Brand Extension: Fresh & Easy Neighborhood Market Introduces 'eatwell' Fresh Meat Lines

Private Brand Showcase

Tesco's Fresh & Easy Neighborhood Market has extended its eatwell healthy foods' private brand into the fresh meat category, with the launch of a new line of Chicken Sausages and two value-added meat lines - eatwell Chicken Bake and eatwell Chicken Stir Fry (pictured above and below) - into its 182  fresh food and grocery stores in California, Nevada and Arizona.

The eatwell Chicken Sausages line, which hit some Fresh & Easy stores last week and others this week, based on our regular store visits and conversations with store workers, includes varieties like the Mild Italian and Apple Cinnamon varieties pictured below.

The Chicken Bake items, which include a tray for cooking in the oven, and the eatwell Stir-Fry SKUs come in varieties like the Roasted Red Pepper, Chipotle and Mango and Cajun-Style, pictured at top.

Fresh & Easy Neighborhood Market is currently featuring the eatwell sausages at a 2-for-$7 (16oz pkg.) introductory price. The Chicken Bake and Stir-Fry items, both of which as also 16oz, are being offered at a 2-for-$10 introductory price in the stores.

The extension of the eatwell private brand - Fresh & Easy uses F&E as a co-brand on the items - into the meat and value-added meat categories is part of a major expansion of the brand, which the El Segundo, California based grocery chain began in December 2011.

In January of this year Tesco's Fresh & Easy began launching numerous new eatwell items in the brand's existing categories - fresh-prepared foods/refrigerated, dry grocery and frozen foods. That launch, which includes about 60 new items, continues this month.

In the summer of 2010 Fresh & Easy Neighborhood Market extended its eatwell private brand into the dry grocery category, as we reported in this story -  August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category. Prior to that the brand was only used for fresh-prepared foods.

Up until late last year the grocery chain offered just a few eatwell items in the dry grocery category, such as canned chili and snack crackers.

But beginning in December 2011 and continuing through the present, Fresh & Easy has been launching numerous eatwell dry grocery items, such as: boxed breakfast cereals, instant oatmeal, whole grain and vegetable pasta SKUs, pasta and grill sauces, boxed meal kits (like Macaroni & Cheeseburger; just add meat and prepare), chocolate chip fiber snack bars and some others.

Fresh & Easy also introduced refrigerated tortillas under the eatwell brand in January, a line of frozen dairy desserts, bagged Italian salad kits (produce), a line of refrigerated heat-and-eat soups similar to those if offers under its Fresh & Easy brand, and numerous new fresh-prepared meal items.

The grocery chain also promoted its eatwell healthy foods' brand in January (see the instant oatmeal and cereal endcap display below, for example), offering numerous items at sale prices in its weekly advertising circulars and via its "Friends of Fresh & Easy" e-mail flyer, which it now combines with its "Friends" loyalty/rewards card.

For example, for about three weeks last month Fresh & Easy promoted its eatwell frozen meals, which as we reported here the grocer introduced in September 2010, a month after it extended the healthy foods' private brand into the dry grocery category in August 2010, in its stores, as well as featuring them in the two promotional media vehicles noted above.

As you can see in the photos below, which were taken at a store in Northern California on January 7, 2012 by Fresh & Easy Buzz's senior correspondent, Tesco's Fresh & Easy gave its eatwell brand frozen meals multiple facings and plenty of freezer case space during the January 2012 promotion.

Fresh & Easy Neighborhood Market introduced its eatwell healthy foods' brand in April, 2010, a story we broke here - April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line; and followed up on with this piece the next day - April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7.

Tesco's Fresh & Easy announced the launch of the eatwell brand not long after the publication of our April 1, 2010 story.

By extending its eatwell brand into the meat and value-added meat, the healthy foods private brand is now represented across all consumable food categories at Tesco's Fresh & Easy - dry grocery, frozen foods, perishables- refrigerated, produce, fresh-prepared foods and meat, which is something we reported over a year ago that Fresh & Easy Neighborhood Market would do.

Take a look at this piece we published in February 2011: Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

Also see these additional stories about Fresh & Easy's eatwell brand:

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011

 January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week

August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category

September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category

September 27, 2010: First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week

May 18, 2009: Strategy Session: Tesco's Fresh & Easy Needs to Move From its One Store Brand Fits All Strategy to A 'Three Brand' Store Brand Strategy

April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line

April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7

[Editor's Note: All photographs credit Fresh & Easy Buzz. The eatwell Sausages, Chicken Bake and Stir-Fry photos were taken February 12, 2012. The eatwell grocery endcap display photogrpahs was taken January 9, 2012, The eatwell frozen meal photos were taken January 7, 2012.]

Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

Private Brand Showcase

One of our objectives in Fresh & Easy Buzz, and in our Private Brand Showcase feature, is to bring our readers "fresh" information, analysis and commentary about Tesco's Fresh & Easy Neighborhood Market and other food retailers first, which we often succeed in doing.

Three of those firsts, two stories involving the introductions of new private brands by Tesco's Fresh & Easy and Safeway Stores, Inc., along with a third, which involves our being first ongoing coverage of Fresh & Easy's 'eatwell' healthy foods' brand, recently appeared here in 'Private Brand Showcase.'

'Fresh & Easy Kitchen Gourmet'

For example, on January 21, 2011 we reported in detail on a new private brand, 'Fresh & Easy Kitchen Gourmet,' being introduced by El Segundo, California-based Fresh & Easy Neighborhood Market. Read the story here: Tesco's Fresh & Easy Neighborhood Market Introducing New 'Gourmet' Private Brand.

As we detailed in the January 5 story, the first two lines under the new store brand include an assortment of 'Fresh & Easy Kitchen Gourmet' fresh, refrigerated ready-to-heat meals and two SKUs of refrigerated, ready-to-eat soup

This week, Tesco's Fresh & Easy is officially introducing its newest private brand, featuring both the ready meals and soups in its weekly advertising circular. You can view the ad circular and the 'Fresh & Easy Kitchen Gourmet' sale items here.

This week's ad feature is the first public announcement we've been able to discover by the fresh food and grocery chain about the new store brand.

But Fresh & Easy Buzz readers learned about the new 'Fresh & Easy Kitchen Gourmet' private brand and the first two lines under the brand on January 21, 2011, as the products hit the Fresh & Easy Neighborhood Market stores' shelves.

Fresh & Easy's 'eatwell'

In a series of four 'Private Brand Showcase' stories, from January 4 -to- January 20, 2011, about Fresh & Easy Neighborhood Market's 'eatwell' healthy foods' brand, we noted that the grocer is planning to introduce a number of new items across all three categories - fresh foods, frozen and dry grocery - in early 2011, and again later this year.

[Read the stories - January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'; January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week; January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program; and January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011.]

Tesco's Fresh & Easy by policy doesn't comment on or generally confirm its private brand development efforts or product introduction strategy. For example, Fresh & Easy Buzz was the first publication to report on the development of the 'eatwell' healthy foods brand at Fresh & Easy, along with the introduction of the first items under the store brand, a line of refrigerated ready meals and related items, in these two stories - April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line; and April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7.

The fresh food and grocery chain didn't announce its new 'eatwell' brand until a considerable time after our reports.

We also were the first to report on Fresh & Easy's extension of its 'eatwell' brand into the dry grocery - August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category - and frozen foods categories. [See - September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category and September 27, 2010 - First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week.]

However, confirmation of our January 2011 reports about the planned introduction of a number of new 'eatwell' items has come sooner than we expected, and right from the top at Fresh & Easy Neighborhood Market's corporate buying and merchandising department.

In a rare public appearance - in-person or in print - John Burry, Fresh & Easy Neighborhood Market's chief commercial officer (vice president or director of buying and merchandising in U.S. grocery industry terminology; Fresh & Easy uses the British terminology), said in a brief guest post on the grocer's blog that Fresh & Easy is "working on lots of new and exciting eatwell items for 2011," adding: "I tasted some of them in our development kitchens today."

Burry is one of the original Tesco executives who came across the pond to California with Tesco deputy CEO and Fresh & Easy Neighborhood Market CEO Tim Mason in 2006-2007 to start up the United Kingdom-global retailer's Fresh & Easy chain, which now has 156 stores in California, Nevada and Arizona. During his tenure as the head of Fresh & Easy's corporate buying and merchandising efforts, Burry has seldom spoken out in public, and this is the first time we've seen him take to the blogosphere, where we welcome him as a new blogger, with a post.

By the way, look for the first batch of those "new and exciting" 'eatwell' brand items to start hitting the Fresh & Easy stores soon.

Safeway's 'Open Nature'

In a January 5, 2011 'Private Brand Showcase' story - Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio - we reported that Pleasanton, California-based Safeway Stores, Inc., was introducing a new natural foods brand, "Open Nature," into its stores, starting with a line of fresh poultry and meats.

In our story about Safeway's new natural products brand, we also offered an analysis of how the brand fits within the supermarket chain's healthy foods' private brand portfolio, which prior to the introduction of 'Open Nature,' consisted of two brands in the consumables segment - 'O' Organics' and 'Eat Right.'

Additionally, in our January 5 piece we offered a detailed analysis of the various product attributes Safeway Stores is touting with its 'Open Nature' brand.

Safeway announced its new 'Open Nature' natural foods brand on January 26, 2011, three weeks after we first reported on the development.

In its announcement, Safeway also said it plans to eventually use the 'Open Nature' brand name on more than 100 products. In addition to the fresh poultry and meat categories, the grocer said the other categories will include: bread, yogurt, ice cream, salad dressing, frozen foods and others.

In our January 5 story we said this would be the case. We also included a list of the various categories Safeway received trademark protection under for brand 'Open Nature.'

Additionally, since we published our story, Safeway has rolled out a couple additional items under the brand, which it mentions in January 26 press release announcement. Those items are packaged fresh bacon and hot dogs. Additionally, Safeway has branded some varieties of fresh, packaged Angus Beef and pork under 'Open Nature.' (See here.)

In the announcement, Safeway Stores, Inc. also tied its new natural foods brand into its other two health and wellness-oriented consumables brands, 'O' Organics' and 'Eating Right,' which is something we did in our January 5, 2011 piece, offering an analysis of the private brand synergies Safeway Stores, Inc. is trying to create between the three brands - one being organic ('O' Organics'), the other a "healthy foods" brand ('Eating Right'), and the newest private brand, 'Open Nature,' a natural foods brand. From a branding standpoint, each fits into a classical model of category differentiation within the larger health and wellness brand segment.

Here's what Safeway's senior vice president of consumer brands, Joe Ennen, said in the grocery chain's January 26, 2011 press release:

"Open Nature is a great addition to Safeway's portfolio of health and wellness brands joining O Organics and Eating Right. It's another demonstration of Safeway's commitment to providing our customers the best possible experience when they prepare and eat meals for themselves and their families. Open Nature is Safeway's way of providing shoppers access to simple, flavorful food made from all-natural ingredients that is as close to nature as possible."

[You can read Safeway's January 26, 2011 press release here. Also read our January 5, 2011 story: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio.]

In conjunction with introducing its new 'Open Nature' natural foods' brand on January 26, Safeway has also set up a special page on its website devoted to the brand, which you can view here. The page introduces the new brand and offers information about it.

Based on information we recently received from a Safeway Stores, Inc. source, the grocery chain plans to aggressively roll-out new 'Open Nature' brand lines and items throughout this year. The first batch of new items under the private brand are set to hit Safeway stores at the end of this month or in early March, according to the source, who's in a position to know the roll-out schedule.

Private brand strategy - Safeway Stores

With the introduction of its 'Open Nature' brand (natural foods), Safeway Stores has now nicely and strategically divided its health and wellness private brand portfolio into three brands, each offering key attributes and price points to shoppers.

The primary attribute and focus of the chain's 'O' Organics' brand, which now has about $1 billion in annual sales, is just as the name suggests - organic ingredients. And, along with being organic, the brand's focus is on being "healthy."

Safeway's 'Eating Right' brand, which has sales of about $700 million annually, is positioned as a non-organic, and not specifically "nature" but healthy foods' brand.

The Pleasanton, California-based chain, which is the fourth-largest seller of food and groceries in the U.S., offers products across all consumables categories under the two brands.

'Open Nature' fits in between the two brands as Safeway's natural products private brand. Like O' Organics" and 'Eating Right' it's part of the healthy foods' brand trifecta. But unlike O' Organics, products under the brand aren't comprised of organic ingredients. But all of the ingredients in the items branded "Open Nature" are "natural," as defined by Safeway. (See our January 5, 2011 store and the Safeway links above for details.) Not all of the 'Eating Right' brand items have "natural" ingredients, however.

In terms of everyday price points, "O' Organics" items tend to be the highest priced, with "Eating Right" products being lower at the shelf. Based on our analysis, 'Open Nature' looks to fit in between the two - the brands' everyday prices on similar items will be lower then "O' Organics, and slightly lower or about the same price as the similar 'Eating Right' items.

Private brand strategy - Tesco's Fresh & Easy

In a May 18, 2009 story - Strategy Session: Tesco's Fresh & Easy Needs to Move From its One Store Brand Fits All Strategy to A 'Three Brand' Store Brand Strategy - about Fresh & Easy Neighborhood Market's private brand development, we suggested the retailer should create a new brand for its natural and organic foods items, which then and currently are branded under its flagship 'fresh&easy' store brand.

Since our piece was published, Tesco's Fresh & Easy has created two new brands - 'eatwell' and 'fresh&easy goodness,' which is more correctly a co-brand since it uses fresh & easy as part of the brand name, but has continued to use 'fresh&easy' for its organic and natural foods consumable products, despite the fact the grocer uses that same brand for all of its conventional food and grocery items, along with using 'fresh&easy' on fresh produce (organic and non-organic) and fresh meats.

As we suggested in 2009 - and suggest here again today - doing so is a branding mistake in our analysis because using 'fresh&easy' as a brand for both conventional, organic and natural foods products allows for zero differentiation between, for example, a 'fresh&easy' packaged food item containing items grown with the use of pesticides compared to an identical (say a rice dinner mix) or similar 'fresh&easy' items that contains all organic ingredients.

Additionally, but to a lessor degree than with organic, there are various attributes that distinguish a product as being "natural," although unlike "organic" there aren't U.S. government regulations on the books guiding the use of the term, using the 'fresh&easy' brand name on "natural" products also fails to allow for brand differentiation between the conventional items and those that fall into the natural foods category.

Therefore, from a private brand perspective, it's our analysis that Tesco's Fresh & Easy is missing a good opportunity to improve sales of natural and organic foods items in its stores because it continues to use the same brand - 'fresh&easy' - on products in the two respective "healthier foods'" categories as it does on all the conventional consumable products it offers in its stores. About 60-65% of all the SKUs in Fresh & Easy stores are under the grocer's private brands. The remaining percentage, of what's about 4,500-5,000 SKUs offered in the markets, are national and regional manufacturers' brands - Coke, Pepsi, Heinz, Kraft, ect.

The metaphorical cart in the private brand aisle

Fresh & Easy followed Safeway's introduction of its 'Eating Right' healthy foods brand, which was introduced in 2008, with its own similar brand - 'eatwell,' which the Tesco-owned chain introduced in 2010.

Were we calling the shots at Fresh & Easy when it comes to private brand development, we would follow a similar path in the natural and organic categories, but instead of two brands - 'O' Organics and 'Open Nature' - we would take all of the current 'fresh&easy' brand items that fall in the organic and natural foods categories, along with all future items, and put them under a new brand at Fresh & Easy Neighborhood Market. The new private brand would be used exclusively for all consumable items in the organic and natural foods categories at Tesco's Fresh & Easy Neighborhood Market.

Note to Our Readers - You Can Play Too

[Readers, feel free to help Fresh & Easy Neighborhood Market out by offering suggested names for what would become the grocer's new organic and natural foods private brand. 'O Organics' and 'Open Nature' are both already taken. So you can't go there. The brand name Wild Oats,' which we talked about in our May 2009 piece, was sold by Whole Foods Market last year to a Southern California-based private brand food company. So you can't go there either.

But you shouldn't let those three taken names restrict you. Just click on the "comments" link below. Then leave your suggested name for the hypothetical organic and natural products brand. There is one restriction: You can't use 'fresh&easy' as part of your suggested brand name.]

Recent 'Private Brand Showcase' Stories

January 21, 2011: Tesco's Fresh & Easy Neighborhood Market Introducing New 'Gourmet' Private Brand

January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week

January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011

January 5, 2011: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

Additionally, Click on this link - private brand showcase - for a selection of past 'Private Brand Showcase' stories.

Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week

Private Brand Showcase
Private brand in-store merchandising & promotion

Tesco's Fresh & Easy Neighborhood Market doesn't merely want shoppers to "eat well" this week. It wants them to do so by buying, loading their home freezers with, and eating multiple packages of its 'eatwell' private brand frozen meals, which the grocer is promoting and displaying in end-cap, coffin-case freezer displays in all 156 of its Fresh & Easy markets in California, Nevada and Arizona this week.

As you can see in the photographs above and below, the freezer case displays feature large point-of-purchase signs touting the 'eatwell' frozen meals and the $1.49 unit promotional price point.

Fresh & Easy Neighborhood Market, which is owned by United Kingdom-based Tesco, has been promoting its 'eatwell' brand aggressively since the first week of January. Such healthy foods' brand and item promotions are a common theme for grocers at the start of a new year. Think of the promotions as a "new year, get healthy" type of hook for food retailers, which taps into consumers' resolutions and other goals, which often includes eating more healthy foods.

This month, the grocer also introduced a number of new items under its 'eatwell' brand, which includes products in the fresh-prepared foods, dry grocery and frozen categories, as we reported and wrote about recently in these two stories - January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011 and January 4, 2011 Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell.'

Fresh & Easy Buzz was the first publication to report Fresh & Easy Neighborhood Market was extending its 'eatwell' private brand into the dry grocery and frozen food categories, from fresh-prepared foods, last year. [See - August 2010 piece - August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category. Also - September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category and September 27, 2010 - First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week.]

Tesco's Fresh & Easy is focusing big on 'eatwell' frozen for January and into February. Along with the large and colorful in-store displays, the grocery chain is advertising the 'eatwell' frozen meals this week in its weekly advertising circular, for $1.49 each. The $1.49 promotional price began on January 12 and runs until February 11, 2011. The items sell for $1.99 regularly. [See - January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program.]

The conclusion to the big 'eatwell' frozen case in-store displays and advertised promotion: Tesco's Fresh & Easy Neighborhood Market obviously doesn't merely want shoppers to "eat well" - it wants them to buy, stock their freezers with and eat lots of 'eatwell' private brand frozen meals.
[The photos at top were taken this week by a Fresh & Easy Buzz correspondent.]

Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

Private brands & grocery merchandising
News/Analysis

Tesco-owned Fresh & Easy Neighborhood Market today launched a new everyday low-price-oriented merchandising program in its 156 stores in California, Nevada and Arizona, in which it's guaranteeing the shelf prices on a selected number of its private brand items for an extended period of time. Fresh & Easy is calling the shelf prices on the selected group of items: "extra low every day."

Among the first batch of products included in the program include: 'fresh&easy' apple juice, in a 64 ounce bottle ($1.99); a multi-pack of 'f'resh&easy' brand bone-in loin pork chops ($1.99 pound); a multi-pack of 'fresh&easy' chicken breasts (1.99 pound); and assorted varieties of 'fresh&easy' packaged pasta (99 cents each).

Additional private brand items in the new everyday low-price-oriented program include various varieties of fresh&easy brand packaged cheese, ice cream, pre-packaged fresh lettuce items, and bagged vegetable steamers.

The shelf prices on the first batch of private brand items in the new everyday low-price-oriented merchandising program, which have shelf signs featuring the item price and the words "every day" below it, are guaranteed for about two months - from today -to- March 22, 2011. After March 22 Fresh & Easy reserves the right to raise the prices on the products, although it may or may not do so.

Based on our research, the shelf prices on the items listed above with the "extra low everyday low-prices" listed are the same as they were before Tesco's Fresh & Easy launched the program this week. That's not to say the price points are good or bad. Rather, its to say the price points on those specific items weren't lowered from what the shelf prices were a few weeks ago. The pasta price of 99 cents a unit everyday is excellent, for example. On the other hand, a number of the other items are about the same as what nearly all of Fresh & Easy's competitors offer on their respective private brands of the same variety.

The key proposition in the new merchandising program though, in our analysis, is the "price guarantee," in which the grocer is pledging not to raise the "extra low every day" shelf prices on the selected items for a given period of time.

EDLP, high-low, or both?

At first blush Fresh & Easy's new everyday low-price-oriented (EDLP) merchandising program looks like a move by the grocer to become more of an EDLP operator, rather than the hybrid EDLP/high-low grocer it currently is.

However, that's not the case. In addition to launching the merchandising program in the stores this week, Fresh & Easy Neighborhood Market also distributed a spate of its deep-discount store coupons today, which included a $6-off purchases of $30 (20%-off) or more coupon online and a $5-off purchases of $2o (25%-off) or more in its direct-mailed paper advertising circular.

The grocer also continues to distribute an online and direct-mailed weekly promotional circular, which features various items at reduced prices for a one week period of time.

The deep-discount store coupons, which can be used by shoppers on any of the retailer's private brands or manufacturer brands offered in the Fresh & Easy markets - the coupon amount is taken off customers' total grocery order purchase - is a promotional device and therefore part of high-low food and grocery retailing philosophy and practice - particularly because Fresh & Easy uses the coupons regularly - rather than a merchandising philosophy normally associated with EDLP grocers.

Many high-low retailers, such as Walmart and WinCo Foods, to name two that operate in the same markets as Tesco's Fresh & Easy Neighborhood Market does, use promotional mailers, coupons and other promo devices occasionally, but not on a regular basis like Fresh & Easy does. These retailers focus primarily on everyday low shelf pricing, using promotions at times as a device to stimulate customer draw and sales.

Fresh & Easy, on the other hand, is what we call a mixed or hybrid EDLP/high-low operator because the grocer uses the EDLP philosophy and practice and the high-low promotional variant equally in its stores.

It is our analysis though that Fresh & Easy Neighborhood Market CEO Tim Mason and his senior executive team, at least conceptually, have launched the "extra low every day low prices" merchandising program in the hope if it's successful down the road it could allow the grocer to stop distributing its deep-discount store coupons on a regular basis, as it has been doing chronically since 2008.

The 20% and 25%-off coupons take a big bite out of the fresh food and grocery chain's overall margin, which currently is in the cellar, at a negative-38%. Mason and company must get this margin up significantly, say at least in the low plus-twenty percentile, in order to have a chance of ever making a profit with Fresh & Easy, in our analysis.

Tesco has set the end of its 2012/13 fiscal year, a little over two years from now, to break-even with Fresh & Easy Neighborhood Market. Tesco lost $151 million on Fresh & Easy in the first half of its current fiscal year - 2010/11. The current fiscal year is over at the end of February 2011.

Significantly reducing the frequency of, or eliminating completely, the deep-discount store coupons will be a tough slog for Fresh & Easy though because, by using them so regularly, the chain has created a perception among shoppers that the vouchers, and the 20%-25% discount (if used to buy the minimum dollar purchase required) they offer, is a normal part of the grocer's pricing policy. In other words, a perception exists among customers, in our observation and analysis, that without the coupons the prices at the Fresh & Easy stores are too high.

The evidence of this phenomenon is two fold: When in the past Fresh & Easy tried to not use the store coupons for a couple months in 2009, sales in the stores dropped, and customers complained about the lack of coupons to the grocer in huge numbers, many saying that without the coupons they were not shopping in the stores or buying much less when they did shop at Fresh & Easy.

The retailer responded to these twin developments in 2009 by resuming regular distribution of the discount coupons, something its continued on a regular basis ever since, including this month.

Extra-low - everyday

Obviously it's too early to offer an analysis on the efficacy of Fresh & Easy Neighborhood Market's new everyday low-price-oriented merchandising program, since it is just starting. However, we can see pitfalls with the program, as well as some potential positive opportunities.

Overall though, it's our analysis right now that the program isn't going to have any material benefit on Fresh & Easy's sales. Even more important - and obvious - it will do nothing directly to help increase the grocery chain's gross margin.

The program could over time possibly help create a better overall customer price perception of Fresh & Easy. However, a true picture of how the stores can do will not come until the grocer stops - and perhaps it never will - using the deep-discount store coupons on a chronic basis.

For example, Fresh & Easy seldom lets more than two or three days pass between the expiration date of a batch of coupons and the distribution of a new batch. A good test would be to issue the coupons for just one week out of each month. Then we could see how the stores do for the other three weeks out of the month when the coupons offering 20%-25%-off shoppers' total grocery purchases aren't available.

We don't see this happening though. Why: Because it's our analysis that without the regular distribution of the coupons as described above, sales at the Fresh & Easy stores would drop substantially, despite the fact the everyday prices in the stores are decent, and despite the fact the chain distributes a decent promotional circular each week.

It's not too early to offer this, however: What we call the "Fresh & Easy coupon conundrum"and the associated issues described above is something incoming Tesco CEO Philip Clarke, who takes over the corner office at Tesco's corporate headquarters in the United Kingdom in early March, should be very concerned about.

Related Stories

Click on the following links - corporate merchandising, deep discount coupons, grocery merchandising, private brand showcase, promotional merchandising, store discount coupons, Fresh and Easy promotional-ad flyer, Fresh and Easy $6-off store coupon - to view a selection of related stories in Fresh & Easy Buzz.

Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011

Private Brand Showcase
If it's about 'eatwell' - you read it here first

In September 2010 Fresh & Easy Buzz reported that Tesco's Fresh & Easy Neighborhood Market would be introducing a number of new ready-to-eat and ready-to-heat fresh-prepared foods SKUs, and a couple items in other categories, under its 'eatwell' healthy foods brand, in January 2011. [See - September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category and September 27, 2010 - First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week.]

Fresh and Easy Neighborhood Market is doing just that.

Additionally, in this piece - January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell' - on Tuesday, we reported that some of those new items were set to be introduced this week.

They are.

Further, we said in the story on Tuesday that Fresh & Easy Neighborhood Market would feature the 'eatwell' brand, along with many of the new items in the line, in its weekly advertising circular, which came out a day later, on Wednesday, January 6.

The items are in the weekly ad, which started yesterday.

The ('eatwell') 411

Today, Tesco's Fresh & Easy Neighborhood Market announced the introduction of 11 new 'eatwell' brand items for 2011 - 10 fresh, refrigerated ready-to-eat or ready-to-eat SKUs and one Caesar salad dressing. The new 'eatwell' fresh-prepared foods items include: salads, wraps, soups, pasta dishes and meals. You can view a listing of the 11 new items here.

Additionally, although it's not mentioned in the press release, Fresh & Easy Neighborhood Market has extended its 'eatwell' brand SKU-count in the shelf-stable dry grocery category, adding a new item, 'eatwell' veggie crackers, to its existing two items in the line, canned turkey and vegetarian chili.

The veggie cracker (in a 7 ounce box) SKU is the first of what Fresh & Easy plans to be a line of snack crackers, and most-likely eventually other self-stable snacks, according to our sources, under its 'eatwell' healthy foods' brand.

Brand ('eatwell') extensions

Fresh & Easy Buzz was the first publication to report that the fresh food and grocery chain, which has 155 stores in California, Nevada and Arizona, had extended its 'eatwell' brand into the dry grocery category. We did so in this August 2010 piece - August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category.

We were also first to report Tesco's Fresh & Easy extended brand 'eatwell' into the frozen foods category. (See the two September 2010 stories linked in the first paragraph of this piece at top.)

In our story on Tuesday (January 4), we said Fresh & Easy Neighborhood Market would be featuring its 'eatwell' healthy foods' brand, including the frozen meals and many of the new items, in its weekly advertising circular, which broke on January 5 and runs until January 11.

The grocer has done just that. You can view the 'eatwell' feature in Fresh & Easy's current weekly ad here.

More ('eatwell') to come

We've said since we first broke the news in April 2010 about the development and launching of the 'eatwell' brand by Tesco's Fresh & Easy Neighborhood Market, which it started out using for fresh-prepared foods only, that it was the grocer's plan to make its "healthy foods" private brand, and extend it into numerous additional categories, which so far include dry grocery and frozen foods, in addition to fresh-prepared foods.

That process will continue, along with the development of new 'eatwell' items in the fresh-prepared foods, shelf-stable dry grocery, frozen foods and refrigerated foods categories.

Stay tuned.

Recent stories in 'Private Brand Showcase'

January 5, 2011: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

Click here to read a selection of stories from 'Private Brand Showcase' in 2010. See the headline links at the end of the post.

Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

Private Brand Showcase

In August 2010 we reported that Tesco's Fresh & Easy Neighborhood Market had extended its 'eatwell' healthy foods private brand into the dry grocery category, from an initial launch of the brand in the fresh-prepared foods category earlier in the year, by creating a canned turkey chili item. [See - August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category

We followed that exclusive report up a month later in early September with a story - September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category - detailing how Tesco's Fresh & Easy planned to further extend the 'eatwell' brand into the frozen foods category. And in this piece a couple weeks later - September 27, 2010 - First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week - we documented our September 10 report.

Today, many months later, Tesco's Fresh & Easy Neighborhood Market is formally announcing and promoting the new 'eatwell' canned turkey chili and its "new" line of 'eatwell' frozen meals, in its "Friends of Fresh & Easy" e-mail newsletter, which you can view here. The e-mail promotional piece went out today to members of "Friends of Fresh & Easy."

In the promotional piece, pictured at top, Tesco's Fresh & Easy says: "We expanded our eatwell line to make eating better even better. So you'll now find more ready meals, salads, sandwiches, and soups, along with all-new items like snacks and frozen meals. Each eatwell item is made with 25% or less of the daily recommended value of calories, total and saturated fat, and sodium.* Best of all, they're just as affordable as they are delicious."

The frozen meals line and canned turkey chili in the promotional piece are the items Fresh & Easy Buzz reported on five months ago.

Some of the new 'eatwell' brand fresh-prepared foods items in today's 'Friends of Fresh & Easy" promotional piece were introduced late last year. However, most of the refrigerated ready-tp-eat and ready-to-heat items are brand new, being introduced for the first time this week. Fresh & Easy Buzz was the first publication to report on Fresh & Easy Neighborhood Market's plans to launch the 'eatwell' brand last year. [See - April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line and April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7.]

In our September 2010 stories about the extension of the 'eatwell' brand into the frozen foods category, we noted that Fresh & Easy Neighborhood Market planned to introduce additional fresh-prepared foods items under the healthy foods' brand in early 2011. The ready-to-eat and ready-to-heat items mentioned above are the first of those new items for the new year.

Fresh & Easy is also working on additional 'eatwell' brand items in the dry grocery and frozen foods category, according to our sources, including shelf-stable snacks and potentially condiments and dressings.

Additionally, the grocer is considering extending its 'eatwell' private brand into perishable foods other than ready-to-eat and ready-to-heat and frozen. Such items could include refrigerated dairy, salad dressing and similar items.

As we've noted in past stories, Fresh & Easy's brand strategy behind 'eatwell' is to make it a multi-category healthy foods' brand similar to what Safeway Stores has done with its 'Eating Right" brand, which Safeway uses across all product categories, including dry grocery, perishables, prepared foods/deli, produce and fresh meat.

Apparently, Fresh & Easy wasn't ready to announce or promote the 'eatwell' frozen food line last year - instead saving it perhaps for the beginning of the new year so it could use it as a "Healthy New Year" promotional hook, which is exactly what it's doing with the "Friends of Fresh & Easy' promotional mailer today. Additionally, as a heads up, look for many of the 'eatwell' healthy foods items to be in Fresh & Easy's new weekly advertising circular, the first one for 2011, which comes out tomorrow.

Readers of Fresh & Easy Buzz, didn't have to wait until now though, or until they visited a Fresh & Easy market, to learn about the 'eatwell' brand dry grocery and frozen category brand extensions because we reported the news, along with providing analysis and added information, in August and September of 2010. We call that "private brand intelligence."

[Private Brand Showcase is a regular feature of Fresh & Easy Buzz. In it we report on, write about and offer analysis and commentary on the fast-growing private or retailer brand (sometimes called private label) movement, along with featuring various private brand products being offered by Tesco's Fresh & Easy Neighborhood Market and other food and grocery retailers. This is our first 'Private Brand Showcase' piece for 2011. Below is a selection of 2010 stories.]

December 23, 2010: New Items Show Fresh & Easy Neighborhood Market's Niche-Specialty Category Private Brand Development Focus

December 21, 2010: New 'Marketside' Brand Fresh Food Items From Walmart - Part Deux

December 18, 2010: Walmart Launches New 'Marketside' Fresh Food Lines - Plus A 'Fresh' Campaign to Create Brand Buzz

December 13, 2010: House (Sparking) Cider Rules at Fresh & Easy Neighborhood Market

October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line

October 16, 2010: Fresh & Easy Neighborhood Market 'Bags' the Humble and Nutritious Plantain For A New Snack Chip Item

October 16, 2010: Fresh & Easy Neighborhood Market's Private Brand Kids' Cereal Wins Bronze 'Pentaward' in 2010 Packaging Design Competition

October 9, 2010: 'Use Me': Should Reusable Packaging Be Part of Tesco's Sustainable Private Brand Offering? A Student-Designer Thinks So

September 27, 2010: First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week

September 4, 2010: Fresh & Easy Neighborhood Market Unveils New fresh&easy 'goodness' Brand Items and Packaging

August 29, 2010: Fresh & Easy Neighborhood Market Expanding its fresh&easy 'goodness' Co-Branded Line; Launching Numerous New Items

August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category

July 21, 2010: 'Sipsational' & 'Quenchtastic': Safeway Introduces New 21-Flavor Line of Soft Drinks Under 'refreshe' Private Brand

July 17, 2010: New Fresh & Easy Neighborhood Market Clock-Shaped Private Brand Candy Line Hits the Shelves at Fresh & Easy

July 12, 2010: Tesco Launches Private Brand 'Lasagne Sandwich' in the UK Today...With No Apologies to The Earl of Sandwich

June 24, 2010: New Fresh & Easy Clock Logo-Shaped Candies Are A Pretty Sweet Idea

May 11, 2010: Tesco Might Want to Get 'fresh & naked' at 'fresh & easy'

April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7

April 11, 2010: When it Comes to Fresh, Prepared Foods, New York City's Duane Reade is Simply 'deLish' for Walgreens

February 22, 2010: Food, Drug Retailers With Stores in California, Nevada & Arizona Honored for Private Label-Store Brands' Excellence