiative at Walgreens Drug Chain

Connecting the Dots - And More

On January 6, 2010 we broke the news in this report [Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy] that Jim Jensen, Tesco Fresh & Easy Neighborhood Market's director of fresh foods, had left the company.

In the January 6 story we also reported that Mr. Jensen had left his position at Fresh & Easy to take a job with the Walgreens drug chain at its corporate headquarters in Deerfield, Illinois.

We also reported in the January 6 piece that Jim Jensen would join another Tesco Fresh & Easy corporate headquarters former employee at Walgreen's - Jeff Pugh, Fresh & Easy's former vice president of retail operations.

Mr. Pugh left Tesco's Fresh & Easy in September 2008, as we reported in this story: September 22, 2008: Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market.

In December 2008 Brain Pugh joined Walgreens as its corporate vice president of format development, a new position at the drug chain, as we reported in this story: December 22, 2008: Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position.

In March 2009 Brain Pugh was promoted by Walgreens, as we detailed in this report: March 2, 2009: Walgreens Promotes Former Tesco Fresh & Easy Exec Bryan Pugh to VP Merchandising Position; Move Fits Drug Chain's Current Strategic Focus.

In our reporting for the January 6, 2010 story, we had information that Jim Jensen was not only leaving Tesco's Fresh & Easy to join Walgreens but that he is taking a new position at the drug chain - director of fresh foods.

However, we didn't have enough source confirmation on that particular aspect of the story to go with it in print, based on our source and fact checking criteria - so we left it out, even though we believed it to be the case based on the information we obtained.

But today Bloomberg reporter-writer Carol Wolf helps us - and the ongoing story - out a bit.

In an interview piece today, she quotes Walgreens' vice president Brian Pugh from a January 11 interview she had with him (just five days after our Jim Jensen story was published) as announcing publicly that Walgreen Co. is going into the fresh foods merchandising business.

Here's what is reported in the piece today (in italics) from the January 11, 2010 phone interview with Brian Pugh:

Walgreen Co. plans to offer fresh foods and prepared meals to draw “time-starved” shoppers to its more than 7,000 stores, taking on retailers such as Target Corp. and Kroger Co. The drugstore chain has been talking with foodmakers including Unilever NV , Nestle SA and Sara Lee Corp. about creating private-label and branded products, said Bryan Pugh , vice president of merchandising.

“Everyone is time-starved and we have the most convenient 7,000 locations in the U.S.,” Pugh said in a Jan. 11 telephone interview. “They’re on-the-way-home destinations that are easy to get in and out of and will provide a good value.” He declined to say when the project will be implemented or how much it costs.

Walgreen, based in Deerfield, Illinois, must sort out supply and distribution issues and test in some markets before introducing freshly prepared foods such as salads, cut fruits, ready-to-bake pizzas and sandwiches into more stores, he said. The goal of the program, along with the sale of beer and private-label wine, is to boost revenue , Pugh said.

[You can read the entire Bloomberg piece here.]

In the Bloomberg interview Brian Pugh confirms Walgreens is getting into the fresh foods merchandising business in some form.

It's important to note though that unlike Tesco's Fresh & Easy, Walmart, Safeway and most other major food retailing chains that develop and operate their own fresh foods programs in-house, Walgreens is looking to (or already has found) find outside vendors/suppliers to actually make the fresh foods products it introduces in its drug stores. This in fact is a smart idea, since it would make little sense for the drug chain to create its own in-house fresh foods program given the high start up and operational costs associated with it. It's much better, if managed well, for the retailer to use outside suppliers to make the products.

Interestingly though - and remember we are connecting dots - in the Bloomberg interview piece Brain Pugh declines to name the new director of fresh foods Walgreens has hired to head up its fresh foods program - and no name is reported in the story.

Here's what Walgreen Co. vice president Pugh told the Bloomberg reporter as she reports in her piece today (in italics):

Walgreen hired a director of fresh foods, who will begin work in several weeks, Pugh said. He wouldn’t name the person.

Since Bloomberg's Carol Wolf helped us out a bit with this ongoing story in her piece today, it would only be fair to return the favor. So we will.

The name of the new director of fresh foods for Walgreens is Jim Jensen, who left his position as director of fresh foods at Tesco's Fresh & Easy on December 31, 2009, as we reported on January 6, 2010 in this story. Mr. Jensen is taking a little time off, packing up and moving to Illinois from Southern California, and will start work at Walgreen Co. in a week or two.

Walgreens has not confirmed publicly or officially confirmed Jim Jensen as the new head of its fresh foods merchandising efforts.

The story of Walgreen's going into the fresh foods business - although we stress we don't see it offering an as complete and extensive line of fresh, refrigerated ready-meals and other products like Tesco's Fresh & Easy and Safeway do, for example - gets all the more interesting because in California, southern Nevada and Arizona, where Fresh & Easy has its current 134 stores, a key store location strategy for Tesco has been to locate many of its Fresh & Easy Neighborhood Market stores right next to or near a Walgreens drug store unit.

Tesco and Walgreens have even partnered with shopping center developers to be the two key retail anchors - food and drug/pharmacy - in a number of new and remodeled centers.

[Fresh & Easy Buzz started connecting Walgreens and Tesco Fresh & Easy dots in late 2008 and early 2009. Suggested reading: January 22, 2009: Neighbors by Location Only: Will Mega-Drug Chain Walgreens' New Focus on Consumables and 'Affordable Essentials' Rob Sales From Tesco's Fresh & Easy? December 22, 2008:Drug Chain Walgreens to Slow New Store Growth; Despite Tesco Fresh & Easy's Recent Announcement to Do Similar, We Suggest An Analogy is Misplaced.]

Since Brain Pugh was in charge of retail operations at Tesco's Fresh & Easy, do you suppose he might see the irony - and potential opportunity - in the fact that so many Fresh & Easy and Walgreens units are located so close together in California, Nevada and Arizona?

Further, since fresh foods (and all consumables) falls into his responsibility list as the merchandising vice president at Walgreens, might Brain Pugh be seeking to use the close proximity of these numerous Fresh & Easy and Walgreens stores as a competitive advantage for the Drug chain in terms of fresh foods - and other consumables - merchandising and retailing?

And, in addition, might he like to use the irony of the Fresh & Easy and Walgreens units' close proximity as a retail category (fresh foods and all consumables) stiletto against Tesco, which he worked for in Asia for many years before coming to Southern California as part of the team starting up Fresh & Easy? When Brain Pugh left Fresh & Easy he left his career at Tesco plc as well, even though it began with the company long before Fresh & Easy was envisioned?

With Walgreen Co. getting into the fresh foods category - which is about 40% -to- 50% of the total offerings in a Fresh & Easy store (the other half being packaged goods and grocery products in various categories) - combined with the fact that numerous Fresh & Easy stores are located near Walgreen's stores in Tesco's three markets mentioned above - Tesco's Fresh & Easy will find itself with new and added competition right next door or across or just down the street at many of its locations.

Walgreen's already sells limited selections of packaged food and grocery items, household goods, beer, wine (and spirits in some locations) and perishables in its stores - and as we've reported and written about has been expanding its food and grocery selections in the stores for well over a year now - so that is existing competition close by for Fresh & Easy. But adding the fresh, prepared foods in whatever dimension and SKu count will add a new layer of competition to a category that Tesco believed was underdeveloped in the U.S., using that belief as one of the key reasons it invested in and developed the Fresh & Easy concept and chain.

The story is far from over - and it will get even more interesting. We will have more to come soon.

Connecting the Dots - And More: Related stories from Fresh & Easy Buzz:

>December 25, 2009: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell

>August 17, 2008: Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'

>August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department

>August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK

>September 22, 2008: Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market

>December 22, 2008: Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position

>March 2, 2008: Walgreens Promotes Former Tesco Fresh & Easy Exec Bryan Pough to VP Merchandising Position; Move Fits Drug Chain's Current Strategic Focus

>March 12, 2008: Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team

>May 29, 2008: Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 5

>January 22, 2009: Neighbors by Location Only: Will Mega-Drug Chain Walgreens' New Focus on Consumables and 'Affordable Essentials' Rob Sales From Tesco's Fresh & Easy?

>December 22, 2008: Drug Chain Walgreens to Slow New Store Growth; Despite Tesco Fresh & Easy's Recent Announcement to Do Similar, We Suggest An Analogy is Misplaced

>March 29, 2008: Tesco's Fresh & Easy 'Taking a Pause' From New Store Openings: A Full Review In the Works

Key 'Veteran' Fresh Produce Category Manager Chris Harris Leaves Fresh & Easy Neighborhood Market

The produce department in Tesco's Fresh & Easy Neighborhood Market stores. [Photo credit: Fresh & Easy Neighborhood Market]

Breaking Buzz

Fresh on the heels of former director of grocery buying and merchandising Sean McCurley's departure from Tesco's Fresh & Easy Neighborhood Market to return to Tesco in the United Kingdom (UK) at the end of May [May 23, 2010: Director of Grocery Sean McCurley Leaving Fresh & Easy Neighborhood Market to Return to Tesco in the UK], the El Segundo, California-based fresh food and grocery chain's corporate buying and merchandising department has lost another key player: Fresh produce category manager Chris Harris.

Harris, who was one of the few - if not the last - remaining original category managers who joined Fresh & Easy in late 2006-2007 before the first stores were opened, has left the company to pursue another employment opportunity in the fresh produce industry, Fresh & Easy Buzz has learned.

Since opening its first stores in November 2007, Fresh & Easy has seen numerous category managers and buyers come and go. [See -August 17, 2008: Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain' and August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department.] In fact, Chris Harris could be called the "departed veteran category manager" at Fresh & Easy because of the rapid turnover over the last three years in the corporate buying and merchandising department. The department is run by John Burry. He previously worked at Tesco in the UK. He came with CEO Mason and the initial group of senior executives from across the pond to start up Fresh & Easy in 2006.

The fresh food and grocery chain is also already on its second set of directors in both fresh foods and grocery in the corporate buying department. [See first link above, plus - August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK; January 6, 2009: Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy; and May 23, 2010: Director of Grocery Sean McCurley Leaving Fresh & Easy Neighborhood Market to Return to Tesco in the UK.] Fresh & Easy divides its corporate buying and merchandising department and function into two sections - fresh and grocery. Fresh includes produce, perishables and fresh-prepared foods. Grocery (which the grocer calls ambient, using the British industry term) includes dry grocery and everything else that's "ambient."

Chris Harris, 34, was a key player for Fresh & Easy's corporate buying and merchandising department because, among other positive attributes, he was known to be an aggressive, "get it done" fresh produce category manager, as well as a solid relationship builder, according to growers, vendors, and others who worked with him during his about three years at the fresh food and grocery chain of 159 stores. They also say Harris loves the fresh produce business in general, and demonstrated it in his job at Fresh & Easy Neighborhood Market, and in vendor relations.

Harris also is a native of the UK - although he never worked for Tesco before joining Fresh & Easy - which offers a certain cachet at the grocer's corporate headquarters in Southern California. Virtually all of Fresh & Easy Neighborhood Market USA's senior executives, from CEO Tim Mason on down, all came from the UK, and all worked for Tesco there previously.

Chris Harris first came to the U.S. in 2005, after working for a lettuce growing company in the UK, to work in the grower-processor side of the fresh produce industry. He working for the Ready-Pac and Professional Produce companies in Southern California before joining Fresh & Easy in 2007.

Additionally, he was a key player for the buying and merchandising department at Tesco's Fresh & Easy because he has a strong institutional memory of the start up of the chain in 2007, since he was key in getting the fresh produce category set up and functioning. That can be a difficult type of experience to replace, particularly at such a young grocery chain.

The timing of Harris' departure comes just shortly after a new director of fresh foods - Tim Lee - started at Fresh & Easy Neighborhood Market.

Lee only recently joined Fresh & Easy Neighborhood Market from Tesco in the United Kingdom, replacing Jim Jensen, the former director of fresh foods who left to take a job helping to start up the fresh, prepared foods program at Walgreens drug. [See - January 6, 2009: Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy; January 15, 2010: Just-Exited Tesco Fresh & Easy Fresh Foods Director Jim Jensen to Head New Fresh Foods Initiative at Walgreens Drug Chain and January 21, 2010: Walgreens Announces Hiring of Former Fresh & Easy Fresh Foods Director Jim Jensen; Confirms Our January 6 Report]

Tim Lee's specialty at Tesco's corporate headquarters in the UK, where he was a produce category procurement director, was fresh produce. There Lee and another Tesco produce category procurement director, Alex Dower, launched Tesco's global fresh produce sourcing buying and supply chain initiative in about mid-2009. The initiative focuses on direct procurement of fresh produce for Tesco stores in the UK and continental Europe. Lee's responsibilities included setting up satellite offices in growing and sourcing regions around the world and staffing the offices with technical specialists and produce buying teams. [More here.]

Sources tell us Lee has started initiating various changes in Fresh & Easy's fresh produce procurement and related policies and practices, based on some of the experiences he had with Tesco in the UK. As far as we're aware, Tim Lee has no previous experience in the U.S. food and grocery retailing or fresh produce industries.

Prior to Lee's arrival, Chris Harris was the point man for fresh produce procurement, pretty much running the category, with supervision by Jim Jensen, who's area of expertise is more in the fresh, prepared foods and related categories rather than produce.

Tesco's Fresh & Easy hasn't replaced Harris yet, nor is it currently advertising for his produce-bakery category manager position as of today.

Integrated Retail & Twitter Wine Promotion Rates Fresh & Easy Neighborhood Market A Gold Medal

Wine & Beer Category Report: News/Analysis/Commentary

Tesco's Fresh & Easy Neighborhood Market today launched a full-line-drive, mix and match wine category promotion in its 159 fresh food and grocery stores in California, southern Nevada and Metropolitan Phoenix, Arizona.

In the promotion, which runs from June 23 -to- July 6, 2010, customers get 20% off the total of any six or more bottles of wine they purchase.

Additionally, Fresh & Easy is giving away a reusable cotton wine bag with all single-customer wine purchases of $25 or more.

In and of itself there's nothing particularly unique or special about the promo as grocer wine category promotions go, although we like the free wine bag addition. It adds an additional layer to the promotion, beyond just the 20% price focus.

But Fresh & Easy Neighborhood Market is kicking off the wine promotion with a "Twitter Wine Tasting" this evening, starting at 7 pm pacific time.

This is the grocer's second such "Twitter Wine Tasting," in which participants purchase the wines to be tasted and pondered in the comfort of their homes at a Fresh & Easy store, and then share their questions, comments and evaluations on the various varieties of vino via Twitter.com.

The first such tasting was on February 9 of this year. Read our story about Fresh & Easy's first "Twitter Wine Tasting" - February 8, 2010: 'I Taste Therefore I Tweet': Fresh & Easy Set to Hold 'Twitter (Wine) Tasting' Tomorrow Night.

Tonight's wine tippling tweeters will be tasting three of Fresh & Easy Neighborhood Market's proprietary wines. The three brands-varieties are: Napa Family Vineyards Chardonnay, which retails for under $12; The Vine Yard Late Harvest Riesling, which sells for under $8; and Re del Castello Chianti Classico, which goes for under $10 at Fresh & Easy Neighborhood market stores. Fresh & Easy is featuring two of the varieties, along with a few others, in its "Friends of Fresh & Easy" e-mail promo which it sent out late yesterday. That's what we call "positive, practical, promotional merchandising integration," or PPPMI for short. More on that concept a little later below.

In order to participate in the virtual wine tasting event (virtual on twitter but real at home) people with a Twitter account - those who don't already have one can create one in a couple minutes - simply sign up at Taste Live, send an RSVP here, buy the three wines at a Fresh & Easy store, and then log-in back at Taste Live, at 7 pm tonight.

According to the grocer, Fresh & Easy Neighborhood Market wine category manager Karen Fletcher will be tweeting, answering questions and following the tasters' evaluations at its Twitter.com account - @fresh_and_easy - starting at 7 pm. The tippling tweeters need only to use the Twitter hashtag #FreshEasyWines in order to be able to view the wine tweets of their fellow tasters on Twitter tonight.

Positive, practical, promotional merchandising integration

As regular Fresh & Easy Buzz readers are aware - and non-regular readers of the blog will soon become aware of - we're big advocates of integrated promotions that tie-in what happens on the store floor (merchandising and promotional merchandising) with various forms of media, particularly forms of interactive social media like Twitter, Facebook and the like.

We've been suggesting to Fresh & Easy Neighborhood Market in our strategy session-oriented posts since about mid-2008 that the grocer needs to focus much more on doing integrated promotions across all categories. One of the Fresh & Easy's problems or challenges, in our analysis, has been a failure to integrate; to use multiple platforms, integrating on the store floor merchandising with various forms of media. For example, we liked this recent promotion at Fresh & Easy. But the grocer failed to take it beyond the stores; to integrate it with other media in a meaningful and significant way.

Merchandising and media-related promotions such as the wine promotion-twitter event, which tie-in the stores and the larger consumer world, are something Fresh & Easy needs to do more regularly in order to create excitement, drive sales into the stores, build brand, and create new, much-needed customers.

In terms of the various categories, in our analysis the best merchandising and promotional activity Fresh & Easy has done thus far is in the wine category.

Wine category manager Karen Fletcher has been in her position at Fresh & Easy Neighborhood Market from the very beginning. Therefore we give her the primary credit for this development.
Fresh & Easy's wine and beer category has flipped-flopped between the directors of the grocer's two buying and merchandising departments, fresh and grocery - and not totally against Ms. Fletcher's objection - three times since 2007.

The wine and beer category was originally (and logically) under the grocery department. But it later was moved to the fresh department for internal reasons. Then in the summer of 2008 the category was switched back to grocery, under the supervision of Sean McCurley, who made a lateral move at the time from director of fresh foods to grocery director - and who recently returned to Tesco in the UK - replacing Charlotte Maxwell, who departed Fresh & Easy to return to Tesco in the UK, which she left the employ of shortly after. (Yes, Sean McCurley and Karen Fletcher had a strong working relationship. They both also came to Fresh & Easy from Tesco in the UK.)

Tweet, drink and be merry

While a Twitter-based wine tasting doesn't have the glamour and excitement of a live tasting, say at a Napa Valley winery, it certainly offers some advantages. Among those advantages include: being able to dress comfortably - although we don't want to hear about participants wearing boxer shorts or old sweat pants while wine tasting and tweeting tonight - relaxing on your couch at home with a laptop computer nestled close by or a smart phone in hand, and being able to stock the fridge with one's own choice of foods to cleanse the palate between bottles of wine.

From a marketing and merchandising standpoint for Fresh & Easy the tasting offers the grocer a chance to get people into the stores to purchase the three bottles of wine, and then hopefully buy additional food and grocery items. But much more than that, as we said earlier, it integrates what is happening at retail - the June 23 -to- July 6 wine promotion - with a wider social media-based promotion, thereby helping over time (with repetition and other different integrated promotions added on) to create a story around the wine category at Fresh & Easy Neighborhood Market.

Doing this - integrating what goes happens on the store floor with media promotions and events - and doing it regularly, comprehensively and in a creative yet practical manner (need to sell product as well as create buzz) is what good merchandising and promotions are all about, as in creating and telling a good story, which in many ways is the essence of a potentially successful marketing campaign.

Salute! In 140 characters or less of course.

Readers: Click here to read a selection of past posts in Fresh & Easy Buzz on wine category merchandising and related topics.