Fresh & Easy Neighborhood Market to Shrink Health & Body Care Sections in Stores; Add Candy and Snack Items

Fresh & Easy will continue to merchandise its 'retreat' private brand body care line (above) in the slimmed-down HABC departments. The products contain no artificial colors, parabens, mineral oils or SLS detergents.

Category Management & Merchandising
News & Analysis

Fresh & Easy Neighborhood Market is preparing for a fairly major chain-wide category re-merchandising project, in which the Tesco-owned fresh food and grocery chain will be significantly reducing the HABC (health and body care) sections and product SKU-counts in its 172 stores, Fresh & Easy Buzz has learned.

The project is set to start soon. Current plans call for it to be completed by early-to-mid summer.

In its new schematic, Fresh & Easy plans to reset the HABC section in each store, consolidating it down to just a single aisle - aisle six - which is an about a 40% space reduction.

In order to achieve the single-aisle consolidation, Fresh & Easy is eliminating numerous items and will offer an even more limited assortment of HABC category SKUs than it currently merchandises, putting a focus on carrying just the basic health and beauty/body care items, under a few national brands. Fresh & Easy will continue to offer its 'retreat' private brand HABC products in the store sections.

The HABC category reset will free-up shelf-space in the back in the stores, which is where the sections are located.  Fresh & Easy's merchandising team then plans to replace the HABA SKUs with a selection of bulk candy, along with adding new packaged cookie and snack food items.

Additionally, the HABC category reset will free-up space on aisle five in the stores. Fresh & Easy plans to use that space to add a variety of new packaged snack chip and related items, with a focus on the Frito-Lay brand.

Two aisle end-caps will also become available because of the HABA category reset. Current plans call for the end-caps to be used to merchandise vitamins, dietary supplements and energy bars, according to our sources.

Health and beauty/body care has been among the worst performing categories for Fresh & Easy Neighborhood Market since the chain's first stores were opened in November 2007. This poor category sales performance is the reason for the planned merchandising change and reset project, according to our sources.

By decreasing the amount of space for HABC in the small-format (10,000-12,000 square-foot) Fresh & Easy stores and reducing the number of SKUs offered in the poorly-performing category, then using the space to add the bulk candy and packaged cookie and snack food SKUs (which are traditionally higher-velocity categories and items) the grocery chain hopes to better maximize the available space, resulting in increased sales-per-square-foot in the stores.

Health and beauty/body care items are generally a good category for grocers because the items tend to offer retailer's higher margins than many consumable categories, like snack items, do. However, if the items aren't selling at a decent velocity, margin - good or bad - tends to be a moot point, as is the case with the overall category at Tesco's Fresh & Easy Neighborhood Market, where as we noted, HABC is a poor performer.

With this fact in mind, you can better see the philosophy behind Fresh & Easy's wanting to use the shelf space that will be freed-up by the HABC category reset to merchandise products like Frito-Lay brand snack chips, which tend to move off the shelves at a relatively high velocity in most grocery, drug, convenience and mass merchandiser stores.

Snack food giant Frito-Lay is owned by PepsiCo, best know as the maker and marketer of soft drinks, along with its snack chip brand. Fresh & Easy Neighborhood Market recently added a number of new Pepsi/PepsiCo brand soft drinks SKUs, along with those from Coca-Cola, to its stores. That and the planned offering of the new Frito-Lay snack chip SKUs is part of an overall planned increase in business the grocery chain has planned with Pepsi-Frito-Lay.

Pepsi and Frito-Lay distribute soft drinks and snack chips to all retail stores on a direct-store-delivery (DSD) basis, which includes having distributor service people merchandise the products. Store clerks replenish the shelves between deliveries, as needed. DSD, which Pepsi and Frito-Lay do very well, is a plus for retailers, including Fresh & Easy, because it not only provides vendor labor (stocking and merchandising), it also helps to manage inventory (which is good for cash flow) because the retailer need not slot the DSD items in its central distribution center and truck the SKUs to its stores.

One reason the HABC category has performed poorly in the Fresh & Easy stores is because in the main shoppers aren't using the stores as primary and in many cases even secondary shopping venues in significant numbers.

From a theoretical standpoint this might make sense since the Fresh & Easy format was designed to be a fill-in fresh food and grocery store, which shoppers would use for convenience purposes, along with shopping at bigger supermarkets and mass merchandise outlets.

But theory isn't always reality - and in practice this strategy isn't working very well for Tesco's Fresh & Easy, which needs to get its average market basket purchase size (the average amount of money a shopper spends per trip to a grocery store) up considerably, along with producing a significant increase in average store sales-per-square-foot.

In order to achieve these twin goals - which are just two of about five key metrics it needs to significantly improve in order to stem its $200 million-plus annual loss - Tesco's Fresh & Easy needs to get those customers who regularly shop at the stores (primary) to spend more money on each shopping trip. It also needs to convert a decent percentage of people who shop at the stores on an infrequent basis to more frequent customers, thereby increasing its total universe of at least secondary shoppers.

Shrinking the HABC sections and SKU-count won't alone do either of those two things for Fresh & Easy Neighborhood Market.

However, it will likely make better use the available space, at least from the perspective that the added consumables - bulk candy, packaged cookie, snack chip and other items - will most certainly sell in higher velocity that the HABC items currently are.

The average retail price points of the HABA items set to be discontinued are only slightly higher than the avewrage price points of the bulk candy and others snack food items that are replacing the SKUs. As a result, if the new consumable items set to replace the discontinued HABA SKUs sell at an about 15%-20% higher overall rate of velocity than the replaced SKUs, Fresh & Easy could then see a slightly measurable increase in store sales-per-square-foot attributable to the category re-merchandising project, in our analysis.

Product category merchandising - and item mix selection - is a dynamic process in food and grocery retailing. We like to compare it to painting the Golden Gate bridge, where once the painters finish painting one end of the famed span (a couple years after starting), they immediatly start over again on the end where they first began.

In other words, merchandising and re-merchandising is, or should be, an ongoing process, the goal of which is to continually fine-tune the product assortment offered and how it's merchandised, in order to optimize the stores' sales-per-square-foot.

This process is even more important in small-format, limited SKU-assortment stores like Tesco's Fresh & Easy because with few items - the 4,500-5,000 SKUs offered - there's less room for error than there is in the average supermarket, which carries 35,000-plus SKUs.

For a limited assortment grocer like Fresh & Easy Neighborhood Market to do well, it's essential, among other criteria, that it maximize its product mix, and localize it to the demographics and lifestyle criteria in its various market regions, which is something the Tesco-owned fresh food and grocery chain does not do, which is why you see the same product assortment in a Fresh & Easy store in a neighborhood that is 60% Latino but has few Asian-Americans as you do in a neighborhood that's 60% Asian but has a Latino population of 5%, for example.

In our analysis, Tesco's Fresh & Easy needs to put a much greater focus on analyzing and tweaking the product mix it offers in its stores.

We would look at a strategy that offers about 6,500 SKUs total, adding about 1,300 new SKUs to the stores. About 65% of those SKUs would be what's called a "core-mix," meaning the items would be slotted  in all Fresh & Easy stores. The remaining percentage of SKUs would be regionalized and localized, based on market region and neighborhood demographic/ lifestyle-oriented criteria.

As an example, Fresh & Easy stores in neighborhoods with significant Latino consumers would have a greater selection of Hispanic food items. And if the majority of those consumers were from Puerto Rico or Central America, for example, rather than from Mexico, the brands and items would be selected based on those regional preferences, which are real and significant. The same with Asian consumers.

Factors like education level (college graduates) age, percentage of married vs. single people and other key demographic and lifestyle-oriented variables should also be factored into the selection of that 35% of the total SKU-count that is regionalized and localized. And by addng the 1,500 new SKUs, Fresh & Easy could have roughly the same amount of items in its "core mix" as it currently carries in its stores in total.

As we said earlier, category merchandising and product assortment selection is a dynamic process, which is something United Kingdom-based Tesco needs to focus on like a lazer beam if it's going to even come close to breakng even with Fresh & Easy Neighborhood Market by the end of its 2012/13 fiscal year, which is less than two years away.

A Walmart Grocery Home Delivery Service in San Jose, California Wouldn't Likely Be Much to Write Home About

Walmart's ASDA chain delivers fresh food and groceries to online shoppers' homes in parts of the United Kingdom.

The Insider - Heard on the Street

An April 1 non-April Fool's Day report by Bloomberg (here) that Walmart Stores, Inc. might be planning to test an online-ordering and grocery home delivery service in the San Jose area in Northern California's San Francisco Bay Area has been getting a considerable amount of attention in the press over the last week.

However, as most often is the case, the numerous publications that have picked up on Bloomberg's piece have merely either re-printed the story partially, fully, or added a couple comments from a favorite industry analyst or two to what Bloomberg had already reported.

Here at Fresh & Easy Buzz we like to offer a bit more depth, particularly when it comes to a story first reported on by another publication. Therefore, I'm going to offer a little analysis, observation and commentary on what Walmart is up to in the San Jose, California region with its potential e-commerce/ grocery delivery scheme.

First, a little history: The idea of launching an online-ordering and home delivery business for fresh foods and groceries isn't brand new at Walmart Stores, Inc. A little over three years ago then corporate head of business development, David Wild, who's team was responsible for the retailer's initial small-format food and grocery store development efforts - the result of which are the four 'marketside by Walmart' stores in suburban Phoenix, Arizona that opened in August 2008 - was also very interested in Walmart's starting up an online ordering and home grocery delivery service.

The new business development team's initial target test market for the online/home delivery scheme was the San Francisco Bay Area. Wild, who left the company later in 2008 to become the CEO of United Kingdom auto parts and bicycle retailer Halfords, worked out of Walmart's Brisbane, California Walmart.com offices. Brisbane is an industrial and residential suburb of San Francisco, located about 50 miles from San Jose.

The online ordering and grocery delivery service was one of a number of new business ideas and concepts Wild and his team came up with that didn't become reality.

For example, another concept the team proposed was a brick-and-mortar health and wellness-oriented small-format store of about 10,000 square-feet that would be part drug store and part natural foods market, the overall focus being on selling products with a health and wellness orientation. Walmart has incorporated some aspects of the format into its new Walmart Express convenience format, the first three stores of which are set to open in a few months in Arkansas.

As part of the e-commerce/home delivery food discussions with the business development team in 2008, Walmart began slotting packaged food and grocery items on its Walmart.com website in early 2009, and has continued to add categories and items to the website since then. The items are ordered online, just like everything else on Walmart.com, and shipped to customers' homes via a postal carrier like Federal Express or UPS, just like Amazon.com does. No perishable foods are offered, however, just shelf-stable products.

Over the last few years, Walmart has off and on looked at testing the online ordering and grocery home delivery service, both in the San Francisco Bay Area and in a couple other regions of the U.S. The retailer's main interest in possibly trying such a service in the Bay Area is because Walmart has few stores in the region that offer fresh foods and groceries. It also continues to struggle in gaining approval from various Bay Area cities in its attempts to convert existing discount format stores into hybrid supercenters that offer fresh foods and groceries, along with attempts to build new supercenters, even smaller units in the 100,000-140,000 square-foot range. The average U.S. supercenter is about 180,000 square-feet.

As a result, the idea of launching a test of an online ordering and grocery home delivery service in the Bay Area has become more interesting to Walmart's senior brass. In essence, the long-term strategy the retailer is looking at in the Bay Area, where it hopes to open numerous smaller-format Walmart Market (30,000-60,000 square-foot food and grocery markets) and Walmart Express (15,000-30,000 square foot convenience-style grocery stores), is to combine however many supercenters it can get approved with the smaller-format stores mentioned above, and then add a grocery delivery service, starting in the San Jose region, where Walmart has enough supercenters so the stores can be used as order-fulfillment centers for the online orders.

Potential: The question that must be asked by and of Walmart though is: Does going into the online ordering and grocery home delivery business in the Bay Area, particularly at this stage of its meager brick-and-mortar store development and presence in the market region, make sense for the retailer? My answer: History and the current state of the online/home delivery business in the region suggests the answer to that question is...no.

For example, from the mid-1990's -to 2001 there were three retailers offering online ordering and home delivery of fresh food and groceries in the nine county San Francisco Bay Area, which today has a population of close to seven million people.

The three retailers were: Safeway Stores, Inc., which is headquartered in the East Bay Area city of Pleasanton; Albertsons; and Webvan, which was a pure-play online/home delivery grocery retailer that went bankrupt in 2011, after only a few years in business. Albertsons, then owned by Albertsons Inc. of Boise, Idaho, closed down its online ordering and home grocery delivery service a couple years later. Today, Safeway Stores, Inc. is the only major food retailer offering the service throughout the nine-county Bay Area. (What was the Albertsons' Northern California division is now owned by Modesto, California-based Save Mart Supermarkets. The stores operated under the Lucky banner.)

The fact Safeway today remains the only major fresh food and grocery online/home delivery grocer in the Bay Area, which research still shows is one of the better markets for the business in the U.S., is probably one of the motivating forces behind Walmart's consideration of launching such a service in the San Jose region.

Safeway fulfills customers' online grocery orders out of some of its supermarkets in the San Francisco Bay Area, where it has about 200 stores. Walmart would do the same, using a couple supercenters it operates in the San Jose metropolitan area.

But despite being the lone e-commerce/home delivery grocer in the Bay Area - and Safeway does a pretty good job at it - it remains a meager business for the grocer. Safeway CEO Steve Burd has recently said as much.

In fact, in an attempt to boost its online/home delivery business, last year Safeway held a very aggressive promotion over a number of months, offering first time users of Safeway.com, its e-commerce-home delivery site, $15 off any orders of $50 or more, along with free delivery. Safeway continued the aggressive promotion until mid-January of this year. Since then it's eliminated the $15-off deal but continues to offer free delivery to first-time users of the service. [You can read a December 15, 2010 story about the promotion in Fresh & Easy Buzz here: Safeway Wants to Grow its Online-Home Delivery Grocery Business - And is 'Giving Away the Store' to Prove it.]

Early this year Burd said in a conference call to analysts the promotion last year added some new business to Safeway.com but that basically it wasn't anything to write home about.

Keeping and continuing to promote the service makes good sense for Safeway though, in my analysis, because it fits well as an integrated and synergistic part of its overall food and grocery business in the Bay Area and in the handful of other U.S. regions where it offers home delivery. But, I can share this with you: Safeway's senior executives don't currently see Safeway.com as being one of the chain's major growth engines at present, even in its Bay Area home market.

Mega-Walmart can afford to experiment with and test an online ordering and grocery home delivery service in the San Jose region. After all, the start-up costs aren't huge - buying a few combination freezer/refrigerator/dry product delivery trucks, outfitting a few store backrooms to fulfill the online orders and spending some cash for marketing and advertising. But the benefits would likely also be meager, in my analysis.

Therefore, before it goes forward with the test - and our sources say Walmart hasn't decided if it will do so yet - the Bentonville, Arkansas-based mega-retailer should keep in mind that the majority of the customers of Safeway's online ordering and home grocery delivery service are dual-income (and higher income), well-educated younger professionals. These are the consumers in the Bay Area who primarily shop at Whole Foods Market, Safeway's more upscale stores and numerous other more upscale grocery markets in the Bay Area. They use Safeway.com primarily for convenience. Price isn't a motivating factor, particularly considering delivery charges add on $10 or more to a grocery order.

Will this demographic shop for their groceries at Walmart, even with home delivery? My analysis: I doubt it. Why: Walmart isn't their brand.Whole Foods is. Target is. Even Costco is. But not Walmart.

If I'm correct that means Walmart would need to reach a different shopper demographic (than Safeway does) with its online ordering and home delivery grocery service, like it does with its stores -  its traditional lower-income/middle income segment.

The problem with this segment when it comes to an online/home grocery delivery business for Walmart is consumers in these segments are looking to save money on grocery purchases not spend more, which unless Walmart delivers the orders for free or for a couple dollars, will be the case. Additionally, lower-to-middle income shoppers use online ordering/ home grocery delivery services in very low percentages, both in the Bay Area and nationally in the U.S., according to numerous studies.

Walmart might be tempted to think that because many lower-to-middle- income consumers use its Walmart.com service to buy products online and have the items shipped to their homes via a postal carrier, that these same shoppers will therefore use a home grocery delivery service in equal or similar numbers.

But the comparison is apples and oranges, so to speak. Why? Shopping for fresh food and groceries is a regular task and a very competitive enterprise. Most lower-to-middle income consumers shop at multiple stores, shop weekly ads, use coupons and look for the best deals. In contrast, ordering products, be it contact lenses, books, a television set or clothing, from Walmart.com for home shipment, which can actually be cheaper because there's often no sales tax on the items, is an irregular task that can be done after first comparing prices at brick-and-mortar stores.

Walmart's best strategy for the San Francisco Bay Area region is a smaller-format brick-and-mortar store approach, supplemented with as many supercenters of the smaller variety as it can gain approval for over the next few years.

What the retailer needs to do for starters is strike up a deal with the mayors and city councils' of the region's three biggest cities - San Jose, San Francisco and Oakland, like its done with Mayor Daley in Chicago, offering to focus on building and opening mostly smaller-format stores in exchange for getting approval for a few bigger supercenters. With municipal budgets in California so stretched, these cities are willing to listen, something they probably wouldn't have done five years ago when the region was booming and city budgets were flush with money.

Once Walmart has achieved a bit of critical mass in the San Francisco/San Jose Bay Area (eg: food and grocery sales market share) it's my analysis that perhaps then an online ordering and home grocery delivery service might make sense for the retailer. But until then, if Walmart tries it now, I don't think it will be anything to write home about.

- The Insider

Read 'The Insider's' past columns here



Work Begins Inside 5800 Third Street Fresh & Easy Neighborhood Market Store in San Francisco's Bayview

Tesco's Fresh & Easy in Northern California - 2011
Breaking Buzz

A construction crew has started work inside the future Fresh & Easy Neighborhood Market store (pictured at top) in the 5800 Third Street condominium development (Third Street and Carroll Avenue) in San Francisco's Bayview District. (See the March 14 story linked below for photographs of the store's interior.)

At present, workers are digging up the cement floor with jackhammers and laying pipe and conduit for the electrical lines. Once the infrastructure work is completed the crew will paint the walls in the Fresh & Easy decor package, install refrigeration and freezer cases, along with the shelving and checkout-stands, and then complete the finishing touches inside the store.

As we reported in this story last month - March 14, 2011: Opening of Fresh & Easy Neighborhood Market Store at 5800 Third Street in San Francisco Held Up Pending Approval of Liquor License - work inside the building (the store's physical address is 5900 Third Street) has been held up pending approval of a liquor license at the location, which Tesco's Fresh & Easy originally planned to open earlier this year as one of its first stores in Northern California. [See -December 14, 2010: Fresh & Easy Neighborhood Market to Open 5800 Third Street 'Flagship' Store in San Francisco Later in 2011 Than Originally Announced.]

The start of work inside the Third Street and Carroll Avenue store signals that approval has come.

To date Fresh & Easy Neighborhood Market has opened seven stores in Northern California.

Four more stores are set to open this month in the cities of Pleasanton (Rosewood Dr. & Santa Rita Rd.; on April 13), Hayward (Mission Blvd. & Rousseau St.), Napa (Imola Ave. & Jefferson St.) and San Jose (all three on April 27).

The San Jose store opening on April 27 is at Saratoga Avenue and Payne Avenue and will be the grocer's second unit in the city.

One of the first two stores Tesco's Fresh & Easy opened in Northern California is the unit at Bird Avenue and Minnesota Avenue in San Jose, which opened March 2. The Fresh & Easy store at Diablo Boulevard and Highway 680 in Danville also opened March 2. [See - January 17, 2011: First Look at the Willow Glen-San Jose Fresh & Easy Neighborhood Market Store Set to Open March 2, 2011 and February 14, 2011: First Look: Fresh & Easy Neighborhood Market Store in Northern California's Danville Set to Open on March 2.]

The Bird and Minnesota store in San Jose is currently the leading sales performer out of the seven Fresh & Easy markets opened so far in Northern California, according to our sources at the grocery chain.

As we've previously reported, after the four stores noted above open this month (making 11 Northern California units so far for Tesco's Fresh & Easy) the next two stores set to open are both in San Francisco - at 32nd Street and Clement in the Richmond District and the store in the 5800 Third Street development, which is at Third Street and Carroll Avenue. [See - February 1, 2011: Tesco's Fresh & Easy Neighborhood Market Still Plans April-May 2011 Openings For First Two San Francisco Stores.]

Based on our current information, Fresh & Easy plans to open the 32nd and Clement store in early-to-mid May.

The grocer also wants to open the Third Street and Carroll Avenue unit next month, if it's completed and ready to go. If not, the store in the 5800 Third Street development will open no later than June, according to our sources.

Fresh & Easy Neighborhood Market hasn't yet announced any additional new store openings beyond the four units opening this month. It will be doing so soon though.

For example, in addition to the two Fresh & Easy stores in San Francisco next up to open, we've also reported that two more units, one store in Antioch and another in Farfield, are next up in the Northern California new store opening rotation. Read the story here - March 15, 2011: San Francisco, Antioch and Fairfield Stores Next Up in Northern California For Fresh & Easy Neighborhood Market. Look for an announcement by the grocer soon on the opening dates of the two stores, along with the two San Francisco units.

Related Stories

[Follow our extensive coverage of Tesco's Fresh & Easy in Northern California - 2011 at (click on) the following links: Fresh and Easy Northern California, Fresh and Easy San Francisco Bay Area, Northern California Market Region, Tesco's Fresh and Easy in Norcal 2011, Northern California Special Report, Northern California, 5800 Third Street.]

UFCW Union, Activists and Employees Hold Pro-Union Rallies at 25 Fresh & Easy Neighborhood Market Stores in California

Tesco's Fresh & Easy and the UFCW Union
News/Analysis

The United Food & Commercial Workers (UFCW) union, organized labor activists, supporters and employees of Fresh & Easy Neighborhood Market yesterday held rallies at 25 Fresh & Easy stores in California, in a show of support for employee organizing at the 171-store Tesco-owned fresh food and grocery chain.

Yesterday was the 43rd anniversary of the assassination of civil rights leader Martin Luther King, Jr. The rallies at the 25 Fresh & Easy stores in California were part of a national day of action in which U.S. labor unions and supporters organized a variety of different events throughout the nation. Organized labor held the day of action on the 43rd anniversary of the death of Dr. King to draw attention to trade unionism in America, particularly in light of the recent battles over collective bargaining going on in Wisconsin and Ohio between those states Governors and unionized public employees.

The UFCW and its various union locals in California deployed hundreds of activists and supporters to the 25 Fresh & Easy markets - 24 stores in Southern California and one grocery market in Northern California - yesterday afternoon, holding rallies in front of each of the stores. The pro-union activists held signs, passed out informational leaflets to shoppers and rallied the troops with speeches given by union officials local elected officials and pro-union Fresh & Easy store workers

One of the Fresh & Easy Neighborhood Market store workers who participated in a rally was Lisa Austin, an employee of the Fresh & Easy store at 1000 W. West Covina Parkway in West Covina, California, and one of the leaders of a company-wide group of employees organizing for union representation at the grocery chain. Austin (pictured above) spoke to a crowd outside the West Covina store yesterday about the employee group's efforts to seek union representation at Fresh & Easy. (Behind Lisa Austin is Connie Leyva, president of UFCW local 1428 in Southern California. Leyva also spoke at the store event.)

Another Fresh & Easy store worker, Carlos Juarez, who works at the Fresh & Easy grocery market in Los Angeles' Glassell Park/Eagle Rock neighborhood and is another leader of the pro-union employee group, said at the rally in front of the store where he works: "We stood together for a voice on the job, and Fresh & Easy said 'No', and judges in two states and the National Labor Relations Board (NRLB) have found that Fresh & Easy broke the law by illegally surveilling, threatening and interrogating workers like me who want to form a union."

What Juarez is referring to in the latter part of his statement above is a recent ruling by the NLRB's board on two labor relations cases filed against Tesco's Fresh & Easy last year by store employees and the UFCW. In the cases, Administrative Law Judges ruled in favor of the employees and the union and against Fresh & Easy on the majority of charges or findings brought against the grocery chain.

We reported on the ruling by the two judges in favor of the employees and the union in these two stories last year - March 4, 2010: Administrative Law Judge Finds Tesco's Fresh & Easy Neighborhood Market Violated Labor Relations Act in Ex-Store Employee, UFCW Union Complaint>June 20, 2010: NLRB Judge Rules Against Fresh & Easy Neighborhood Market in Spring Valley CA Store Labor Law Violation Case.

In the Spring Valley/San Diego store case (June 20, 2010 story linked above) the NLRB's board found on January 31, 2011 that Tesco's Fresh & Easy Neighborhood Market "violated the National Labor Relations Act (NLRA) by promulgating and maintaining rules prohibiting employees from talking about the union and discipline, but not other subjects, while working and by implicitly inviting employees to resign because of their protected concerted activities. The finding upheld the thrust of the decision made on June 3, 2010 by Administrative Law Judge William G. Kocol. You can view the board's January 31, 2011 decision here: (21‑CA‑38882, et al.; 356 NLRB No. 90).

Also on January 31 of this year the NLRB's board adopted the Administrative Law Judge's finding in the Las Vegas case (details in the March 4, 2010 story linked above) that the respondent (Fresh & Easy) "violated the NLRA by maintaining an over-broad no-distribution rule, interrogating employees and creating an impression of surveillance.

The NLRB's board also adopted the dismissal of allegations that two discharges violated the NLRA, finding that the respondent (Fresh & Easy) showed that the two employees would have been discharged for lawful reasons even if they had not engaged in protected activity. This was a ruling the judge made in favor of Fresh & Easy. The board upheld the finding.

The Board did not adopt the judge’s finding that the respondent cured its unlawful, company-wide no-distribution rule in September 2009, and therefore found that corporate-wide remedial notice-posting is necessary with respect to that violation. The judge ruled in favor of Fresh & Easy on this charge. However the NLRB's board overruled the judge in favor of the employee and the UFCW. You can view the board's January 31, 2011 decision here: (28-CA-22520, et al.; 356 NLRB No. 85).

The "voice on the job" that Juarez refers to in the first part of his statement has to do with a group of employees at the Eagle Rock/Glassell Park store who've been attempting so far without success to have a meeting with Fresh & Easy's senior human resources executive and/or CEO Tim Mason to discuss the employees' desire to be represented by the UFCW union, as we reported in a series of stories here in Fresh & Easy Buzz.

Tesco and Fresh & Easy's long-stated position is that if employees want to join the union they should call for an election as is stipulated by the National Labor Relations Act. None of the employees at any of the Fresh & Easy stores, in cooperation with the UFCW, has done so to date.

The Glassell Park employees, who at one time said they had a majority of store workers in favor of joining the union, recently said they have no current plans to call for an election at the store.

Juarez was joined by fellow Glassell Park Fresh & Easy store worker Michael Acuna, who's also a leader of the pro-union employee group, and Rabbi Jonathan Klein, who's with Southern California's Clergy & Laity United for Economic Justice group. Rabbi Klein and Acuna also spoke at the rally outside the store. [The three men are pictured in the photograph above. Left-to-right: Rabbi Klein (in suit), Michael Acuna (in the Fresh & Easy shirt) and Carlos Juarez (far right, black shirt).

Explaining why he was attending the event, Rabbi Klein said: "We want Fresh & Easy to know we don’t care how big you are or how much money you have. In our state, in our country, in our community we respect the rights of workers to organize and we stand with Fresh & Easy workers who want a real voice on the job."

Yesterday's pro-union events at the 24 Fresh & Easy stores in Southern California and the Walnut Creek unit in the San Francisco Bay Area (see the list of the 25 stores at the end of this piece) is the largest single day of store-level activity the UFCW has organized at Tesco's Fresh & Easy Neighborhood Market since the first stores were opened in November 2007, based on our coverage of the chain, which began in late 2007.

Late last year we correctly said the UFCW would be intensifying its campaign targeting Fresh & Easy beginning in early 2011, after moderating it considerably in the last half of 2010.

The union has done just that, launching its "Fix Fresh & Easy" public relations and advertising campaign in the beginning of 2011 and expanding it over the last few months, as we've report on here, along with conducting other types of actions targeting Fresh & Easy Neighborhood Market, which is owned by United Kingdom-based Tesco, the third-largest food and grocery retailer in the world and the UK's market share leader, accounting for a whopping 30% of all food and grocery sales in the nation. Tesco's stores in the UK are unionized.

Additionally, yesterday's rallies at the 25 Fresh & Easy stores marks the beginning of more intense campaigning, organizing and events to come throughout the spring and into the summer, including in Northern California where the grocer has so far this year opened seven stores.

For example, as we reported on March 25 in this story - UFCW Union Local Sets Up Picket Line at Just-Opened Fresh & Easy Neighborhood Market Store in Modesto, California - Northern California local UFCW 8-Golden State has set up an informational picket line at the Fresh & Easy market in Modesto, California which opened on March 23.

Further, another Northern California local, Local 5, is conducting random informational leafleting at a few of the five Northern California Fresh & Easy stores the grocer has opened thus far this year in the San Francisco Bay Area, such as the store in Pacifica. [See - March 9, 2011: Northern California Launch: Tesco's Fresh & Easy Neighborhood Market Opens Store in Pacifica Today.]

The increased activity by the UFCW and the group of pro-unionization Fresh & Easy store-level workers come at about the same time United Kingdom-based Tesco is preparing to report its fiscal year 2010/11 financials, including how much the global retailer lost in the fiscal year at its Fresh & Easy USA chain of 171 stores.

We say loss because Tesco has already said it estimates reporting a loss for Fresh & Easy in the $250-$259 million range for the fiscal year, roughly the same amount it lost in the previously 2009/10 fiscal year, despite having a considerable increase in sales, mostly from new stores opened, for the 2010/11 year, which ended in February.

Tesco has a new CEO, former head of European /Asia operations and information technology chief Philip Clarke, who replaced Terry Leahy, who retired last month. Fresh & Easy's CEO Tim Mason, who was also named Tesco group deputy CEO to Clarke in March, is under the gun to get the money-losing U.S. chain to break-even by the end of Tesco's 2012/13 fiscal year, which is about two years away. Based on Fresh & Easy's current performance and strategy, doing so is going to be a tough slog for Clarke, Mason and company.

The increased efforts by the union to organize store-level workers at Fresh & Easy Neighborhood Market won't make achieving that goal any easier for Tesco, although the El Segundo, California-based grocer's problems go far beyond a union organizing effort by a group of employees and the UFCW.

The UFCW rally outside the Fresh & Easy store at 1631 Highland Avenue in San Bernardino, California drew a large crowd of activits and supporters for union organizing at Tesco's Fresh & Easy.

The union issue is compounded by the fact that the current contract between the UFCW locals in Southern California and the regions unionized grocery chains, which include the four market share-leading grocer's in Southern California - Kroger's Ralphs, Safeway's Vons, Albertsons and Stater Bros - has expired.

The chains and their respective unionized workers are working on a day-to-day basis under the old contract. Either party has the right to terminate the day-to-day arrangement by giving the other party 72-hours notice.

As of today, no progress has been made in negotiations between the UFCW and Ralphs, Vons and Albertsons, which is owned by Supervalu, Inc. Stater Bros. is negotiating with the union separately, as is local chain Gelsons.

In fact, the three chains only submitted their first proposal to the UFCW on March 29. The Southern California union locals have essentially pronounced the proposal, which includes various "givebacks" involving premium-type (holidays, Sundays, ect.) wages and benefits, dead on arrival. Already some of the unions are telling employees that a strike vote may have to be made if progress isn't made in the next couple weeks, for example.

The UFCW is under pressure as part of the contract talks because the unionized chains say they are losing market share to non-union chains like Walmart, Target, Trader Joe's, Whole Foods Market, Sprouts Farmers Market and Fresh & Easy, which is true. As a result, expect to see intensified organizing by the UFCW not only vis-a-vis Tesco's Fresh & Easy but also involving a couple of the other chains noted above.

One of the more aggressive UFCW union local presidents in Southern California is Connie Leyva (pictured above in front of the West Covina Fresh & Easy store and behind store employee Lisa Austin in the earlier photo), who's also the president of the California Labor Federation, the highly politically connected umbrella organization for organized labor in the Golden State.

Governor Jerry Brown is counting on the Federation's support for his budget balancing plan and on other issues, for example.

Additionally, organized labor is also a crucial supporter of Democrats in California, which hold a majority in both the State Assembly and State Senate. Assembly Speaker John Perez is a former official with the UFCW union.

Leyva attended the rally at the West Covina store yesterday and had strong words for Tesco and Fresh & Easy's senior management, saying: "When Dr. King passed away, he was standing up for striking workers in Memphis. We honor his memory today by standing with organizing workers at Fresh & Easy and saying our communities support and honor the right to organize."

For the UFCW union and the pro-union Fresh & Easy store employees however, the bottom line is that until they can hold an win an election at one of the grocer's 171 stores, the probability of becoming unionized is as close to zero as can be had. Tesco has no interest in talking with the UFCW about becoming a union shop, evidenced not only by our source information but by the fact the union has been asking its and Fresh & Easy's senior executives to do so for four years.

We don't see such an election happening at any Fresh & Easy store this year. Therefore the employees' and union's thrust will continue to be through public relations, advertising, picketing and events like the action held yesterday at the 25 stores in California. In other words, don't look for a resolution to the Fresh & Easy-union issue anytime soon.

Union activists and supporters rally outside of the Fresh & Easy store in Spring Valley/San Diego yesterday.

Below are the locations of the 25 Fresh & Easy stores where the rallies took place yesterday:

Alhambra - 2121 W. Main St.
Buena Park - 7880 Valley View St.
Burbank - 1615 W. Verdugo Ave.
Compton - 2175 W. Rosecrans Ave.
Glassell Park/Eagle Rock - 4211 Eagle Rock Blvd.
Fullerton - 1207 S Euclid
Harbor City - 26640 Western Ave, Suite E
Hollywood - 7021 Hollywood Blvd.
Lakewood - 4930 Paramount Blvd.
Lakewood - 5615 Woodruff Ave.
Manhattan Beach - 1700 Rosecrans Ave.
Northridge - 19350 Nordoff St.
Orange - 1803 E Chapman
Paramount - 15727 Downey Ave.
Pico Rivera - 8921 Washington Blvd.
Rancho Cucamonga - 8956 Foothill Blvd.
Rancho Cucamonga - 12188 Foothill Blvd.
Rancho Cucamonga - 829 W Foothill, Upland
Rialto - 2015 N Riverside Ave
San Bernardino - 1631 E Highland Ave
Spring Valley/San Diego - 96655 Campo Rd.
Van Nuys - 15230 Vanowen St.
Vista - 945 E Vista Pkwy
Walnut Creek - 1821 Ygnacio Valley Rd.
West Covina - 1000 W. West Covina Pkwy

Related Stories

[Readers: See our extensive coverage and analysis of the union issue at Tesco's Fresh & Easy Neighborhood Market at (click on) the following links: Fix Fresh and Easy, Fresh and Easy Eagle Rock Blvd. store in Los Angeles, Glassell Park Fresh and Easy, UFCW, UFCW Tesco Fresh and Easy Campaign, UFCW union, union and labor issues.]

Fresh & Easy Neighborhood Market to Launch Reusable Bag Design Contest Tomorrow

Tesco's Fresh & Easy Neighborhood Market will launch its second-annual reusable shopping bag design contest tomorrow, themed to Earth Month (April) and Earth Day 2011, which is on April 22.

This year's Design-A-Bag contest runs From April 5 -to- May 15, 2011.

Fresh & Easy has broadened the contestant universe this year, allowing people 13-years of age or older to enter, compared to last year when contestants had to be age 18 or older. Adults beware: The kids just might show you up this year.

Like with last year's Design-A-Bag contest, this year's designers, inclding those creative 13-17-year old first-timers, can enter the contest by submitting their respective designs online to Fresh & Easy Neighborhood Market here.

Also like last year's reusable bag design contest, which generated 1,300 submissions from customers of Tesco's Fresh & Easy and others, according to the grocer, this year's submissions will be reviewed by a panel of judges chosen by the retailer. The judging panel will choose up to 10 finalists, who's bag designs will be voted on by members of "friends of fresh&easy," which is the grocery chain's e-mail-based communications program that it uses to communicate promotions and other information to consumers who sign up for the service.

Last year, 24,000 members of the "friends of fresh&easy" group voted for the first-place winning bag and the runner-up designs, according to Fresh & Easy Neighborhood Market.

Members of "friends of fresh&easy" will vote on the winners of this year's Design-A-Bag contest beginning on June 21st and through July 10th, 2011.

The grand prize winner in the contest receives $5,000 worth of Fresh & Easy store gift cards. The runners-up each receive a $100 store gift card.

The first-place winner of last year's reusable bag design contest was Los Angeles, California resident Josephine Close, who took home $5,000 in Fresh & Easy Neighborhood Market gift cards, as you can see in the photograph pictured in the story here.

Tesco's Fresh & Easy has been selling her award-winning reusable shopping bag (pictured at top) in its 171 fresh food and grocery stores in California, Nevada and Arizona since the first of the year. Ms. Close's reusable work of art sells for 79-cents per-bag in the stores.

This year's winning design will also be sold in the stores, according to Roberto Munoz, Fresh & Easy Neighborhood Market's director of neighborhood affairs.

Beginning tomorrow through April 22, Fresh & Easy will also be offering shoppers one of its Fresh & Easy canvas shopping bags (at left) for free with purchases of $20 or more in the stores. The bags sell regularly for 99-cents each. Coupons for the bags are available on the grocer's website and Facebook page. Like the Design-A-Bag contest, the reusable bag promotion is part of the grocery chain's Earth Month and Earth Day promotional activities.

Fresh & Easy, which is owned by United Kingdom-based Tesco, offers single-use plastic carrier bags for free in its stores but no paper grocery sacks. It also offers a variety of reusable bag options at different price points, ranging from its "bag for life," a synthetic plastic-like carrier bag which it sells for 20-cents each, to the 99-cent canvas bag, along with a higher-end canvas bag made out of 100% organic material.

Related Stories

January 19, 2010: Customer-Designed Reusable Shopping Bag Now On Sale At Fresh & Easy Neighborhood Market Stores

July 27, 2010: The Winner of Fresh & Easy Neighborhood Market's Reusable Bag Design Contest Is...

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

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

Fresh & Easy Neighborhood Market-Sponsored Pro-Am Golf Tournament Raises $200,000 For Youth Programs

Tesco's Fresh & Easy Neighborhood Market and its partners raised $200,000 for LA’s BEST (an after school program for kids in Los Angeles) and Park Century Schools at the fresh&easy Dinah Shore Charity (LPGA) Pro-Am golf tournament which was held yesterday on the Arnold Palmer course at Mission Hills Country Club in Rancho Mirage, California, according to Tim Mason, CEO of Fresh & Easy and group deputy CEO of United Kingdom-based Tesco.

The inaugural fresh&easy Dinah Shore Pro-Am golf tournament was part of the larger Kraft Nabisco Championship 2011, held at Mission Hills from March 28 -to- today, April 3. The long-running Kraft Nabisco Championship event celebrated its 40th anniversary this year.

Fresh & Easy Neighborhood Market became the name-sponsor of the event after CEO Mason was approached by veteran professional golfer and LPGA member Amy Alcott earlier this year.

"From the moment Amy discussed the concept of this event with me, I could see her desire to put a spotlight on the 40 wonderful years of the players and milestones of the Kraft Nabisco Championship as well as to create an opportunity to help children in some way, our shared passion. To now see the support of these great players – hall of famers, tournament champions, LPGA legends – continues to strengthen our commitment to the event, which also gives us a tremendous opportunity to raise important funds for LA’s BEST and Park Century Schools, two very worthy beneficiaries," Mason said in February about Fresh & Easy's sponsorship of the golf tournament.

Alcott and Mason headed up the organization of the pro-am tournament, which paired LPGA professionals with amateur golfers, including Fresh & Easy's Mason, who reports his team placed third in the event.

The lady-professional golfers participating in yesterday's tournament were, in addition to Alcott: Donna Andrews, Susie Berning, Jane Blalock, Pat Bradley, Donna Caponi, JoAnne Carner, Beth Daniel, Cindy Figg-Currier, Rosie Jones, Betsy King, Meg Mallon, Patricia Meunier-Lebouc, Alice Miller, Liselotte Neumann, Alison Nicholas, Sandra Palmer, Nancy Scranton, Patty Sheehan, Hollis Stacy and Kathy Whitworth, the winningest female golfer of all time.

But the big winners of the golf tournament are the two youth-focused organizations, LA's Best and Park Century School, who will benefit from the monies raised on the links at Mission Hills in sunny Rancho Mirage yesterday.

LA's BEST (Better Educated Students for Tomorrow) is a nationally recognized after school education, enrichment and recreation program. It serves 28,000 children with the greatest needs and fewest resources throughout the City of Los Angeles. The organization's After School Enrichment Program provides a safe haven for children ages 5 to 12 at 180 elementary school sites each day during the critical hours after school, at no cost to parents. Established in 1988, LA's BEST is a partnership between the City of Los Angeles, the Los Angeles Unified School District and the private sector.

Park Century School is a non-profit independent co-educational day school designed to meet the specific educational needs of bright children, ages 7 to 14, who have learning disabilities. The School serves students from communities in the South Bay to the San Fernando Valley and from Malibu to Hancock Park, including the greater Los Angeles area.

Thanks to the Saturday on the greens, the two organizations now have a bit more green to use in support of the kids they serve. Job well done all around.

Related Story

February 16, 2011: Fresh & Easy Neighborhood Market CEO Tim Mason Gets A Major Golf Tournament to Call His Own.

A Natural & Organic Kind of Thing: Finding Love at Whole Foods Market

Whole Foods Market is famous for offering nearly everything under the sun that's natural and organic, from fresh foods and grocery products to beer, wine and clothing made from organic cotton, all with a focus on customer service.

But despite being a foremost expert in hooking up shoppers with all things natural and organic, Whole Foods Market hasn't in the 30-years it's been around been able to figure out how to offer one of the most natural and organic aspects of life - love - in its 304 stores in the United States, Canada and the United Kingdom ... until today.

That's right, today the Austin, Texas-based natural-organic grocery chain is announcing in the must-view video at top that love - a natural and organic process that's a bit harder to explain than organic farming, for example - is now available at Whole Foods Market. And like all things at Whole Foods, finding love is a team effort, even on April Fool's Day.