And Then There Were Five: Smart & Final Completes its Mission of Opening Five SmartCo Foods Stores in Metro Denver Before Summer Ends

Southern California-based food and grocery retailing company Smart & Final has completed its mission of opening the first five of its new-format SmartCo Foods stores in Metropolitan Denver, Colorado before the end of summer - with time to spare.

On August 4 Smart & Final held the grand opening of its fifth SmartCo Foods store, a 42,000 square-foot grocery market in the Denver suburb of Littleton. The store is located at 3615 West Bowles Avenue.

The SmartCo Foods stores are price/value-focused hybrid grocery markets that are part traditional supermarket, part warehouse club format and part farmers market.

The stores' hybrid nature borrows from Smart & Final's other formats: SmartCo Foods' gets its warehouse style from the retailer's Smart & Final non-membership warehouse format stores, its farmers market genes from the company's Henry's Farmers Market chain, and it traditional supermarket focus from a combination of Smart & Final's Extra format stores and supermarkets in general.

The Littleton, Colorado store - number five - is managed by a veteran of the grocery retailing business and Colorado market region, David Crookston, who has 17 years of experience in the industry, including positions at Sunflower Farmers Market, Wild Oats and Reay’s Ranch Markets.

Each of the five SmartCo Foods stores are staffed by about 100-115 employees, according to the grocer. Smart & Final has established a standalone SmartCo Foods division in Metro Denver, which is headed by Scott Drew, SmartCo Foods' vice president and general manager. Drew says the company has hired about 600 employees to staff the five stores so far.

As we've reported previously, Smart & Final says it plans to open 20-25 SmartCo Foods stores in Metropolitan Denver, Colorado over the next few years. The first five stores range in size from 61,000 square-feet to 41,000 square-feet.

California and Arizona next up for SmartCo Foods

According to Smart & Final president Dave Hirtz, the retailer also plans to open SmartCo Foods stores in California and Arizona before the end of this year. Hirtz made that statement in late June when the first Metro Denver SmartCo Foods store opened. The retailer has opened the first five SmartCo stores in just slightly over a one month period of time. Smart & Final, which also owns and operates the Henry's Farmers Market chain, plans to open its first Henry's store in Northern California this week.

Since opening the first SmartCo Foods unit in Metro Denver in late June, Smart & Final has been offering a variety of hot specials in its weekly advertising circular, injecting some serious price competition into the portion of the Metro Denver market where the five stores are located.

For example, the current ad features whole chickens for 59 cents per pound, fresh peaches for 49 cents a pound, 20 packs (12 ounce cans) of Coca Cola for $4.99, and boneless New York Steaks for $3.98 a pound, along with various other items. (You can view the ad here.)

If Smart & Final maintains that level of price promotion in its ads, and brings the same promotional pricing structure to the SmartCo Foods stores it opens in California and Arizona, along with the favorable everyday prices it's been offering in the stores thus far, the grocer could add a significant level of competition to the markets where it opens the hybrid format stores. Based on our current source information, it's our estimation Smart & Final will open SmartCo format stores in both Southern and Northern California (although not in both regions for sure this year) and in the Phoenix Metro region in Arizona. Smart & Final might name the stores something other than SmartCo Foods though.

Southern California and Metro Phoenix are the two key regions for Tesco with its Fresh & Easy Neighborhood Market stores. Of Fresh & Easy's current 159 stores, 98 are in Southern California (and the southern Central Valley; Bakersfield and Fresno) and 34 units are in Metro Phoenix, Arizona. The remaining 24 Fresh & Easy stores are in Metropolitan Las Vegas, Nevada.

As it struggles to break even - Tesco's Fresh & Easy has lost over half a billion dollars since Tesco opened the first stores in November 2007, and is projecting a loss of about $253 million for its fiscal year 2010/11, which ends in February 2011 - the last thing Tesco's Fresh & Easy Neighborhood Market needs in Southern California and Metro Phoenix is another competitor, particularly one with a value-based pricing structure. However, the fresh food and grocery chain will be getting one, in the form of Smart & Final's SmartCo Foods format.

And speaking of price/value-based food retailers, Idaho-based WinCo Foods, which already has stores throughout California and is opening new units fairly rapidly in the Golden State [December 29, 2008: Competitor News: Winco Foods to Expand in California and Nevada in 2009; Put Aggressive Focus on Central Valley, Northern California and Northern Nevada], is also headed to Arizona - Metropolitan Phoenix to be exact - as we've previously reported and written about. [See - May 3, 2010: Winco Foods is 'Moving Fast-Forward' With Metro Phoenix, Arizona Market Entry and April 27, 2010: WinCo Foods' Entry Will Put the 'Ultra' in the Already 'Hyper-Competitive' Metro Phoenix, Arizona Market]

WinCo, a fierce competitor, will add yet another competitive layer in Arizona for Tesco's Fresh & Easy Neighborhood Market when it starts opening its first stores in Metro Phoenix, which will probably be in early 2011.

And in Southern California, where WinCo Foods has plans to open numerous stores, along with a new 1 million-plus square-foot distribution center to serve those new stores, the competitive heat will continue to intensify, not just for Fresh & Easy, but for all grocers in the region, particularly those with a price/value focus.

But additional competition in Southern California and Arizona vis-a-vis Fresh & Easy Neighborhood Market is key because at this point in time we can't see anything Tesco is doing from operations, merchandising and marketing perspectives at Fresh & Easy that will reduce the $250 million-plus annual losses it's sustaining with the chain. As such, we expect Tesco will likely in February 2011 project another loss for fiscal year 2011/12 (which starts at the end of February 2011) in the $250 -to- $259 million range for Fresh & Easy, similar to what it lost in the 2008 and 2009 fiscal years and is projecting for the current fiscal year.

[Below are links to our coverage of Smart & Final's opening of its first five SmartCo Foods stores in Metro Denver, Colorado. The stories also include numerous photographs of the stores.]

July 29, 2010: Smart & Final Opens Four SmartCo Foods Stores in Metro Denver Since June 23; Store Five to Open August 4

July 14, 2010: Smart & Final Opens Second SmartCo Foods Store Today in Metro Denver, Colorado

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 29, 2010: A Pictorial Look Inside Smart & Final's First SmartCo Foods Store in Denver, Colorado

Supporters of California's First-in-the-Nation Single-Use Plastic Bag Ban Going Humorous to Win on the Eve of State Senate Vote

Bagging Single-Use Plastic Bags in the 'Nation State' of California: News/Analysis/Commentary

We last reported on and wrote about AB 1998, the California legislation that if passed would ban single-use plastic carrier bags from being used in the Golden State's grocery stores, retail stores over 10,000 square-feet that have pharmacies, and eventually convenience stores (in 2013), in this July 20, 2010 piece: California's First-in-the-Nation Plastic Carrier Bag Ban Legislation Looks to Be On its Way to Victory.

In addition to banning single-use plastic carrier bags, the legislation requires grocers and the other retailers to sell paper grocery sacks for a minimum of five cents each, which is designed to encourage reusable bag use by shoppers. California law already requires grocers to offer reusable shopping bags for sale in-store. AB 1098 maintains that requirement.

Since our July 20 story, the bill, which passed the California State Assembly and was then sent to the State Senate, has passed in the final key Senate Committee - Appropriations - and is awaiting a floor vote by the full California State Senate. That vote will take place before the end of August, according to our sources.

Passage in the California State Senate is the last leg of the legislative journey for AB 1098. And California Governor Arnold Schwarzenegger has said he will sign the bill if it's passed by the Senate.

At present, political odds-makers in Sacramento tell us the bill currently has majority support for passage in the State Senate.

However, supporters of the single-use plastic carrier bag ban in California, which would be the first state in the nation to enact such a law, aren't letting that majority support for the bill stop them from launching an all out campaign to win on the eve of the floor vote by the Golden State's majority Democratic State Senate.

In fact, some of the last minute pro-AB 1098 campaigning is down right humorous - but by design.

For example, one of the single-use plastic carrier bag ban legislation's supporters, the environmental watchdog organization Heal the Bay, today released a short film it calls a "mockumentary," designed to promote passage of AB 1998. The short film, which is narrated by Academy-Award winning actor Jeremy Irons, charts the "lifecycle" of a plastic bag to promote awareness of plastic pollution in California and beyond, according to the environmental group.

The "mockumentary," titled "The Majestic Plastic Bag," is filmed in the style of a Nature Channel documentary program and tracks the "migration" of a plastic bag from a grocery store parking lot to the "Great Pacific Garbage Patch" in the Pacific Ocean.

Though lighthearted in tone, the short film hammers home the stark reality of California's plastic bag pollution situation: 19 billion bags are used every year, creating over 123,000 tons of unnecessary waste, costing taxpayers $25 million in cleanup costs a year, says Heal the Bay President Mark Gold. "Less than five percent of all single-use plastic bags are recycled, with many ending up as litter and in the ocean as plastic pollution," Gold says. Gold, explaining the philosophy behind using humor to make a serious environmental point in support of the single-use plastic bag ban.

"Rather than lecturing the audience, we wanted to create a film that would capture people's attention with humor," Gold says. "At the same time, we saw this as subversive way to make viewers realize the serious, far-reaching problem of single-use plastic bag pollution."

The "mockumentary," which was shot on location throughout Los Angeles, was developed by director Jeremy Konner of Southern California's Partizan Pictures, along with the the advertising agency DDB LA. The film had "little to no budget" and was created solely with donated time, Heal the Bay's Gold says.

Heal the Bay won't be getting any protests about the short film from California's grocers, since the industry supports the plastic bag ban bill through its trade organization, the California Grocers Association.

The 'Bag Monster'

Heal the Bay's short film comes on the heals of another humorous campaign in favor of AB 1098, which was held on August 12 at Ghiradelli Square in San Francisco.

The star of that pro-single-use plastic carrier bag ban legislation event was the "Bag Monster," otherwise known as Andy Keller, the inventor of the popular Chico Bag reusable shopping bag. Actually the "Bag Monster" is a costume made out of 500 single-use plastic carrier bags which Keller created to wear as a way to demonstrate the impact the plastic bags have on the environment. It's estimated each shopper in the U.S. on average uses 500 plastic carrier bags each year.

Keller now has numerous volunteers who wear the the "Bag Monster" costumes at special events, like the one on August 12 at Ghiradelli Square, which was a rally in support of AB 1098.

Keller and a bunch of other "Bag Monsters" staged what they called a "100 Bag Monster March" through the popular San Francisco shopping venue on August 12 in support of California's single-use plastic carrier bag ban.



In addition to the March, the event featured a press conference by Keller and supporters, as the video below details.



Press Conference: Part 2



It's not over until it's over though

In contrast to these and other activities from the various pro-single-use plastic carrier bag ban groups on the eve of the California State Senate's vote, those against the ban, including the plastic carrier bag industry trade association, are doing very little overt campaigning against the legislation.

Instead, opponents have been focusing most of their efforts on lobbying legislators. However, with such widespread support for the legislation, including from the California Grocers Association, the single-use plastic carrier bag industry appears, based on its low-level of campaign activity and even direct lobbying, to be seeing the writing on the wall that the bill will pass, and as he has said he will do, signed by the Governor.

But we doubt that will be the end of the story. Instead, it's likely the single-use plastic bag industry is saving its efforts - and cash - to fight the plastic bag ban once it is passed and signed into law by the Governor, something the industry has been successful at doing against bans in California cities such as Oakland and others. Stay tuned.

[Readers: Fresh & Easy Buzz has been reporting on, writing about, and offering analysis and commentary on the single-use plastic carrier bag, reusable bag, and related topics and issues since early 2008. Click here, here, here and here to read.]

Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores

News/Analysis


On August 4, California State Assemblymember Hector De La Torre (center at the podium above) and supporters held a press conference at the California State Capital in Sacramento to promote passage of AB 1060, which would ban the sales of alcoholic beverage items at self-service checkout lanes in California grocery stores. Above is a brief video of the press conference.

To paraphrase the late General Douglas MacArthur, who said in his farewell speech to the U.S. Congress in 1951, "Old soldiers never die; they just fade away," we say: 'In California, legislative bills don't always die; they just come back with new titles.'

Such is certainly the case at least with California State Assembly Bill 1060 (AB 1060), which was first introduced by Assemblymember Hector De La Torre (D-South Gate, Southern California) in the summer of 2008 as AB 523.

AB 1060, the bill formerly known as AB 523, is back - and it's been passed by the California State Assembly and is headed to the State Senate for debate. AB 1060 could get its first hearing on the Senate floor as early as Wednesday, according to De La Torre, it's author.

If passed by the California State Senate and signed by the Governor, AB 1060 will ban the sale of alcoholic beverages at self-service checkout counters in the Golden State's grocery markets, along with in any other format retail store offering adult beverages for sale.

The argument behind AB 1060 is that banning the sale of alcoholic beverages at self-service checkouts will help prevent the sale of liquor to minors. "We need to do everything we can to prevent alcohol abuse by minors," says Assemblymember De La Torre. "AB 1060 will ensure that all alcohol purchases are made through a face-to-face transaction with a cashier who can check proper identification - we currently require it for cigarettes, spray paints, and some over the counter drugs.

De La Torre has a fairly strong argument from a legal precedent perspective for AB 1060. As he mentions in the above quote, it's illegal for retail stores in California to sell cigarettes, spray paints and certain over the counter drugs like cold medicines containing Pseudoephedrine, which is used to make Methamphetamine, via self-service checkout. Instead, the products can only be sold to customers face-to-face by a clerk at a full-service checkout lane.

We first wrote about the legislation, then known as AB 523, in this July 14, 2008 piece: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.

In the story we called the bill - which is now AB 1060 - the "Tesco Fresh & Easy Law," not because the legislation was authored to directly target Tesco's Fresh & Easy Neighborhood Market, but rather because if passed it will require the fresh food and grocery chain to change the policy in its 98 California stores from self-service checkout only to having at least one full-service checkout lane, since AB 1060 requires all purchases of alcoholic beverages to be handled face-to-face by a store clerk at checkout.

The legislation if passed would have little if any affect on the state's other grocer's, since virtually every chain and independent in California that offers self-service checkout also offers the option of full-service as well in-store. Therefore, the "Tesco Fresh & Easy Law" coinage has a certain reality to it in that Fresh & Easy Neighborhood Market would be the only major grocery chain in California forced to make a serious operational policy change as a result of the law.

Tesco's Fresh & Easy offers what it calls "assisted self-service checkout" in its 159 stores located in California, Nevada and Arizona, by which it means customers scan and bag their own grocery purchases but can ask a clerk stationed at the front-end of the store for assistance if desired or needed.

AB 523, essentially the same bill as the current AB 1060, wasn't passed in the 2008 State Assembly session. De La Torre reintroduced the legislation about a year ago as AB 1060. The bill has sat in committee until recently, when the Assemblyman and his supporters breathed new life into the legislation, in large part based on two recent studies.

The studies

On August 4, 2010, De La Torre and representatives from San Diego State University’s Center for Alcohol and Drug Studies and San Diego's Metro United Methodist Urban Ministry held a press conference in Sacramento to release findings from two recent studies done by the groups regarding the selling of alcoholic beverages through self-checkout systems used at grocery stores.

The point of the studies was to determine how easy it might be for minors (under 21-years of age in California) to purchase alcoholic beverages using the self-service checkouts in grocery stores.

In the San Diego State University study, researchers sent participants into 216 grocery stores with self-checkout machines in five Southern California counties with the charge to attempt to defeat the safeguards built into the self-checkout machines which are supposed to prevent minors from being able to purchase alcoholic beverages using the self checkouts.

In about one out of every 10 instances, the self-checkout machine failed to lock up when alcohol was scanned so the purchaser could complete the transaction without any intervention from an employee, according to Dr. John Clapp, director of the University's Center for Alcohol and Drug Studies.

In addition to the machines not locking up, the study found that in 8.4% of purchase attempts through a self-checkout machine, study participants/shoppers were not asked to show their identification. Participants were aged 21-23, and were independently judged by a panel to be 23 years old or under, Clapp says.

California law requires self-service checkout machines to lock up whenever an alcoholic beverage item is self-scanned by a customer so the shoppers age can be verified. That's the safeguard the participants were instructed to see if they could defeat.

Clapp draws the following conclusion from the study: "Consistent with the recommendation of the U.S. Surgeon General, preventing underage drinking requires a zero tolerance policy for any system that potentially allows a minor or intoxicated person to purchase alcohol. Our study clearly showed that the self-checkout system has several vulnerabilities and could be a potential source for the illicit sale of alcohol to minors."

In the second study, conducted by the Youth Council at Metro United Methodist Urban Ministry in San Diego, a group of participants ages 21-23 were sent into 29 grocery stores in San Diego County with self-checkout machines and told to try to "game" the self-checkout systems, according to John Hughes, the executive director of the ministry group. Gaming the system in this case means being able to scan and purchase an alcoholic beverage item without the self-checkout machine locking up, as is required by California law.

The participants were able to successfully game the system 69% of the time, Hughes says. He says the study participants were able to fool the self-checkout system by scanning an item of equal weight, such as soda pop, and then bagging an alcoholic item. A variety of different items were used that easily worked to purchase alcohol undetected. All alcohol was paid for and all of the young adults who participated in the community assessment were over 21 and of legal age to purchase alcohol, according to Hughes.

Supporters

The two studies, along with key support from MADD (Mother's Against Drunk Driving), has fast-tracked the once languishing AB 1060.

"MADD believes we can help to reduce the threat of drunk drivers on our roads by stopping the sale of alcohol through self-checkout machines," says Gail Butler, MADD California State Executive Director. "MADD strongly supports AB 1060 to ensure that alcohol is sold in face-to-face transactions."

The bill has also picked up support from numerous California law enforcement officials, some who joined Assemblymember De La Torre at the August 4 press conference at the State Capital.

AB 1060 is also being supported by the United Food & Commercial Workers (UFCW) union, which represents about 1.3 million unionized grocery store employees and allied workers in the U.S. and Puerto Rico. UFCW representatives are currently lobbying legislators in Sacramento, urging them to support the legislation.

The UFCW, which counts California among its leading states in terms of union members, has been locked in a fight with Tesco for nearly three years over the union's desire to organize the grocery chain's store-level workers, as we've reported on and analyzed extensively on Fresh & Easy Buzz. [Click here to see our past stories on the issue.)

It also happens to be the case that the UFCW isn't crazy about self-service checkout in general, and particularly isn't crazy about grocers like Fresh & Easy that offer self-service only, because it reduces and eliminates the need for grocery checkers and baggers. As such, the union's support of the measure is obviously multi-layered: It supports AB 1060 because it's in favor of reducing sales of alcohol to minors, but it's also well-aware that the law would impact Tesco's Fresh & Easy directly if passed. That impact, which would as we've said require the chain to at a minimum add one full-service checkout lane in each of its stores in California, favors the UFCW's position.

AB 1060: An unintended favor to Tesco's Fresh & Easy

Ironically, in our analysis, the passage of AB 1060, which would force Fresh & Easy Neighborhood Market to operate at least one checkout in each of its California stores, would be a positive development for the grocery chain.

In this 2009 piece - March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track - we suggested seven operational changes Tesco needs to make at Fresh & Easy in order to help improve its sales and profits. Fresh & Easy has lost over half a billion dollars since it opened its first stores in November 2007.

One of those seven changes is that Fresh & Easy needs to add at least one, and more logically two, full-service checkout lanes in each of its 159 stores. (You can read our analysis in the March 7, 2009 story linked above.)

If AB 1060 becomes law, it will force Tesco to make such a change, adding at least one full-service checkout lane in its stores, which is something the grocery chain should have done long ago - and should do on its own today, in our analysis and opinion.

And although Tesco has yet to take our advice on this matter, it has recently taken one of Fresh & Easy Buzz's seven retail operations changes into account. In that same March 2009 piece our first of the seven suggestions was that Fresh & Easy Neighborhood Market accept WIC Vouchers in its stores. Last month Tesco began accepting WIC at its Central and Adams Fresh & Easy store in South Los Angeles and has additional stores slated to begin accepting the vouchers soon. [See - July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow]

Unintended consequences

We don't think having state legislators make retail operations policy for grocers is the greatest idea. But, ironically, if AB 1060 passes, leading to Fresh & Easy Neighborhood Market's creating at least one dedicated full-service checkout lane in each of its California stores, the term the "Tesco Fresh & Easy Law" will probably end up meaning the State of California passed a law, AB 1060, which actually forced Tesco to make a change - adding the full-service checkout lanes - that resulted in more satisfied customers and an increase in business at the 98 California Fresh & Easy stores.

Fresh & Easy Buzz will be on vacation from August 5 -to- August 13.

Independent Film 'READY, SET, BAG!' Chronicles the Serious, Humerous and Ruthless Life of Competitive Grocery Bagging

To paraphrase the late comedian Rodney Dangerfied - "Grocery baggers don't get enough respect."

Think about it, grocery store baggers, who're often called courtesy clerks these days, have arguably the most face-to-face contact - and are the employees shoppers have the last contact with when leaving the store - with a grocer's customers than any other store employee or company executive. Yet the typical supermarket chain CEO makes more money in just a few hours than a typical bagger makes in a year.

And least you think it's the case, grocery industry CEO's don't have anything on grocery baggers when it comes to being competitive.

Every February grocery baggers from across the country meet in Las Vegas, Nevada to vie for the title of 'National Best Bagger,' in the National Grocer's Association's (NGA) Best Bagger
National Championship competition. (see the 2010 winners here.)

The baggers represent the grocery retailers they work for and come from throughout the U.S. to compete in the competition, which is held in conjunction with the trade associations's annual convention. The NGA is the national trade group for independent grocers in the U.S.

The annual grocery bagging competition receives a fair amount of publicity each year, particularly from media outlets in the winners' hometowns. But a new independent film - 'READY, SET, BAG!' - aims to elevate the annual bag off competition and grocery baggers to iconic status.

The 80-minute film, produced by Justine Jacob and co-directed by Ms. Jacob and Alex D. da Silva, is currently showing at select theaters throughout the U.S. (You can view a list of upcoming screenings here.)

Oren Jacob is the executive producer of 'READY, SET, BAG.' It was his idea to make the film about competitive grocery bagging and the NGA annual bagging competition.

Justin Jacob is a filmmaker and entertainment law attorney in the San Francisco Bay Area and the former president of the Bay Area Women in Film and Media organization. She produced and co-directed, with da Silva, the award winning independent film 'Runners High,' in 2006.

Alex D. da Silva has been working in the film industry since 1989. He received an MA Degree in Film in São Paulo, Brazil and has worked as a producer, cinematographer and director in commercials and non-commercial projects shot in the U.S. and Latin America. He produced and directed the award winning short film 'O Cantor de Samba' and co-directed 'Runners High.'

'READY, SET, BAG!' is a true slice of Americana.

"Americans don't only work hard, they also like to have fun and the world of competitive grocery bagging is often bizarrely entertaining and unexpected," says producer Justin Jacob. "Contestants unveil their competitive side as they train and take the competition - but never themselves - seriously. Spanning the US, they are the heart of the bagging competition, their workplaces and of 'READY, SET, BAG!'"

In the film viewers get to meet Jacob, a once shy and overweight teenager who blossomed and found friends when he got his first job at a grocery store.

Then there's Brenda. She works beside her daughter as a grocery bagger and rides Harley Davidson motorcycles with her hunting-obsessed husband, James, when not working at the store.

Another competitive grocery bagger in the film is Kim, whose posse of 45-80 year-olds gives her a sendoff to the annual grocery bag off in Las Vegas she’ll never forget.

Other competitive grocery baggers featured in 'READY, SET, BAG!' are:

>Roger, a Chinese/Trinidadian immigrant who sees the prize money from the bagging competition as his entry ticket to the American Dream;

>Ryan, an African-American home-schooled farm boy with a grocery bag full of charm;

>Brian, a returning state champion determined to redeem himself after the mistake that cost him the grocery bagging national title the previous year; and

>Jon, a 49-year-old stoic grocery bagger from Minnesotan who has one last chance to prove that he can snag "bagging gold" before he hits fifty.

Here's how (in italics below) the filmakers describe their motivation for making the film about the NGA's annual grocery bagging contest and the competitive grocery baggers who make it happen:

"Our story originated when Oren Jacob, our executive producer, was talking with some friends about their summer jobs back in high school. Someone blurted out “I used to be a grocery bagger, but never made it out to the regionals…

Driving home that night, Oren called and said, 'I know what our next film is about.'

The idea of taking something as mundane and common as bagging to an extreme competitive level intrigued us and we wanted to find out who would participate in such an endeavor. We started researching the competition, the National Grocers Association that runs the competition, and the supermarket industry in general. We found a competition that has been going on for over 20 years, an organization with a purpose to advocate for independent grocers that cater to their communities, and an industry filled with integrity where individuals love their jobs and serving their customers. We knew we had more than a competition film.

We then pitched the story at the Sundance Producers Conference, and won the Best Pitch award. With our first $500 in funding secured, and five months to go before the national competition, we started a tour of 21 states filming regional bagging competitions and meeting state champions. After propane fireballs, a dedicated coach, a winning 4H dairy goat, a victory dance, a harem, a rugby scrum, some dead deer, band camp, a 50th birthday party, drinking moonshine with flamingos, and a whole lot of very well packed groceries, what we discovered was the heart of America.

We had a blast and saw an opportunity to tell intimate, personal stories that would reveal a slice of Americana we all participate in. As we filmed the final round of the National competition in Vegas, we knew we had a compelling story to tell about these individuals who exemplified being the best at what you do, no matter what that is.

After watching our film, we’re confident that you will never go through a checkout aisle the same way again, knowing what it takes to be qualified, at a professional level, to ask the question 'Paper or plastic?'"

The film first debuted at a handful of film festivals in 2008-2009 but is just now getting a widespread national screening.

In 2008, 'READY, SET, BAG!' received the Award of Excellence at the prestigious Indie Fest film festival. In 2009 the Honolulu International Film Festival gave it its Award of Excellence in Filmmaking. The grocery bagger-focused film also is an official selection at this year's 2010 Sonoma (California) International Film Festival.

The filmakers are walking the talk (or video in this case) as well with their award-winning film: They're donating $1 from each ticket sold for 'Ready, Set, Bag!' to a local food bank in the cities where the film is shown during its current national tour.

Additionally, the filmakers are doing a number of other things to help America's hungry, as part of their philosophy that since the movie is set in the retail grocery business and focuses on bagging groceries, they have a certain obligation to assist those less able to buy bags full of food at the supermarket.

Those activities are:

>Food donations at screenings: In certain locations, individuals get $1 off the ticket price for bringing in at least 3 cans to donate to the local food bank.

>BlipTV Channel: Clips of the film and other related contect are available for viewing at http://www.readysetbag.blip.tv/. All of the advertising revenue from the channel is being donated to Feeding America, the national organization that supports U.S. food banks and pantries. The site is regularly updated with new video.

>Online: The filmakers are giving 10% of all item sales from their online store to Feeding America.

>Groupon.com Deal: The filmakers are offering a deal at http://www.groupon.com/. A donation of $1 from the deal goes to the local food bank when tickets to the film are sold through Groupon.

According to the filmakers, donations from the above activities have so far this year provided over 5,000 meals.

Fresh & Easy Buzz readers who work in the retail food and grocery business, or have worked in the industry, particularly as a grocery bagger at some point, will get caught up in the film.

But 'READY, SET, BAG!' is far more than a film for past and present grocery industry employees. Rather, it's a serious, humerous and even ruthless sociological look at the world of competitive grocery bagging and more. As mentioned earlier - it is a true slice of Americana.

The eight competitive grocery baggers featured in the film 'READY, SET, BAG!"

Minnesota State Champion, Jon Sandell
With a goal to make it to the national competition the year he turned 50, 49-year-old Sandell won the state competition. Tough on the outside but with a generous heart, he represents Chris’ Food Center, a family-owned store run by a previous best bagger champ and proud displayer of numerous State Bagger Champion trophies. Sandell wants the top prize and brings along his “Harem," three female coworkers who knew that Sandell was their ticket to Vegas.

Utah State Champion, Brian Bay
The year before, Bay failed to place at nationals when he missed a pack of lifesavers that had rolled up against the side of the checkout stand. This year, he returned to beat out 38 competitors and became Utah’s reigning State Champion. After a year of practicing and more determined than ever, he, his wife and cheering squad can’t wait to return to Vegas for his chance at redemption.

Alabama State Champion, Roger Chen
Chen is very clear about why he’s participating in the contest – for the money. Describing himself as the “typical American,” he is a 25-year-old Chinese immigrant born in Trinidad, Tobego. He has been in the US for two years studying computer science and needs money to pay for his education. His lively and dedicated coach, Publix store manager Joe Yaeczitis, has found what he believes is the contestant who will finally bring Alabama its first national title.

Pennsylvania State Champion, Kim Weaver
Forty-eight year old Weaver is grounded, works with her teenage kids at the same store and loves to play pinochle. Once a month she gets together with the Flamingals – a hilarious group of eight women from the store (aged 45-80) to eat, play cards, have sleepovers and drink. Surrounded by flamingo paraphernalia, they give Weaver a special Vegas sendoff she’ll never forget.

California State Champion, James Hunter
Competing in the “Thunderdome of bagging competitions,” the driven, highly competitive Hunter had to drown out 400 screaming, dressed up, face-painted bagging fans to emerge the California State Champion. He’s a rugby star at school and off to college this year. Both a team player and a solo dynamo, he feels fully confident to compete against the best of the best in Vegas.

Iowa State Champion, Brenda Wygle
It took Wygle ten years of competition to finally become the Iowa State Champion. Her daughter, 17, who works with her at the store and has stuck by her side through it all, has no doubt her mom can win at the national level. Often taking Harley rides with her husband and son, Wygle is proudly the first woman to represent Fareway Stores over the 20 years of competitions.

Virginia State Champion, Jacob Richardson
At 17, Richardson is the youngest state champion in the competition this year. He’s outgoing, sweet-natured, and can’t stop talking. But, he wasn’t always this way. Once an overweight and solitary videogamer, getting a job at Food City helped him break out of his shell, make great friends and lose weight. Now when he’s not working, he’s at the store hanging out with his friends or talking with them on MySpace. His very supportive dad and sister have dreams Richardson will win in Vegas, but he says he knows he’s “already a winner.”

Ohio State Champion, Ryan Hamilton
“Ryan Hamilton IS Ohio,” as his friends describe. The consummate overachiever, Hamilton grew up and was home-schooled on a farm in Mt. Vernon, OH. He’s the winner of numerous 4H awards, a college swimmer, volunteer for an inner city afterschool program, and studying to become a vet. But what really matters to him is family.

Arizona 'Tweeps' Treasure Hunting in Fresh & Easy Neighborhood Market's Twitter-Trivia Contest

Metropolitan Phoenix, Arizona Market Region Report
Promotional Merchandising & Promotional Events

On July 19, we reported that Tesco's Fresh & Easy Neighborhood Market was planning to launch a Twitter.com-based trivia/treasure hunt-oriented consumer promotional contest for its 34 stores in Metropolitan Phoenix, Arizona, beginning on July 30.

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

Fresh & Easy kicked the promotional contest off on July 30, as we reported it would.
In the contest, the grocer posts three Tweets each day on its @fresh_and_easy Twitter feed. The Tweets are "clues" (the trivia aspect) about one of its stores in Metro Phoenix. Based on the Tweeted clues, 'Twitter Tweeps' and Arizona shoppers are to figure out which of the 34 stores are being referred to. Once a person determines the specific store and answer, they then visit the Fresh & Easy Kitchen Table in the store, where they tell the clerk working in the area what the clue or promotional code from the Tweet is (the treasure hunt aspect.)

If the person doing the above is one of the first ten people to do so at that particular Fresh & Easy Arizona store that day, they win a $50 Fresh & Easy Neighborhood Market gift card. There are 10 winners each day of the contest. (You can view the rules here.)

Now in its fourth day, the contest appears to be generating interest.

Fresh & Easy Neighborhood Market is using the Twitter hashtag #FEAZ to track Tweets about the contest. If you use twitter, you know how to find it. If you're not a Twitter user, you can go to twitter.com/fresh_and_easy. A couple of winners have offered "Winning Tweets" about their $50 gift cards. Also, Fresh & Easy has posted a picture here of the first winner in the contest.

The promotional contest runs until August 8, so there's still four more days for potential Arizona trivia experts and "Twitter Tweeps" to win a $50 gift card.

As we mentioned in our July 19 piece, promotions like this one, as well as others, are something Tesco's Fresh & Easy Neighborhood Market needs to be doing on a regular basis in order to create excitement in and around its 159 existing fresh food and grocery stores. Such promotions are additive, meaning the parts - regular and comprehensive promotions and special events - eventually help to create a whole, which becomes the way in which shoppers view a grocer.

Safeway Unveils Plans For New 'Lifestyle' Format Store Designed to Fit Today's Berkeley, California Lifestyle

Safeway plans to turn one of its oldest stores - a smaller, more conventional supermarket at Shattuck and Henry in Berkeley, California's "Gourmet Ghetto" neighborhood - in the San Francisco Bay Area into the gleaming, two-level, 42, 492 square-foot neighborhood-oriented "Lifestyle" format supermarket pictured in the artist's rendering above. [Credit: Lowney Architecture.] (Note: Click on all the artist's renderings to enlarge.)

Northern California Market Special Report - San Francisco Bay Area

Pleasanton, California-based Safeway Stores, Inc. isn't letting its less than stellar second quarter 2010 profits stop it from planning new stores in its San Francisco Bay Area home base market.

On July 22, Safeway reported a profit of $141.3 million, or 37 cents a share, down from $238.6 million, or 57 cents, a year earlier, a whopping 41% decrease. The prior year included a tax gain of 14 cents. Revenue rose 0.6% to $9.52 billion, as same-store-sales excluding fuel fell 2.5%.

Safeway's total sales were $9.5 billion in the second quarter of 2010, essentially flat compared to $9.5 billion in the second quarter of 2009.

The Northern California-based grocery chain's gross profit declined 32 basis points, to 28.55% of sales in the second quarter of 2010, compared to 28.87% of sales in the second quarter of 2009.

Safeway said price-cutting measures and deflation are largely the reason for the 41% quarter-over-quarter profit drop.

While this is true, and the recession has played a big part in Safeway's price-cutting, what's also true is that Safeway (along with other conventional supermarket operators like Supervalu, Inc.), has been having to aggressively price-cut because of increased competition from discount food and grocery retailers like Walmart, Costco and others on the price-focused end and specialty grocers like Whole Foods Market, Trader Joe's and others on the higher, or more specialty-oriented, end of the spectrum. It's sort of a conventional supermarket chain sandwich, with Safeway being the meat and the two different types of grocery formats - discount and specialty - being the two slices of bread, pushing from both ends.

This phenomenon is no less the case in Safeway's home San Francisco Bay Area market, where it's facing increased competition on all fronts - from disounters to specialty grocers.

Even when the economy gets substantially better it's going to be difficult for Safeway, along with Supervalu, and Kroger, the three leading U.S. supermarket chains, to raise prices much because of this existing and growing alternative format competition, as well as due to the competition among each other and other conventional supermarket format competitors. Inflation will help a little when it comes but the end of food and grocery price deflation doesn't appear anywhere in sight, in our analysis.

But despite the increased competition in the Bay Area, where it's headquartered and where about 60% of its 200-plus Northern California supermarkets are located, Safeway Stores, Inc. remains the market share leader in the nine-county region, home to about 7 million people, by a long shot. And it's protecting its home turf by remodeling numerous stores in the region, along with building new ones. Modesto, California-based Save Mart Supermarkets' Lucky chain is the number two market share leader in the Bay Area, but Safeway holds the top position by a substantial number of share points.

On July 25 we wrote about Safeway's planned new flagship store in the East Bay Area city of Pleasanton, where the grocery chain has its corporate headquarters, which the grocer recently unveiled to various groups in the city. [See - July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening]

Safeway on Shattuck in Berkeley: Night and day

On July 26, Safeway unveiled plans for yet another new supermarket - actually a stem-to-stern renovation and expansion of a smaller, existing store at Shattuck and Henry street, in the East Bay Area city of Berkeley, which is about 25 miles from Pleasanton. The renovation and expansion project is so extensive though, for all intents and purposes it's a "new" store.

Plans for the Shattuck Safeway in Berkeley call for turning the single-level supermarket into a two-level, 42, 492 neighborhood-oriented supermarket. The expansion adds about 15,000 square-feet to the current store's size. (Night and day: View the existing store here. Now view the plans for the expanded and renovated Shattuck Safeway store here.)

The store will be Safeway's latest version of its "Lifestyle" format, which includes expanded organic and specialty foods selections, an in-store Signature Cafe prepared foods center, expanded fresh produce and meat departments, an in-store bakery with a cafe, along with numerous other special features. (Before and after: You can view the various existing Shattuck store's departments here, along with what the same departments are planned to look like in the new store.)

The project's designer for Safeway is Oakland, California-based Lowney Architecture, which is currently working on two other major Safeway store renovations in the Bay Area.

The firm also is the designer of the 20,000 square-foot building in the Pedro Point shopping center in Pacifica, California, in which Tesco's Fresh & Easy Neighborhood Market plans to open a store. Fresh & Easy is using about 14,000 square-feet in the building. The remaining space is currently being offered for sub-lease. The building has been completed for over a year. [See - July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle]

Lowney Architecture, which is the design firm of record for all of Apple Computer's Apple retail stores nationally, also designed the "European Food Hall-Style" Whole Foods Market store in Oakland and is currently working on new Whole Foods stores in San Jose (60,000 square-feet) and in Dublin (55,000 square-feet), which is near Safeway's headquarters in Pleasanton. [See - May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in Northern California and June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA]

Pictured above is an artist's rendering of the planned Safeway store on Shattuck, which is located in the heart of Berkeley's "Gourmet Ghetto," home to dozens of restaurants and retail shops featuring nearly every kind of specialty, gourmet, ethnic, organic and locally-grown food and beverage one can think of.

Among the key design features of the planned expanded and revamped Safeway supermarket on Shattuck and Henry in Berkeley are:

>A new entry plaza and seating areas along Shattuck (depicted below)

>New access lobbies to the existing garage

>A renovated parkling garage with new on-site access ramp, featuring improved lighting, visibility and safety, as pictured below.

>New pedestrian access paths and bike parking

>Bay-friendly landscaping, bio-filtration of site water runoff, and an emphasis on native plant species for all landscaping.

>A 20-foot landscaped buffer at adjacent neighbor and improved landscaping along Henry Street.

Safeway Stores, Inc. and its architecture firm have have been working on the design for the store for a considerable amount of time. The first version, which was to demolish the Shattuck store and build a new supermarket from the ground up, was rejected by numerous neighborhood groups and individuals. Since then, Safeway and the designers have been working closely with neighborhood groups and residents in the planning of the store.

In fact, Safeway introduced the plans and design for the store on July 26 in a letter to residents of the Shattuck neighborhood. The letter is below (in italics):

July 26, 2010

Dear Berkeley Safeway Neighbors and Interested Parties:

Last December at a community meeting held at the Jewish Community Center, Safeway presented a new approach to improving this aging store. The proposal features a thorough remodel and addition of about 15,000 square feet instead of demolishing the store. (Safeway will keep the store open during construction to minimize shopper inconvenience.) In April of this year Safeway began meeting with the city’s Design Review Commission. The Commission’s suggestions, along with those of neighbors and other concerned residents, greatly improved the design and addressed important issues for Henry Street residents across the street from the store.

Today’s design is a vast improvement over the current store -- both inside and out. Great care was taken to bring the store out to Shattuck, enliven the corner with chairs and tables and attractive benches, provide vistas into the store by adding lots of glass, and modernize the exterior using concrete, composite wood, quartzite tile and glazed aluminum. We responded to many concerns brought to us by neighbors including retaining more trees, increasing bicycle and pedestrian safety, enclosing the loading dock, relocating mechanical equipment, and eliminating outside dumpsters and recycling.

The new design features a revamped parking lot with designated pedestrian paths shaded by a new canopy of trees. A ramp from the surface lot leads to underground parking which will be light and bright and have easy access to the store. The landscaping plan calls for saving most of the healthy mature trees, while adding thirty new trees, along with drought tolerant shrubs, bay friendly groundcovers, and climbing vines that cover walls facing Henry Street and deter graffiti. Native grasses and plants on the Henry Street side serve as a bioswale, filtering groundwater run-off before it empties into stormwater drains. The remodeled building will be far more energy efficient and is expected to be LEED compliant.

The next step for this proposal is a hearing before the Zoning Adjustment Board (ZAB) on August 12th at 7pm. The members of the ZAB will be trying to assess community support for improving this store. While we are very pleased to have the enthusiastic support of the North Shattuck Merchants Association, it is equally important that we demonstrate that Berkeley residents want Safeway to make this investment in their community to expand and improve the store. Safeway remains the only large grocer in California to employ union workers. The remodeled store will create about 35 new union jobs and re-invigorate the unique North Shattuck shopping area. In addition, the new store is expected to generate more than $200,000 annually to the City of Berkeley through increased sales and property taxes.

Sincerely,

Your Safeway Team!

As the last paragraph in the July 26 letter says, Safeway Stores, Inc. must still get approval for the renovation and expansion of the store from the City of Berkeley. That's no easy achievement in Berkeley, which along with being the home of the University of California's flagship campus and the city where the 1960's Free Speech Movement was born, is known for its citizen's participation in local land-use planning and politics.

For example, many neighborhood residents think the store will be to big and cause traffic congestion, even though Safeway did address those issues in its revamp of the plans and design. But then - it is the residents' neighborhood.

Other residents though like the design. The existing Safeway at Shattuck and Henry is small and older, as you can see in the link above. As such, many want a larger, modern and more upscale version like the one Safeway is proposing.

For Safeway, the new store will mean significantly increased sales, particularly of higher margin fresh, organic and specialty foods, which because the current store is smaller can't be merchandised to the extent the grocer would like to. The neighborhood is a particularly premium demographic - it's called the "Gourmet Ghetto" after all - for one of Safeway's newest version "Lifestyle" format supermarkets.

Odds are that Safeway will get the store approved with just a few minor changes. The grocer plans to start construction very soon after that approval comes, it says.

Below are the stories thus far in our '2010 Northern California Market Special Report' series:

July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening

July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

Additionally: Click here to read a selection of past stories on Tesco's Fresh & Easy Neighborhood Market and Northern California. Click the "older posts" link at the bottom of the linked pages for additional posts on the topic.