Mid-Week Fresh & Easy Roundup: Fresh & Easy Gets Caught in A Land Use Dispute; Those Near-Famous Mixed Grill Packs; More On Manhattan Beach

Tesco's Fresh & Easy Neighborhood Market

Land use dispute puts Fresh & Easy in the middle of squabble

The San Diego Union-Tribune newspaper is reporting today about an escalating land use dispute between commercial developer Pacific Development and a competing commercial developer and non-profit group over a 4.3 acre vacant piece of land in the city-owned by the Southeast Economic Development Corp.--an arm of the city of San Diego Redevelopment Agency--that's set for a major development. Tesco is in the middle of this escalating dispute by virtue of the fact one of its Fresh & Easy Neighborhood Market grocery stores is set to be the retail food store anchor of the large commercial development.

Read the interesting piece in today's San Diego Union Tribune here. Tesco currently has six Fresh & Easy grocery stores in San Diego, with two more new stores currently in development.

Those near-famous Fresh & Easy mixed meat grill packs

On Tuesday July 1, we wrote here (see the item: "Fresh & Easy offering A 4th of July cookout for the frugal,") about Fresh & Easy's 4th of July holiday promotion--a mixed grill meat pack featuring beef burgers patties, mild sausage and chicken parts--along with a 12-pack of the retailer's store brand Latin or Hispanic-style beer--for twelve bucks.

We mentioned (tongue planted near-fully in cheek) in our Tuesday piece that since the promotion combined the meats and beer, non-beer drinkers might be out of luck, or perhaps would have to give the beer away and keep just the mixed grill pack.

In a press release distributed today (July 3), Fresh & Easy Neighborhood Market added some clarification (perhaps by coincidence or perhaps not) to the mixed meat grill pack and beer promotion, pointing out in the release that the mixed grill can be bought by itself for the promotional price of $4.99. At nearly five pounds total, that's about $1 per-pound.

In our piece yesterday, we pointed out we thought the twelve buck deal for the meats and 12-pack of beer was a good value because among other things, we estimated a super-hot deal for a 12-pack of beer like the one being promoted would be about $5.99 plus tax, thereby offering the mixed grill meat pack for about a dollar a pound, which is super-cheap.

Looks like we were, as our British friends say, rather "spot on" in terms of the respective promotional price of the mixed grill meat pack and the 12-pack of beer.

In its press release issued today, Tesco's Fresh & Easy Neighborhood Market said it sold nearly 1,400 packages of the mixed meat grill packs during a 12-hour period yesterday. There was no mention of how many 12-packs of the Latin-style beer were sold however.

More on the Manhattan Fresh & Easy store grand opening

UFCW union reps vs Fresh & Easy store employee throw down: As we reported yesterday representatives of the United Food and Commercial Workers retail supermarket clerks union were out in force picketing yesterday at the Fresh & Easy Neighborhood Market new store grand opening at 1700 Rosecrans in Manhattan Beach, (Southern) California. The store is the 62nd Fresh & Easy market and the first new store to open since the retailer took a three month new store opening break in early April.

The Fresh & Easy Buzz correspondent covering the store grand opening yesterday reports a scene occurred between about two dozen UFCW picketers and a group of Fresh & Easy store employees. While Fresh & Easy Neighborhood Market CEO Tim Mason was speaking, the group of UFCW picketers began heckling him, at which point a group of Fresh & Easy store employees began a round of loud cheers attempting to drown out the verbal protests from the union representatives. The union representatives eventually stopped.

CEO Mason has thus far refused to meet with UFCW leaders who want to discuss potential unionization of the Fresh & Easy chain. U.S labor laws do not require him to meet with the union.

Does this outburst of cheers by the non-union Fresh & Easy store employees mean the UFCW could be alienating the very store-level workers it wants to organize and bring into the union? Or was it just an appropriate response by the employees to the picketers rudeness?

Could the union's tactics, such as the picketing and verbal demonstrating at yesterday's Manhattan Beach store grand opening, along with the negative-oriented brochures, which as we reported here the union distributed to neighborhood residents a few days before the store opened, be causing a backlash against the union among Fresh & Easy employees?

Perhaps the UFCW needs to take a lesson from Democratic Presidential candidate Barack Obama--who the union supports for President and even got to send a letter to Tesco CEO Terry Leahy and Tesco Fresh & Easy Neighborhood Market CEO Tim Mason, asking them to meet with union leaders--and conduct a positive campaign, as Senator Obama has vowed to do in his bid to be President of the United States.

After all, after many years of trying and using similar strategies and tactics, the UFCW has failed to unionize non-union food and grocery retailers Wal-Mart, Inc., Whole Foods Market, Inc, Trader Joe's and a few others.

Perhaps the union would be wise, and more successful, if it created a campaign based on communicating all the positive aspects, of which there are many, being a member of the UFCW could bring to Fresh & Easy Neighborhood Market and other non-union supermarket chain store-level employees?

The last thing one wants to do after all--be it in food retailing, politics or union organizing--is to alienate the precise constituency you are trying to get to be a customer, vote for you, or become a member of your union. It's food for thought on the eve of Independence Day.

Cold and Sterile to warm and fuzzy? At yesterday's Manhattan Beach store grand opening, Simon Uwins, director of marketing for Fresh & Easy, said the following to members of the press, including the Fresh & Easy Buzz correspondent, at the event: "There were some who said it felt a little bit cold and sterile (the inside of Fresh & Easy grocery stores)," Mr. Uwins said. "We went into all our stores and, if you like, warmed them up, telling them about what we're about and adding color."

The warming up Mr. Uwins is referring to is the new interior design package Fresh & Easy first installed in its store in Laguna Beach, (Southern) California in May, as we wrote about in this May 16 piece, and is in the process of implementing in all of its existing stores.

Since January of 2008, Fresh & Easy Buzz has argued the stores are just that, a bit cold, sterile and lack a sense of place. Of course, from January to just recently, Mr. Uwins and the other Fresh & Easy Neighborhood market senior executives have in so many words claimed that position was rubbish, despite the fact we first even thought about it because numerous Fresh & Easy store-level employees and shoppers (and ex-shoppers) expressed that opinion to us.

Mr. Uwins said yesterday the Fresh & Easy executives came to the conclusion the stores are/were a bit sterile and cold based on customer feedback in the form of consumers filling out comment cards, emails to the effect sent to corporate headquarters, and from interviews in the stores with customers.

We're glad to hear Fresh & Easy listened to its customers, and to those store-level employees who spoke up about the store design. However, its fair to say..."What took you so long?" It's also fair to ask: "Why the absolute denial for so long that there just might be a problem with the look and feel of the stores?" But, we cheer the retailer's consumer response to the interior design issue in the form of Fresh & Easy's attempt to improve it with the new interior design improvements.

However, we've seen the Laguna Beach store interior post enhancements. It is improved. But the jury is still out on by how much.

The store interior look is warmer and a bit less sterile. However, the store still lacks a feeling of a sense of place, and in our analysis needs a few other changes and enhancements in order to provide the type of customer shopping experience Tesco needs to create in order to achieve its goal of making the Fresh & Easy stores primary shopping venues. But, we'll save that for another time. After all, there can always be a round two of enhancements now that the Fresh & Easy guys have listened to the customers, something we give them props for doing.

Short takes

All in the family: Tesco Fresh & Easy Neighborhood Market CEO Tim Mason was joined at the Manhattan Beach store grand opening yesterday by his son and three daughters who all live in the United Kingdom. We wish them an enjoyable Independence Day holiday weekend visiting California. Don't forget to spend some time at the pier in Santa Monica, check out Hollywood Blvd., (while there you can do a store check for Dad at the Hollywood Blvd. Fresh & Easy), enjoy the beaches, and hit an expensive restaurant every night. After all, with the U.S. dollar so low, you can live large with British pounds and Euros right now in America. And, the California economy needs all the help it can get.

Two hundred Fresh & Easy stores by end of February 2009: Marketing chief Simon Uwins said at the grand opening Tesco plans to have 200 Fresh & Easy stores open by the end of February 2009. This is the latest estimate in terms of store count by the retailer. Originally, Tesco hoped to have 200 Fresh & Easy stores opened by the end of this year. later it revised that number down to 150. However, if it meets the goal, having 200 stores opened by the end of February, 2009 is pretty close timing to that original estimate.

To get to 200 stores opened by the end of 2009, Tesco's Fresh & Easy will need to open 138 new stores between now and then, over that eight month period. That's lots of new store openings in eight months. There are currently 62 Fresh & Easy stores open. The retailer has announced it will open at least 30 new stores between July and of this year. That will give Fresh & Easy about 92 stores by the end of September, meaning in order to reach 200 stores by the end of February, 2009, it will need to open an additional 108 stores in the five month period from October 1, 2008 -to- the end of February, 2009. Achieving that is questionable.

For example, in the six month period from November, 2007 -to- April, 2008, Tesco opened 61 Fresh & Easy markets, which was a rapid pace in and of itself. In order to reach 200 stores by the end of February, 2009, the retailer will have to open more than twice that many new stores in a period of time with only two additional months (eight month period) than from November, 2007 -to- April, 2008. 138 new stores in eight months amounts to opening one new store about every other day between now and the end of February, 2008. Hold on to your grocery aprons folks.

Opening day customer count: Tesco's Fresh & Easy Neighborhood Market says 2,600 shoppers came through the doors of the new Fresh & Easy grocery store in Manhattan Beach on grand opening day yesterday. Wonder if that's counting the UFCW picketers and all the employees from Fresh & Easy Neighborhood Market corporate headquarters--which is less than a mile away from the store--who were at the grand opening yesterday?

All teasing aside, 2,600 is a good number for an opening day for the retailer. And, based on Fresh & Easy's report that 1,400 packages of the mixed grill meat pack on promotion were purchased yesterday, that amounts to more than one mixed grill pack for every other customer who visited the store sold. But at a buck a pound, how could they resist.

Store employee counts: Speaking of counting, numbers and press releases, we hope the same person who's been counting Fresh & easy store-level employees didn't do the customer and mixed grill meat pack sales counts yesterday.

In the press release issued today Tesco's Fresh & Easy PR department says the average number of employees per-store is between 20 -to- 30 people. In the July 1 press release about the mixed grill pack promotion, and in the July 2 release about the Manhattan Beach store grand opening, the PR department wrote each Fresh & Easy store employs an average of 25 people. In most all of Tesco Fresh & Easy's press releases prior to the July 1 release, the PR department said Fresh & Easy stores employee about 20 people per-store.

Having written more than one press release, Fresh & Easy Buzz knows how boring of a task it can be. We aren't nit-picking over the numbers: 20, 25, 30, all in the same ballpark. But we suggest the PR folks just stick to one scheme. If its closer to 20 people per-store, go back to that. If closer to 25, stick with that number. If its too hard to call, go with the 25 -to- 30 range figure.

On becoming the store check store of the chain: The Fresh & Easy Buzz correspondent covering the Manhattan Beach store grand opening asked a few of the store's employees yesterday how they felt working at the store in the chain located the closest (less than a mile) form the corporate headquarters, and thus becoming the store where company executives and others will be spending lots of time on a regular basis doing store checks, as well as using it as the store where they bring visitors, by virtue of the fact its so close to the main office.

Our correspondent says most all of the employees asked said they really hadn't even thought about it. However, the correspondent reported a couple of the employees did raise their eyebrows a bit shortly after the question was asked; and one said: "I will think about it now."

The three month pause and press coverage: Tesco's Fresh & Easy is garnering much more press coverage over the Manhattan Beach store grand opening than it normally would have if the retailer had not taken the three month new store opening break from early April until yesterday, when the store opened, in Fresh & Easy Buzz's analysis.

There's a good marketing and PR lesson in that, which is: when the media gets too much of something, like a new store opening every two or three days, it tends to habituate to it and thus give it less coverage.

On the other hand, the press loves stories. And the opening of the first new store after a three month new store opening pause lends itself to story telling, although we must say if you look at much of the coverage its essentially amounts to the reprinting of Fresh & Easy's press releases with a few words changed around and perhaps an original headline added. Such is mainstream media economics today, especially in the daily newspaper business. Good job by the Los Angeles Times and a few other daily newspapers though. The LA Times' piece: Fresh & Easy sets up shop a few paces from rival Trader Joe's. [The writer also is a Fresh & Easy Buzz reader, which we don't hold against him.]

The Trader Joe's next door: The Fresh & Easy Buzz correspondent checked out the Trader Joe's grocery store, which is located just a hop, skip and a jump from the Manhattan Beach Fresh & Easy store in the Manhattan Beach shopping center, twice at different times yesterday. The Fresh & Easy is at 1700 Rosecrans and the Trader Joe's is at 1800 Rosecrans. Both stores even share the same parking lot. [Read our photo piece, "Manhattan Beach First Look: Fresh & Easy Buzz Has First Photos of First New Fresh & Easy Grocery Store Set to Open After the Three Month Pause," which discusses and depicts the proximity of the two stores in words and pictures.]

On both Trader Joe's store check instances, the correspondent said the TJ's was full of customers. Perhaps the Fresh & Easy grand opening had a spill-over effect for the TJ's: shoppers hit the grand opening, did some shopping, then also hit the Trader Joe's across the way. It will be interesting to observe over time how the two small-format grocers do respectively being so close to each other in the shopping center.

Food and Grocery Industry is One of the Brighter Segments, particularly in the Western USA, in an Otherwise Currently Dim U.S. Economy

Despite the current gloom and doom U.S. economy, the retail food and grocery retailing industry is one of the very few if not at least bright sectors of the economy at present in terms of growth and new hiring, at least one of the brighter ones.

Overall, the general U.S. retailing sector is one of the four industry sectors, along with construction, manufacturing and financial services, that's accounted for the majority of the 438,000 U.S. jobs lost in the last six months, according to the U.S. Department of labor, as we wrote about in this piece published in Fresh & Easy Buzz earlier today.

The job losses in the overall retailing sector have been led primarily by home-centered stores, gift-oriented retailers, apparel sellers, and other more durable goods retailers that are suffering because in the current down U.S. economy consumers have dramatically contracted the amount of money they're spending on durable goods and non-essentials.

On the other hand, the food and grocery retailing segment has experienced very little if any job loss, especially at store level. Some large U.S. supermarket chains such as Bashas in Arizona and SuperValu, Inc., along with a few others, are laying off corporate headquarters employees as a way to reduce expenses.

Bashas recently laid off 100 workers at its Arizona corporate offices. SuperValu, Inc., the second-largest U.S. supermarket chain after Kroger Co., announced last week it's going to outsource most of its back office financial services work, which will result in the firing of numerous employees at its Minnesota-based corporate headquarters, as well as at regional offices throughout the U.S.

At store level though, very few if any workers are being let go for economic reasons by America's food and grocery chains, mass merchandisers like Wal-Mart and Target which sell groceries, or even by regional chains and independent grocers.

There are a few reasons this is the case.

First, compared to other format retailers, the food and grocery retailing industry is less hard hit by bad economic times like those present currently in the U.S. The old adage "people have to eat" is true; that's why its an old adage. However, while people do have to eat, they don't have to buy their food at "your" supermarket. Therefore, times are still difficult, mostly from a competitive standpoint, for America's food and grocery retailers. But they are nowhere near as difficult as they are for soft and hard goods retailers, especially gift and home centered retail companies.

Second, the vast majority of national and regional chain supermarkets in the U.S. are unionized. Retail company union contracts make it difficult for the chains to layoff store-level workers. Rather, most unionized supermarket chains and independents do two things in bad economic times: hire more part time workers who's hours, and thus labor costs, are variable, and reduce the weekly hours worked by their current part time employees.

Lastly, building a new supermarket takes time; easily two or more years from acquiring the land to getting the store up and running. Therefore, numerous U.S. supermarket chains and independent food retailers have new stores they decided to build two to three or more years ago, when the U.S. economy was running on multiple cylinders, coming on line at this point in time. As a result, we're actually seeing a spate of frequent new food and grocery (and mass merchandiser) store openings in this down economy, that is surprising to many observers who aren't intimate with the industry.

This is particularly true in the western region of the U.S., where Tesco has it current 62 small-format, combination basic grocery and fresh foods markets.

As we reported and wrote about in this June 25 piece, Tesco plans to hire about 750 new store-level employees in the next 90 days in Southern California, Nevada and Arizona. Since these three states have unemployment rates above the national average of 5.5%, these 750 new jobs will be welcomed with open arms, despite the fact they are part time jobs (about 20 -to- 30 hours a week) and pay $10 an hour.

A weekly wage of $250 before taxes (25 hours a week at Fresh & Easy) isn't going to replace the full time, relatively high wage jobs in construction, manufacturing and financial services that have been lost in the thousands in these three states by any means.

However, in this economy, the job can make a difference to a family struggling to make ends meet, along with offering retired people who can't make it on social security, pensions (if they are lucky enough to have one) and savings (if they have that) the ability to supplement their income and survive. It's also a fairly decent opportunity for mothers (or fathers) who need or want part time work and need to bring in a second income, along with college students working their way through school.

Tesco isn't the only retailer opening new retail food and grocery stores in California, Nevada and Arizona either in the down U.S. economy.

For example, just last week Whole Foods Market, Inc. opened a new natural foods supermarket in Reno, in northern Nevada. Whole Foods hired over 200 employees to staff the nearly 60,000 square foot natural foods emporium. The store is the natural foods grocery chain's first store in Reno.

Whole Foods also has plans to open new stores in Southern and Northern California between now and the end of this year, along with a new store in Las Vegas and another in Arizona.

Trader Joe's also has a couple new stores set to open this year in California; along with one in Arizona.

San Francisco Bay Area-based Safeway Stores, Inc., which operates stores under the Safeway banner in the Western U.S. states of California (Northern California only), Northern Nevada, Arizona, Colorado, Oregon and Washington, along with supermarkets under the Vons and Vons pavilions banners in Southern California, and Vons in Southern Nevada, is remodeling numerous supermarkets throughout the region, as well as opening new stores in all these states, including California, Nevada and Arizona.

Other food retailers opening new stores between now and the end of the year in the western region of the U.S include: Sprouts Farmers Market (1 or 2 new stores), Sunflower Farmers Market (2 or 3 new stores), Henry's Farmers Market, Wal-Mart, Inc. (Supercenters, Neighborhood Market supermarkets and its four new small-format Marketside community grocery stores in Arizona), SuperTarget, Raley's and a handful of others.

In comparison, most retailers in other segments are contracting; closing stores in many cases and putting new store building activity on hold in other cases. For example, coffee retailer Starbucks announced yesterday it plans on closing 600 of its cafes in the U.S., which will result in about 12,000 employees losing their jobs. A number of those Starbucks cafes are in the Western USA.

Of course, don't be surprised if we see a couple supermarket chains close existing stores as well. Many markets in states such as California and Arizona are already or near being over-stored--a phenomenon that always plays itself out more clearly in bad economic times--as evidenced by reports there are lots of underperforming food and grocery stores out there across many chains.

For example, Safeway Stores, Inc., which still has about 30% of its 1,750 U.S. supermarkets in to be converted to its Lifestyle format, is now taking a closer look at each store before it converts and remodels it.

Just two years ago, Safeway would convert even some underperforming stores to the Lifestyle format, taking a chance the extensive remodeling would result in better performance. However, in this down economy, the supermarket chain is rationalizing each store remaining to be converted much more closely, and is far more willing to close a underperforming store rather than convert it now than it was just a couple years ago.

Despite this potential for supermarket chains to begin closely more of their respective underperforming stores than has been the case in the last few years due to the tough economic times, the fact remains the industry is one of the few brighter economic lights in terms of new job creation and the related economic stimulus building and opening a new supermarket brings to a community, state and region.

Since food retailing also is the most price-competitive retailing sector in the U.S., as well as the best at containing operating expenses, its better prepared in the main for recessionary times than other format retailers generally are.

However, there is more price and value competition in the industry, especially in the Western U.S. markets, than at any time in recent history. Therefore, the strong food retailers are going to be the most likely to survive, and even thrive, while the less-strong have their work cut out for them.

Food Retailing and the U.S. Economy Report: 62,000 More Jobs Lost, Unemployment Rate Near 7% in CA; Oil Price Soars; Food Price Inflation Ongoing

On the eve of Independence Day (July 4) U.S. employers cut payrolls by 62,000 workers last month, for the sixth straight month of nationwide job cuts, showing the U.S. economy is far from out of its deep trench, according to statistics released this morning by the U.S. Department of Labor. The overall U.S. unemployment rate remained at 5.5%, up nearly a full percentage point in the last 12 -to- 14 months.

The Labor Department report released this morning also includes a snapshot analysis of the business conditions across the U.S. corporate and small business spectrum. the report says employers are being hit hard by soaring fuel and energy prices; and even worse are extremely uncertain about how long the current severe economic downturn will last because of the combination of so many negative economic indicators and conditions--the soaring cost of fuel and energy, the continuing credit crisis, the housing foreclosure mess, record-high food price inflation, record government debt, and decreasing consumer spending and confidence in the economy.

So far this year the U.S. economy has lost 438,000 jobs, for an average of 73,000 lost jobs a month over the last six months, from January -to- June, 2008, according to the U.S. Department of Labor.

The employment sectors where the most job losses have occurred are: construction, manufacturing, financial services and retailing.

Most economists are predicting continued job losses and a poor economy for the rest of 2008, despite the $168 billion dollar economic stimulus rebate program in which the U.S. government put checks ranging from $300 -to- $1,200 in the hands of every American who filed a tax return. Every U.S. taxpayer who filed a return should have received (and probably spent) their economic stimulus rebate, according to the U.S. government.

Some economists fear that when the stimulus force (consumer spending of the money) of the rebates ends, the economy will be in for another rough patch. Those analysts worry that the economy--which has been coping with sluggish growth at best--will have a "relapse" and lose momentum near the end of this year.

In fact, many of these economists are predicting a higher national U.S. unemployment starting early next year, with the unemployment rate rising to 6% or slightly more in the first quarter of 2009. Nearly all of these economists attribute this rise to employers being reluctant to increase hiring even if the economy starts to show signs of improving because of all the uncertainty they have due to the multiple negative economic conditions and indicators described earlier in this piece.

Add to that uncertainty the fact that inflation concerns are growing. With inflation concerns growing, the Federal Reserve last week ended an aggressive rate-cutting campaign, started last September to shore up economic growth.

Fed Chairman Ben Bernanke and his colleagues are caught between risky crosscurrents of plodding economic growth and soaring energy and food prices that threaten to spread inflation. Lowering rates further would worsen inflation. But boosting rates too soon to fend off inflation could hurt the fragile economy. Its a Catch 22 situation in most ways.

Meanwhile, Oil prices today neared $146 a barrel for the first time, while gasoline prices hovered above $4 a gallon.

Additionally, food price inflation continues in the U.S. According to statistics just released this week by the United States Farm Bureau trade organization in Washington D.C., food costs are up overall in the U.S. by 8% in just the last 12 months. Further, prices of key food staples like bread, milk, eggs, cereals and most meats are up by double digit percentages, in many cases in the 20 -to- 25% range, over last year.

The U.S. food and grocery industry has been doing a pretty good job of holding the line on food price increases, despite getting hit with a tsunami of factors, including soaring ingredient costs and fast-rising fuel and energy costs.

Manufacturers and suppliers have been cost-cutting where they can and trying to limit price increases to retailers. In turn, retailers have been taking some margin hits rather than reflecting the total percentages of the price increases they receive from suppliers, especially on key items like bread, milk and other staples.

Despite these cost-containment and margin hits by suppliers and retailers, food inflation remains high, which demonstrates how powerful of a negative factor it currently is in the U.S. economy.

On the retail side, sellers of household goods like Bed Bath & Beyond, Room Source, Cost Plus World Market, Pier 1 Imports and numerous others are doing poorly and in many cases on the verge of filing for bankruptcy.

Food and grocery retailing generally does well, and sometimes even thrives, during a down U.S. economy because consumers shift a greater percentage of the food spending they previously did at restaurants (generally about 40% of all food spending dollars in the U.S.) to supermarkets (what's called at home spending) and other retail food stores. In other words, they cut back significantly on eating out and redirect that spending to supermarkets.

However, with soaring food and grocery prices, we're starting to see a bit of a different pattern emerge. Lower income and middle income consumers are cutting back significantly on how much money they spend at the supermarket, as well as overall on food. This is due in large part to the soaring cost of gasoline, which averages over $4 a gallon currently nationally and is nearing $5 a gallon in states like California.

Speaking of California, the western U.S. where Tesco has its current 62 Fresh & Easy Neighborhood Market small-format combination discount grocery and fresh foods grocery markets, is doing worse economically than the nation as a whole.

For example, the unemployment rates in California, Nevada and Arizona--the three states where the Fresh & Easy stores are located--are over 6% respectively, which is significantly above the national average of 5.5%.

California's unemployment rate for example just hit 6.8%, and in some parts of the state like the Central/San Joaquin Valley counties of San Joaquin (11%), Stanislaus (11.7%) and Merced (12.3%) counties its near double that, according to figures released this month by the California Employment Development Department.

California, Nevada and Arizona also are three of the states hit hardest by the housing credit and foreclosure crisis, which is driving the higher unemployment numbers in these three states due in large part to the near complete collapse of the residential housing and mortgage industries.

In terms of food and grocery sales, Tesco's no frills, limited assortment and low-priced focused Fresh & Easy grocery stores should be positioned to thrive during this serious economic downturn in the three western U.S. states where it operates stores.

Fresh & Easy's pricing is low, its neighborhood grocery concept is one in which consumers can shop frequently for reasonably priced groceries without driving miles to a Wal-Mart Supercenter and spending lots of money on gasoline for example, and its fresh, prepared foods are priced low enough, and yet offer a decent enough level of quality, to serve as a substitute for restaurant meals for consumers, while saving them lots of money.

The jury is still out though as to consumer response to the Fresh & Easy offering, which as we said should be super-popular in these bad economic times in Southern California, Arizona and Nevada. The fact is, the stores aren't performing as they should or could in this economic climate, which with high food price inflation and soaring gasoline prices is an economy in many ways made for a no frills but yet somewhat fashionable upscale format like Fresh & Easy.

If Tesco can seize on better positioning, merchandising and marketing for Fresh & Easy, it has the potential to thrive in this down U.S. economy. Of course, since value is now the key in food and grocery retailing, every grocer from SuperValu, Inc., Kroger Co. and Safeway Stores, Inc., to regional supermarket chains and even Whole Foods Market, Inc., is embracing the value and lower prices mantra in various ways and adjusting their retail merchandising and marketing accordingly.

And, no food and grocery retailer is doing so more than the world's largest retailer, and the now number one national seller of food and groceries in America, Wal-Mart, Inc.

If you've talked with Wal-Mart suppliers and vendors like Fresh & Easy Buzz has over the last couple months, you'll know the first and last message given to supplier sales reps when they sit across the desk from a Wal-Mart buyer, is that part of doing business with the brawny big box retailer (and soon to be small box too with its new Marketside stores in Arizona) from Bentonville (Arkansas) in the current bad economic downturn in the U.S. is for that supplier, big or small, to suck up as much margin as it can--and then some--when it comes to giving increases to Wal-Mart.

Supplier price increases to Wal-Mart are currently being met with immediate buyer phone calls to that supplier's Wal-mart rep, the content of that buyer phone call being: the price increase is too high; you need to lower it or eliminate it. In large part, this is why Wal-Mart is thriving in the current economy, as its most recent sales and profit numbers demonstrate.

Lee Scott (Wal-Mart CEO) and company at Wal-Mart have decided to seize on the economic downturn in the U.S. to not only firmly establish the retailer as America's premier discount or value retailer, but to use its huge buying clout to steal market share in the food and grocery categories away, for what it hopes is the long term, from other grocery chains. Thus far it seems to be working.

Of course, a considerable percentage of U.S. consumers just plain hate Wal-Mart. However, it appears many of these consumers are being persuaded to take a second look at the retailer in this down economy.

Meanwhile, Tesco has the potential to become the anti-Wal-Mart in Southern California, Nevada and Arizona with Fresh & Easy--a small box rather than a big box, conveniently located rather than miles away from where people live, low-priced yet not overwhelming--despite having its own segment of anti-Tesco consumers back home in the UK, where as that nation's dominant retailer it serves as the evil "Wal-Mart of the UK" for its own respective consumer segment.

In terms of achieving that, the jury is still out for Tesco's Fresh & Easy. However, the time to begin doing so for the British-based retailer come to America is in the current recessionary or near recessionary U.S. economy.

Tesco's Fresh & Easy Neighborhood Market: What Others Area Saying; Wednesday, July 2, 2008

Fresh & Easy Manhattan Beach, Southern California, Store Grand Opening

Today's Los Angeles Times on the Manhattan Beach store grand opening: "Fresh & Easy sets up shop a few paces from rival Trader Joe's."

Southern California's South Bay Biz Waves Blog on today's Manhattan Beach Fresh & Easy grand opening event: Fresh & Easy Store Opens in MB

Fresh & Easy Neighborhood Market Fan Blogger Oakmonster on her day at the Fresh & Easy Manhattan Beach grand opening.

TV Tim Mason

CNBC Cable Channel 'Funny Business' host Jane Wells' July 1, 2008 video interview with Tesco Fresh & Easy Neighborhood Market CEO Tim Mason. View the video and read what Ms. Wells has to say here.

Fresh & Easy Arizona Market

The Arizona Republic: First new Arizona Fresh & Easy grocery market to open after the three month new store opening break will open in central Phoenix on July 30. Read about it here.

Competitor Notes

Nevada Appeal: Trader Joe's uses farmers' market in Carson City, Nevada (northern Nevada) as a promotional outlet opportunity.

True Crime blogger, Trials and Tribulations blog, tells about the experience of standing next to former Hollywood actor Robert Blake, who was acquited of murdering his wife after a long trial last year, for a prolonged period of time at a Southern California Trader Joe's. Read the story, "Dinner Shopping Beside Robert Blake," here. It's worth a look.

UFCW Union Pickets Out in Force This Morning At Manhattan Beach Fresh & Easy Store Grand Opening

In this piece on Monday, June 30, "Breaking News: UFCW Union Launches Preemptive Anti-Tesco Fresh & Easy Brochure Distribution Drop on the Eve of Manhattan Beach Store Grand Opening," Fresh & Easy Buzz reported the UFCW union had launched a preemptive anti-Tesco Fresh & Easy Neighborhood Market brochure distribution blitz in the neighborhood where the new Manhattan Beach Tesco Fresh & Easy grocery store in Southern California opened this morning, on the eve of the store's grand opening celebration.

In the story, we also reported the UFCW union would have representatives and pickets out in force this morning at the grand opening of the store at 1700 Rosecrans in Manhattan Beach, which was attended by Fresh & Easy Neighborhood Market CEO Tim Mason and nearly every senior executive of the company, along with the mayor of Manhattan Beach (who helped Mr. Mason cut the grand opening ribbon), and numerous other dignitaries.

Well, the UFCW representatives we out in force early this morning, and remained in front of the store until the grand opening festivities ended; staying even a bit later after that in fact.

As you can see in the photograph at the top, the UFCW union folks picketing in front of the store this morning are carrying large green signs which read: "Don't be Fooled by Tesco's Fresh & Easy, which is the same headline used on the brochures. Below that is the listing for the unions Fresh and Easy Facts campaign website, which also appears on the brochures. [Note to the UFCW graphics department: white lettering on that particular color green background doesn't have the best visibility.] [Readers Note: If you click on the photograph at top to enlarge it, you can read the letters on the signs much better.]

[Photo Credit: Lindsay William-Ross/LAist blog.]

You can view a slideshow from today's Fresh & Easy Manhattan Beach store grand opening here, along with reporting on the event by the LAist blog. You also can read this piece published earlier today in Fresh & Easy Buzz about the Fresh & Easy store grand opening this morning.

Tesco's to Open A Fresh & Easy Grocery Market in Low Income, Underserved South Central Los Angeles Neighborhood

Above: Inside Fresh & Easy Neighborhood Market. [Click here to view photographs, including one showing its proximity to the Trader Joe's store, of the Fresh & Easy grocery market at 1700 Rosecrans in Manhattan Beach which opened this morning.]

Tesco plans to open one of its small-format, combination basic grocery and fresh foods Fresh & Easy Neighborhood Market grocery stores in a "food desert" neighborhood (or neighborhood underserved by grocery stores that offer fresh food and basic grocery products at reasonable prices), at Central & Adams Streets in low-income South Central Los Angeles, Tesco Fresh & Easy Neighborhood Market CEO Tim Mason said this morning at the grand opening of the retailer's new and 62nd store at 1700 Rosecrans in Manhattan Beach, (Southern) California.

Thus far, three of Tesco's 62 Fresh & Easy grocery markets are in such "food desert neighborhoods: one in South Central Los Angeles County's Compton and the other in Los Angeles' Eagle Rock neighborhood, which although has been historically underserved by supermarkets, is currently going through a gentrification process which likely will bring grocery stores from one or more competitors to the neighborhood in the not too distant future.

As part of its publicity campaign prior to opening its first Fresh & Easy stores in November, 2007, Tesco frequently stated in press releases a significant part of its Fresh & Easy Neighborhood Market strategy in the Western USA was to open a number of the small-format grocery stores in "food desert" neighborhoods, which because of their primarily inner city locations and lower-income residential populations, are underserved by supermarkets.

The U.S. division of the United Kingdom-based retailer has been heavily criticized by Los Angeles based community, faith and labor organizations for not locating more than the two of its current 62 Fresh & Easy food stores in "food desert" neighborhoods thus far.

A coalition of community, faith and labor groups in Los Angeles, called the Alliance for Healthy and Responsible Grocery Stores, has been conducting a grass roots and media campaign designed to get Tesco to locate a higher percentage of its Fresh & Easy stores, especially in the Los Angeles Metropolitan region, in these neighborhoods, which have been historically and in the main are currently underserved by food stores offering fresh foods and groceries at reasonable prices.

At the Manhattan Beach store grand opening this morning, Mr. Mason said the announcement of the new South Central Los Angeles Fresh & Easy at Central & Adams Streets "demonstrates Fresh & Easy's commitment to open stores in all types of neighborhoods, including those that have been traditionally underserved."

"We believe everyone deserves fresh, high quality food at affordable prices regardless of where they live, and we are proud to bring Fresh & Easy to South L.A.," Mr. Mason said this morning.

Tesco's Fresh & Easy is planning a groundbreaking ceremony at the Central & Adams site in South central Los Angeles later this month, Mason said.

The retailer held a similar groundbreaking ceremony some time ago in San Francisco, where Tesco next year plans to open a Fresh & Easy grocery store as the retail anchor of a new mixed-use but primarily residential condominium development in the city's low-income Bayview- Hunters Point Neighborhood.

The San Francisco groundbreaking ceremony held at the site included the city's mayor, Fresh & Easy executives, members of various neighborhood groups, and San Francisco officials who've been working for many years to bring a new supermarket to the neighborhood. Tesco was the first food retailer to agree to locate a store in the neighborhood after years of asking various chains and independents to do so by city officials and neighborhood groups.

The heavily populated Bayview-Hunters Point neighborhood currently has only one full service supermarket in it, a Foods Co discount warehouse format store owned by Kroger Co.

Tesco also has committed to opening a Fresh & Easy store in Sacramento's Oak Park neighborhood, which also is underserved by supermarkets. That store also is set to open next year when Tesco begins entering Northern California for the first time with its Fresh & Easy grocery markets.

The Los Angeles-based Alliance for Healthy and Responsible Grocery Stores argues Tesco isn't living up to its commitment to open more or enough stores in "food desert" neighborhoods because thus far it's only opened two (the Compton and Los Angeles stores mentioned earlier) out of its current 62 Fresh & Easy stores in such neighborhoods.

The group has conducted studies using Southern California-based university researchers, which it says have detailed numerous neighborhoods in and around Los Angeles which it says qualify as "food deserts," and where it believes a grocery store like Tesco's Fresh & Easy would do well.

The alliance has sent that information to Tesco Fresh & Easy USA executives it says but has complained CEO Mason hasn't met with members of the group to discuss the issue.

Meanwhile, Tesco's Fresh & Easy is just about the only grocery chain with stores that offer a selection of both fresh foods and groceries at affordable prices that's currently locating stores, albeit just two so far with a third coming, in these "food desert" neighborhoods.

Southern California market share leaders Ralphs (owned by Kroger Co., the number one supermarket chain in the U.S.) and Vons (owned by number three in the U.S. Safeway Stores, Inc.) haven't shown a desire to open stores in these neighborhoods in and around Los Angeles for years.

Ralph's did open a brand new Ralphs Fresh Market, it's new, more upscale format, in downtown Los Angeles though late last year as part of a massive residential loft development that's been built in an area of downtown that's rapidly gentrifying and drawing high-income young professionals who want to live in the heart of the city. An arts district is developing in the downtown neighborhood, along with numerous new restaurants, clubs and retail stores having opened in the last couple years.

This morning's grand opening celebration at the new Fresh & Easy grocery store in Manhattan Beach, which we were the first to report is located just a few short steps from a Trader Joe's grocery market, featured a ribbon cutting by CEO Tim Mason and the city's mayor, Richard Montgomery. Joining Mr. Mason and the Manhattan Beach Mayor was another mayor, Kelly McDowell, who is the municipal chief in nearby El Segundo, where Fresh & Easy Neighborhood Market has its corporate headquarters. The new Manhattan Beach Fresh & Easy store is less than a mile away from the corporate office in El Segundo.

During this morning's grand opening event, Fresh & Easy presented a check for $1,000 to the local Wiseburn Educational Foundation. The foundation raises funds used to help support programs in the local school district. Each time it opens a new store, Fresh & Easy donates $1,000 to a local charity or non-profit organization, which is chosen by the store's employees from requests submitted by the groups.

A week from today, Tesco will open its 63rd Fresh & Easy grocery store in north Las Vegas, Nevada. As we reported on June 25, Tesco's Fresh & Easy Neighborhood Market USA plans to open at least 30 new stores in Southern California, Arizona and Nevada in the next 90 days. The retailer says it will hire about 750 new employees during this 90-day new store opening spree.

Tuesday (Fresh & Easy) Tidbits: New Store Opening Gala; A Real Estate Transaction of Note; Cheap, Good Eats; Reno 411...Tesco, Hugh and the Chickens

Tesco's Fresh & Easy Neighborhood Market

Manhattan Beach new store grand opening tomorrow: Tesco's Fresh & Easy Neighborhood Market will open its first new store tomorrow (Wednesday, July 2) morning in a shopping center in Manhattan Beach (Southern) California since declaring a three month new store opening pause in April. The store's address is 1700 Rosecrans, Manhattan Beach, California.

There will be a grand opening celebration and ribbon cutting at the Manhattan Beach store tomorrow morning from 8am -to 10am, with various events planned during those two hours.

The Fresh & Easy is located almost next door to a Trader Joe's grocery market in the shopping center. The Trader Joe's market is at 1800 Rosecrans. The F&E and TJ's even share the same parking lot.

Read our June 6 story and photo essay, "Manhattan Beach First Look: Fresh & Easy Buzz Has First Photos of First New Fresh & Easy Grocery Store Set to Open After the Three Month Pause."

Read this piece from yesterday, "Breaking News: UFCW Union Launches Preemptive Anti-Tesco Fresh & Easy Brochure Distribution Drop on the Eve of Manhattan Beach Store Grand Opening," about the UFCW union campaign targeting the Manhattan Beach Fresh & Easy grocery market opening tomorrow morning.

Fresh & Easy Real Estate: From the Costar Commercial Real Estate Group: Turner Island Farms purchased the Fresh & Easy grocery store in Norwalk, (Southern) California from a private investor called Amsted Residuals LLC for $4.75 million, or about $339 per square foot. The sale included the land, in a leased fee interest.

The 14,015-square-foot building at 10930 Rosecrans Ave. is in the Mid-Cities submarket. The tenant, (Tesco's) Fresh & Easy Neighborhood Market, has an absolute triple-net 20-year lease and generates a cash flow of $285,000. This is the second Fresh & Easy store sold in Southern California.

The sale was the buyer's upleg in a 1031 exchange. There were 8 offers submitted on the property. Shaun Riley of Faris Lee Investments represented the seller. Jeffrey Douglas of Colliers Tingey International, Inc. represented the buyer.

More San Diego Fresh & Easy markets on the way: Tesco will open at least two more new Fresh & Easy grocery markets in the San Diego County region in far Southern California in the next few months, Fresh & Easy Buzz has learned from a commercial real estate source in the market.

These two new Fresh & Easy grocery stores will be in the San Diego County cities of Point Loma and in Mira Mesa. Tesco already has one store in Point Loma.

There currently are six small-format (10,000 -to- 13,000 square feet) Fresh & Easy Neighborhood Market combination basic grocery and fresh foods stores in San Diego County. The two new, additional units will bring the store count in the County to eight.

Fresh & Easy offering A 4th of July cookout for the frugal: Tesco's Fresh & Easy Neighborhood Market is promoting a special mixed meat grill pack and a 12-pack of beer for ten bucks for the upcoming July 4th Independence Day holiday.

Fresh & Easy's mixed grill pack includes a mixture of eight hand-trimmed and lightly chili-seasoned chicken thighs and drumsticks, four freshly ground mild Italian pork sausages and four quarter-pound, 80 percent lean beef patties.

The 4th of July special runs from July 1 -to- July 8th

Also included in the cookout promotion is a 12-pack of Taurino Cerveza, Fresh & Easy's specially selected Latin-style beer. The Latin-style beer is traditionally brewed and is a Monde Section award-winner. [Raise your hand if you know what a Monde Section award-winner is Independence Day celebrants? Monde sounds French to Fresh & Easy Buzz. Good angle though actually: After all, were it not for the French, America may not have defeated the Brits in the war of independence, which we celebrate on July 4.]

Five pounds of combined chicken parts, beef and pork sausage patties, along with a 12-pack of quality beer, is a hot deal though, no matter how you slice it.

For example, $5.99 would be a firecracker-hot buy for a 12-pack of similar quality branded beer at any supermarket or beverage store. And, of course, there's the tax on that 12-pack, which adds about 50-cents or so, depending on the state and city. This means shoppers are getting the five pounds of chicken parts, hamburger and sausage patties for under $1 dollar a pound. As Paris Hilton says: "That's hot." Of course, non-beer drinkers are a bit out of luck.

If we created the mixed grill meat pack and beer promotion, we likely would have changed a couple things. Instead of including the sausage patties, we would have just gone with the chicken parts and hamburger patties, since sausage patties aren't one of America's top grilling choices for the 4th of July, or for summer grilling in general for that matter. However, at that price, perhaps Americans will bite the bullet and grill the pork anyway for their holiday backyard celebrations.

Additionally, we probably would have offered a good old American beer rather than a Latin or Hispanic-style beer, since it is American Independence Day after all.

However, since America took a good chunk of the Western USA, the states where Fresh & Easy does business, from Mexico, it is somewhat fitting in a geopolitical way to offer a Latin-style beer as part of the promotional package. Plus, Latino's or Hispanics are the largest ethnic population group in California, Arizona and Nevada, so there's a logic to the offer from that angle as well.

And yes, we get the chili seasoned chicken parts and Latin-style beer tie-in. But perhaps that would be better for Mexican Independence Day, celebrated by Latino's in the U.S. in September. But, the America as a melting pot scenario should go both ways...so why not a bit of Latin accent--and flavor--for the 4th of July.

Either way, it's a good value...and you can always take the sausage patties out, grill the chicken and hamburger patties on July 4th, drink all the beer too, and then prepare the sausage with some eggs and toast for your July 5th breakfast. That's even stretching the ten buck value over two meals.

Reno 411: Upcoming Reno Fresh & Easy: Grocery store or Sandwich shop?

Fresh & Easy Buzz reported in this May 22 piece that Tesco plans to open its first Northern Nevada Fresh & Easy grocery store in Reno, Nevada. The store, in a new mixed used commercial/residential development named North McCarran Crossing at Northtowne Lane & McCarran Blvd. in Reno, will likely open early next year.

Not everybody in Reno is clear on the Fresh & Easy as a grocery store concept though. Among the confused include the construction project manager of the firm that's building the Fresh & Easy grocery store, along with the writer (and editors) of the Carson City, Nevada Carson Times newspaper. Carson City is next door to Reno.

As you can see in the two paragraphs highlighted in bold in the June 19 Carson Times which is reprinted below, the construction company project manager and the reporter describe the Fresh & Easy grocery store as a 14,000 square foot sandwich shop. Imagine how many sandwiches a day one would have to sell to make the sales per square foot numbers for 14,000 square foot sandwich shop?

Reno 411: Perhaps Tesco's Fresh & Easy Neighborhood Market needs to make a couple calls: One to the construction company manager who's heading up the building crew (after all they don't want to find a sandwich shop instead of a grocery store next time they check the site out); and a call to the reporter (and editor) for the Carson Times. Although, since Fresh & Easy stores devote a good deal of store square footage to fresh, prepared foods, including ready-to-eat sandwiches, we don't fault either the construction firm project head or the reporter all that much. It happens to the best of us.

Carson Times, Carson City, Nevada - Jun 19, 2008

Northtowne work causes woes

BY VICTOR CALDERONvcalderon@rgj.com

A detour outside a shopping center on Reno's Northtowne Lane is causing headaches for motorists, business owners and shoppers said Wednesday.

The detour is caused by road work and construction on a commercial project across from the center, which is anchored by Wal-Mart and WinCo Foods and includes smaller businesses.

For the past month, the detour on Northtowne has closed an entrance to the center near the intersection with North McCarran Boulevard, leaving one entrance and exit for cars at Lund Lane.

Signs slow traffic to 15 mph on the street around the project, which has closed sidewalks and blocks a covered bus stop. Shoppers outside WinCo say they have no other choice but to deal with the detour.

"We put up with it," said Clark Leedy, as he loaded groceries into his vehicle on Wednesday with his wife, Pat. The couple drives down from Mogul every week to shop at WinCo.

"What a pain," Pat Leedy said.

The project under construction is a retail/residential center with a business called Fresh and Easy, according to a public notice hanging on a fence at Northtowne and Lund. Plans call for a 14,000-square-foot commercial building on a 6-acre site, with more space available for lease.

The applicant is North McCarran Crossing, LLC. The project also includes 118 planned housing
units, according to a Web site for commercial real estate firm NAI Alliance.

Lucas Olive, a project manager with United Construction, described Fresh and Easy as a sandwich shop. The detour is scheduled to be removed by early July, Olive said.

In the meantime, business is down at shops such as Dollar or Plus, said store owner Mohammed Muhaimin.

"We are hurting right now," Muhaimin said. "People are saying it's hard to come in, and I've seen cars almost getting into accidents."

Alma Stankevicne of Sun Valley said she too will deal with the inconvenience in order to shop for groceries.

"There's nothing you can do if you have to come shop here," Stankevicne said.

Note: The Reno Fresh & Easy grocery market in the center will be directly across the street from a Wal-Mart Supercenter and a WinCo Foods supermarket. WinCo, an employee-owned supermarket chain, operates large, deep-discount yet very fresh foods-oriented supermarkets.

This is going to be a very price competitive corner of Reno once the Fresh & Easy store opens, since all three retailers--Wal-Mart, WinCo and Tesco's Fresh & Easy--position their respective chains as being low-price leaders.

Speaking of Wal-Mart: In addition to looking to open one of its new small-format Marketside combination grocery and fresh, in-store prepared foods community grocery stores in Reno, as we wrote about here on June 6, the mega-retailer also has created a new Supercenter store design prototype. The design has earth-tone colors instead of the traditional grey and blue, has some curves and lines to it rather than the traditional square big box edges, and looks far more upscale then the current basic Supercenter design.

Additionally, the new Supercenter design prototype incorporates what will become Wal-Mart's new corporate logo this fall. The food and grocery industry publication Natural~Specialty Foods Memo has a story, along with an artist's rendering of the new Supercenter design, as well as a picture of the new Wal-Mart logo, in this recent June 27 piece.

Page Ender: A Word or Two About Tesco, Hugh and the Chickens:

It seemed--as one of our UK-born and raised regular readers who now lives and works among the elected officials (who often exhibit chicken-like behavior) in Washington D.C. reminded us in an email today--ironic more people were talking about chicken rights than human rights at Tesco's Annual General Meeting (AGM) last Friday, June 27.

As you may recall, British celebrity chef and animal rights activist Hugh Fearnley-Whittingstall placed a shareholder resolution, which he paid for from supporter donations along with his own money, on the AGM agenda Friday, which if it had passed would have required Tesco to sell fewer broiler chickens raised in small or battery cages and more free-range-raised birds. Fearnley-Whittingstall's resolution failed by a 90% against, to 10% for. Very few big, institutional shareholders attend the AGM's these days, which means the 90% against vote was cast primarily by mid-range and smaller Tesco shareholders.

We strongly support larger cages for both broiler chickens and egg-laying hens. The battery cages currently used in nearly all cases in the U.S. and to a lessor but still majority extent in the UK are just to damn small for the birds. The chickens can't move in the cages at all.

We also support free-range chicken farmers and the retailers who sell the birds We buy free-range as often as is economically feasible, especially when we find a retailer who realizes it doesn't need to mark the birds up an additional 10% or more margin points just because the birds are free-range. Yes, we all know retailers like to take higher margins on free-range chickens.

However, at the risk of offending some readers, were we a Tesco shareholder, which we are not, we would have voted against Mr. Fearnley-Whittingstall's chicken welfare Tesco-specific resolution for a few reasons.

First, we don't believe in retailer-specific restrictions. Although if the majority of shareholders would have voted for the resolution, we would support it. We do believe in majority consensus by democratic vote.

However, in terms of changing industry behavior, it does no good in our view to have only one food retailer--even if it's the largest one in a nation--have competitive restrictions on it that allows it's competitors an advantage. We particularly believe this to be the case when it comes to ethical issues like chicken welfare and similar issues.

Now, were Tesco to announce that say beginning in 2010, it would only procure and sell broiler chickens raised in larger cages (which is a trend among UK chicken farmers by the way) and free-range birds, and do so for a competitive advantage, that would be interesting. It also would cause many UK farmers to rapidly get rid of their small cages and use the larger, more roomer ones.

[Note: Tesco and all the top UK supermarket chains have agreed to only sell eggs from hens raised in the larger cages beginning in 2012.]

Second, is the issue of price. We love free-range chickens and love the farmers who raise them that way. However, the fact is both in the U.S. and the UK, free-range birds are just to darn expensive for middle and lower income consumers to buy and eat on a regular basis. They even can be a bit too high priced for upper income folks to buy regularly in many cases.

In the UK, Tesco is famous for being the first food retailer to offer the $1.99-British pound "cheap chicken," which if you do the conversion to dollars wouldn't be considered a cheap chicken in America. But then we complain about $4 a gallon gas, while most Brits alive today can't even remember when gasoline was that price, since a gallon of the precious fossil fuel currently sells for nearly three times the U.S. price at the pump in the UK.

Last week in the U.S., Safeway Stores was promoting a brand (a California grown chicken) for 69-cents a pound. The birds are all natural, nothing added, and are raised in small cages like nearly every chicken in the U.S. is raised, except for free-range, which makes up about 1% of all chickens sold in America.

As we stated, we support chicken producers moving to the use of larger cages. We've told many of them we know so.

However, we can't tell you how pleased the 200 low-income families we were a part of buying 200 of these 69-cent per-pound chickens for were when a group of us presented the birds (five pounders) through the local foodbank--along with all the other fixings for a family of up to five: fresh corn on the cob, salad greens and salad dressing, potatoes, beans, milk and other beverages, charcoal briquets, a mini bbq grill, a gourmet apple pie, and cookies for the kids--for their surprise Father's Day gourmet cookout meal about a week ago.

We believe an industry-wide move in both the U.S. and UK to larger cages, and the elimination of the battery cages, could be done without adding much to the per-pound cost of chickens. The key is industry-wide. California will have ballot initiative on the November, 2008 statewide ballot that would create a law to do just that--eliminate the use of small, battery cages by 2015. We support the measure.

Regarding free-range, the birds taste better and we like allowing the chickens to roam free. However, the price has to come down.

When shoppers go into a supermarket they don't look at the cheaper chickens and think to themselves: 'Lovely, I think I will buy one of those ~1.99-p per-pound Tesco chickens (or 69-cent per-pound Safeway birds on sale) raised in the tiny cages. Rather, most consumers say to themselves: 'I can buy a ~1.99-p per-pound Tesco chicken, some fresh vegetables, potatoes and a few other things, provide my family with a nutritious and tasty dinner, and still hopefully have enough money left over for gasoline, the kids dental appointments, some new school clothes, and the like. We didn't even mention the health insurance premiums, houshold utilities and other regular bills.

In other words, policy changes need to be industrywide, not piecemeal. We also suggest those advocating free-range-only birds start talking more about making the cost of such birds more reasonable. Yes, increases in consumer demand (increased sales) will help. However, in the UK, the Waitrose and Sainsbury's supermarket chains recently reported free-range broiler chicken sales were nearing the 50% - 50% mark vis-a-vis conventional birds. (That was before the food inflation spike started hitting the UK severly though.) However, despite the huge sales growth in free-range chicken sales in the UK, the per-pound price of the birds hasn't come down in any appreciable way.

Lastly, the timing of Mr. Fearnly-Whittingstall's shareholder resolution couldn't have been worse. The UK like the U.S. is in the midst of bad economic times, including a very bad period of soaring food inflation. Human rights--preventing people, including hard working people, from going hungry is the more appropriate focus riight now rather than chicken welfare (which is important) in our analysis and opinion.

In fact, Tesco should give a couple hundred thousand British pounds (money not weight) worth of it's ~1.99-p per-pound chickens to UK food banks this week, as a way of showing it appreciates its shareholders voting down Hugh Fearnly-Whittingstall's chicken welfare resolution. That would be walking the walk, as well as talking the talk. Even more important, it would help feed numerous British consumers having problems making ends meet, just like their American brothers and sisters are experiencing.

Make no mistake about it, we respect Hugh Fearnley-Whittingstall for having the courage of his convictions and proposing the resolution. The publicity he's garnered will go a long way to elevating the chicken welfare issue, as it should. The chef also is a great cause marketer, which we appreciate.

For us, we want to see the chicken and egg production industries on both sides of the pond--and elsewhere in the world--get the chickens out of the tiny battery cages and into larger cages where the birds can move around in.

Imagine living in your bathroom full time as an analogy. Even if its a tiny bathroom, at least you could lay down on the floor and stretch a bit. The chickens can't. Nor can they exhibit any natural behaviors in the battery cages. That's wrong; and the industry needs to move to the larger cages even if it takes legislation to get them to do so.

As for free-range, it needs work; although we see it growing and encourage it with our wallets at the supermarket when we can. We would like to see folks like Hugh Fearnley-Whittingstall and others also spend some time working on the economic issue of free-range birds--finding ways to bring the price down, as part of their advocacy. Fresh & Easy Buzz will give them as much ink as we can on the issue.

Of course, there's also the pure form of animal welfare, which isn't eating living creatures at all. That, like most everything else, should be a personal choice.

In these times, liberty isn't something we should allow to deminish any more than we already have, after all. That's something important to think about--for both Americans and British--just three days before here in the U.S. we celebrate a holiday--Independence Day--which rather than casting the UK and America farther apart, as it would most nations, has actually brought us closer together in a special relationship.

Think about that as you grill your chicken--free-range, organic, or conventional--on Friday, July 4 , in the U.S., and on any day this week you do the same if living in the UK.