Tesco Developing New Flavors For 'ChokaBlok' Ice Cream Brand; Launching Range in Central Europe

Breaking Buzz
Private Brand Showcase

[Definition of ChokaBlok (normal spelling is chockablock or chock-a-block): Squeezed together; jammed; packed or crowded; completely filled or stuffed.]

United Kingdom-based global retailer Tesco is in the process of developing a number of new flavors for its recently launched ChokaBlok premium ice cream brand, Fresh & Easy Buzz has learned.

The development of the new ice cream flavors, which we're told number four-to-five SKUs, are being headed up by the frozen food buying and merchandising (commercial in British industry terminology) department at Tesco's corporate headquarters in the UK.

ChokaBlok on the move

Additionally, according to our sources, Tesco this week is launching its ChokaBlok ice cream venture brand in its stores in Central Europe. It will be Tesco's first global division outside the UK to get the premium ice cream brand, which currently comes in five flavors - Cherry Bomb Brownie, Cookie Dough Mon-Star, Gold Digger Dynamite, Billionaires Shortcake and The Chocolate Extremist.

Tesco's venture brands are a new strategy for the retailer, in which it's creating numerous product brands with standalone names, rather than using the Tesco name as it does for its traditional private or store brands, although the Tesco name (in small font) can be used as a secondary part of a venture brand's name.

So far this year the retailer has introduced five of what it plans to be numerous venture brands. The brands are: Yoo (refrigerated yogurt); ChokaBlok (premium ice cream); Lathams (premium pet food); Nutricat (premium pet food) and Parioli (pasta, pasta sauces and canned tomatoes imported from Italy.)

In addition, as we were the first publication to report on last month, Tesco has also introduced two new private brands in its UK stores so far this year - Tesco goodness for kids and Tesco Flash in the Pan.

The "goodness" brand, which was developed by Tesco's Fresh & Easy Neighborhood Market chain in Southern California, is a multi-category range (line in U.S. industry terminology) of food products targeted to kids.

The first items introduced under the brand were a line of packaged, value-added fresh produce items, as we reported here - June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist; and here - June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores.

We were the first to report the connection between Tesco's new Tesco goodness for kids brand and its development at Fresh & Easy in Southern California. Fresh & Easy Neighborhood Market calls its brand fresh&easy goodness for kids.

Since our June 26 story was published, a number of mainstream publications in the UK have written about the Fresh & Easy connection we revealed. We haven't found one of those stories yet though that's credited Fresh & Easy Buzz with breaking the news the Tesco "goodness" brand was developed by Fresh & Easy.

Tesco has since June 26 announced its "goodness" brand and has been launching additional items in its new kids' range in its UK stores, including the ready meals we reported on in the June 26 story linked above, along with a variety of food and drink items in the shelf-stable grocery (such as juices and snack items) and refrigerated perishables (such as cheese snacks) categories.

The retailer says it plans to introduce about 70 SKUs in its Tesco goodness for kids brand in its UK stores this year.

We also were the first publication to report on Tesco's recent launch of its new "Flash in the Pan" private brand, which so far features six SKUs of refrigerated ready-meals. See our stories here - July 6, 2011: Tesco Launches New 'Flash in the Pan' Brand Ready Meals in UK Stores; Files Brand Trademark in U.S.; and July 7, 2011 Not Just A 'Flash in the Pan': Tesco's New Brand of the Same Name With Potential 'Fresh & Easy Twist' Hitting United Kingdom Store Shelves.

Chok-full of new flavors, premium ingredients

According to source in a good position to know about both the initial launch of ChokaBlok and the development of the new flavors, Tesco's senior executives in charge of the venture brand program are pleased with the initial customer reception to the new premium ice cream brand, which has led to the frozen food department's getting the green light to develop additional flavors, which Tesco hopes to introduce in its UK stores before the summer is out in order to take advantage of the excitement it's building around the brand, along with being able to take advantage of the key summer ice cream selling season.

The Chockablok ice cream brand, which Tesco is marketing and promoting as an affordable luxury product (think Häagen-Dazs brand ice cream), features free-range eggs and premium ingredients including: whole milk; double cream; and a real chocolate in the varieties that include it. In fact, the brand name "ChokaBlok" is designed to depict just that ingredient focus, its tagline being: "A luxurious range of ice creams, chok full of mouth-watering goodies that you'll love."

Interestingly and ironically, we offered Tesco's ChokaBlok ice cream product development team a new item suggestion, which uses the existing (and any future) flavors to create a product in the ice cream novelty category, in our June 26, 2011 story. Since the team is in development mode, reported first in Fresh & Easy Buzz today, they - and you - might want to take a look at our story [Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist] and see just what that new product suggestion is.

Here's a hint, playing on Tesco's marketing tagline for its ChokaBlock ice cream noted above: "A luxurious range of  frozen treats featuring ChokaBlok ice cream sandwiched between fresh-baked chocolate, vanilla and oatmeal cookies for a bite-sized mouth-watering treat that you'll love."

Line extensions from ice cream to frozen novelties are a natural in the premium ice cream category after all, as Häagen-Dazs, Magnum, Dove and others have demonstrated with their very successful premium ice cream treats, all which contain their first-introduced packaged ice cream flavors.

Related Stories

July 7, 2011: Not Just A 'Flash in the Pan': Tesco's

July 6, 201: Tesco Launches New 'Flash in the Pan' Brand Ready Meals in UK Stores; Files Brand Trademark in U.S.

June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist

June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores

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

Also: Click on this link - private brand showcase - for additional related stories.

Fresh & Easy Neighborhood Market (Selectively) Bullish on Commercial Real Estate In California

News/Analysis

Tesco's El Segundo, California-based Fresh & Easy Neighborhood Market may be struggling to stem what appear to be its no-end-in-site losses - around $900 million so far since November 2007 and about $300 million in Tesco's latest fiscal year ended February 26, 2011. But that's not stopping it - instead perhaps it's encouraging  it - from being bullish on commercial real estate in selected parts of California.

Fresh & Easy Neighborhood Market, which Tesco set up as an independent U.S.-based corporation when it launched the food and grocery retailing venture in Southern California in 2006, has closed on two major commercial real estate purchases in Southern California over the last four-to-five weeks, including its biggest deal we're aware of to date.

That deal: This week Tesco's Fresh & Easy Neighborhood Market closed on a $7-million purchase of 21815 Hawthorne Boulevard in Torrance, California, where the grocery chain plans to turn a 10,720-square-foot vacant building on what is a 1.69 acre parcel into one of it small-format fresh food and grocery stores. The now vacant building previously housed a CoCo's family-style restaurant.

Fresh & Easy Neighborhood Market bought 21815 Hawthorne Boulevard from the Kinoshita Family Trust, according to Woodspear Properties, the commercial real estate firm that represented the seller, and Highland Partners, which represented Tesco's Fresh & Easy in the deal.

The $7 million purchase comes on the heels of another multi-million dollar commercial real estate deal Tesco's Fresh & Easy closed on the second week of June, which is the $2.1-million purchase of a 1.12 acre parcel in the Central Coast California city of San Luis Obispo, where the grocery chain plans to build and open its first Fresh & Easy food and grocery market in the city.

According to our sources, Fresh & Easy Neighborhood Market is currently planning an early 2012 opening for its first store in the coastal city, which is home to one of the largest, most popular and top-ranked California State University campuses, Cal Poly San Luis Obispo.

Fresh & Easy Neighborhood Market bought the parcel in San Luis Obispo from Halfterty Development Company.

According to Stephen Leider and Clarice Clarke, who head up Lee & Associates' Central Coast offices in California, the parcel Fresh & Easy bought is one of three the real estate firm is marketing at the Village at Broad Street development in the city's popular downtown area . The three-parcel development is set to include a mix of residential housing and retail, they said.

The San Luis Obispo store will mark an important geographical milestone for Tesco's Fresh & Easy in its coastal route march from Southern California to Northern California, which is one of the two south-to-north paths it's taking as part of its strategy to have stores throughout the Golden State.

The other is the inland or valley route, which goes from Southern California, over the Grapevine and into the Central Valley - where there are 14 Fresh & Easy stores in the Bakersfield and Fresno regions and one unit about 100 miles north (of Fresno) in Modesto so far - and on into Northern California's Bay Area - where there are currently 12 Fresh & Easy stores - and eventually into the Sacramento region and other parts of the northern portion of the Golden State

The San Luis Obispo store will mark the nearly midway point in the coastal route between Southern California and coastal Northern California. The closest store in that south-to-north coastal route march so far is a recently opened Fresh & Easy market in Santa Maria, which is about 50 miles from San Luis Obispo on the south Central Coast.

Fresh & Easy has a future store location in Seaside on the Northern California coast and is currently negotiating with the landlord of a vacant roller rink in next door Monterey for another location in the region.

Seaside and Monterey are at the northern end of that south-to-north coastal route march, which follows the Pacific Ocean and offers some of the most scenic views in the U.S.

Fresh & Easy Neighborhood Market owns a few of its 176 stores, although the majority of the units are leased.

For example, it owns its store in Pacifica, California, which opened on March 9 of this year.

Fresh & Easy also owns the store in the 5800 Third Street development in San Francisco's Bayview district, which is set to open August 24, along with not-yet-opened Northern California store locations in the East Bay Area cities of Antioch (at Lone Tree & Golf Course) and Vallejo (two units), as well as a few other future store sites in the Golden State.

Fresh & Easy bought both future store locations in Vallejo, at Oakwood Avenue & Springs Road and Tennessee and Tuolumne, about a year ago after getting what its real estate chief thought was a good price due to commercial real estate values having dropped significantly in the city as a result of the recession and housing crisis. Vallejo has been one of the Northern California cities hardest hit by the recession. In fact, a couple years ago the City of Vallejo filed for bankruptcy, making it one of the first municipalities in the U.S. to do so.

The grocery chain paid about $1.5 million for the about 1.2-acre Oakwood Avenue location and a little over $1 million for the Tennessee and Tuolumne site, which is a vacant about 14,000 square-foot building that once housed a Grocery Outlet store.

Fresh & Easy's strategy is to purchase rather than lease selected parcels in places with historically solid commercial real estate appreciation, such as the San Francisco Bay Area, coastal California (north, south and central) and certain other regions in the state.

The strategy is a continuation of what Tesco has been doing for many years at home in the United Kingdom, which is to purchase selected properties its stores sit on, hold the properties for a given period of time and after they've reached a certain level of appreciation, bundle a set number of the properties into a portfolio and sell them, taking multi-year lease backs on the stores. Tesco then uses the proceeds from these sales to finance existing store remodels and new store construction. It's worked well for the retailer in the UK over the years.

The global retailer plans to do the same thing with the properties it's been selectively acquiring in the U.S. since about 2008 through its Fresh & Easy Neighborhood Market. Most if not all of the properties it's bought are either stores in California or parcels for future store development, like Torrance and San Luis Obispo in the Golden State.

Fresh & Easy Neighborhood Market operates a fairly large real estate department out of its El Segundo, California headquarters, particularly for a chain of 176 stores located in just three states with annual sales of about $800 million, which is currently the case for the Tesco-owned grocer.

Tesco's Fresh & Easy operates over a dozen real estate regions in California, Nevada and Arizona. Each region has a real estate director who is employed by the grocery chain. The real estate directors each work with a commercial real estate brokerage firm in each region, which it has named as its broker of record. For example, Pacific Retail Partners is Fresh & Easy's broker in the two real estate regions it has in Los Angeles.

Although the commercial real estate slump that hit the U.S. - and California, Nevada and Arizona, the three states Fresh & Easy operates in, particularly hard - most of the regions in California where it has bought properties have historically strong long-term appreciation levels, although the slump that still continues will result in Fresh & Easy Neighborhood Market getting far less of a return over a ten year period than it would have had it bought and sold the properties in the 1990's, for example.

However, the Bay Area and coastal locations remain excellent long-term commercial real estate investments, unless the last century of commercial real estate history in the state is proven wrong.

Meanwhile, Tesco's Fresh & Easy Neighborhood Market has a commercial real estate problem of its own, in our analysis. That problem is the grocery chain is sitting on, based on our research and calculations, about 60 sites it either owns or holds leases on (the vast majority being leased) that it hasn't yet opened and 13 locations - six each in metro Las Vegas, Nevada and metro Phoenix, Arizona and one in Southern California that it closed in November 2010 - it's paying monthly rent on (in most cases) but generating zero sales from.

Many of these locations, including about 30 (a few have been opened this year) in Northern California, were acquired by Fresh & Easy in late 2007-early-2008, which means in most of these cases it's been paying monthly rent on what are mostly vacant buildings it plans to turn into stores for going on four years. Many of the other units are early-to-mid-2009 acquisitions as well.

Having so many future locations it's making lease payments on is a major financial drag on Tesco's Fresh & Easy Neighborhood Market.

Tesco plans to open many of these Fresh & Easy stores between now and the end of 2012. Tesco says it will have 300 Fresh & Easy stores open by February 2013. There are currently 176 units, which means opening 124 new stores between now and then.

But there are also a number of Fresh & Easy units - particularly in metro Las Vegas and Phoenix but also in Southern California's Inland Empire region and the Central Valley - Tesco hasn't decided if it will open or not. Because Fresh & Easy has long term leases on these sites, coupled with the continued commercial real estate slump in California, Nevada and Arizona, it's basically stuck with the locations regardless if it opens those stores or not.

As a result, until it opens or disposes of these numerous non-producing store sites, their existence will continue to be a financial drag on Fresh & Easy Neighborhood Market and Tesco, in our analysis.

Related Stories

July 5, 2011: Fresh & Easy Neighborhood Market Preparing For A Spate of New Store Openings Beginning in August

May 18, 2011: Major Changes Coming to Tesco's Fresh & Easy Neighborhood Market Stores

January 14, 2011: Tesco 'Banking' on California in 2011 For Fresh & Easy Neighborhood Market USA

November 4, 2010: Fresh & Easy Neighborhood Market Confirms Our October Reports On 10 New Stores Opening in Early 2011

May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California

April 19, 2011: Tesco's Fresh & Easy Neighborhood Market Posts Biggest One-Year Loss Yet - $307 Million Loss on Sales of $818 Million

February 19, 2008: Tesco's Fresh & Easy Serving as an Economic Stimulus Package of Sorts for California's Troubled Commercial Retail Real Estate Industry

[Also: Click on the following links - new store development, California, Fresh and Easy and commercial real estate, Fresh and Easy Northern California, Fresh and Easy Southern California, new store development, Tesco Fresh and Easy California March - for more related stories.]

Not Just A 'Flash in the Pan': Tesco's New Brand of the Same Name With Potential 'Fresh & Easy Twist' Hitting United Kingdom Store Shelves

Private Brand Showcase

Yesterday we reported Tesco is launching a new brand - "Tesco Flash in the Pan - in its United Kingdom stores.

The first range (line in U.S. food retailing terminology) of items in the product brand are six SKUs of refrigerated ready-meals that take just five minutes to prepare on the stove top.

As we detailed in our story yesterday, Tesco's new brand may become much more than a one nation (UK) "flash in the pan," since the global retailer, which owns 176-store (California, Nevada and Arizona) Fresh & Easy Neighborhood Market, has registered with the U.S. Federal Government for a trademark for the brand name "Flash in the Pan."

You can read all the details about the brand launch in the UK and about the trademark registration in the U.S. below on the blog or here - July 6, 2011: Tesco Launches New 'Flash in the Pan' Brand Ready Meals in UK Stores; Files Brand Trademark in U.S. Also see the related June 26 and 27, 2011 stories linked at the end.

The "Tesco Flash in the Pan" ready meals are hitting the shelves in Tesco's United Kingdom stores this week, as we reported in our July 6 story.

As we noted yesterday, the brand and product introduction started as a soft launch, but according to our source, who's in a good position to know, the retailer is now slotting the new brand and items in all its stores, starting today. It's probably, the source says, that "Flash in the Pan" could be in the refrigerated, fresh-prepared foods cases in all of Tesco's UK stores by the end of this week.

The photograph above of the six SKUs of ready-meals was taken by a United Kingdom-based Fresh & Easy Buzz correspondent today at a Tesco Extra format store, proving neither the new brand from Tesco or our story yesterday are merely a "flash in the pan."

Related Stories

July 6, 201: Tesco Launches New 'Flash in the Pan' Brand Ready Meals in UK Stores; Files Brand Trademark in U.S.

June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist

June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores

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

Also: Click on this link - private brand showcase - for additional related stories.

Tesco Launches New 'Flash in the Pan' Brand Ready Meals in UK Stores; Files Brand Trademark in U.S.

Breaking Buzz
Private Brand Showcase

Tesco is introducing a new brand of fresh, refrigerated heat-and-eat (pan fry or saute) meals called "Tesco Flash in the Pan" in its United Kingdom stores this week, as part of its aggressive new private and venture brand program, which has seen the retailer so far this year launch at least seven new private and venture brands into its UK stores.

The "Tesco Flash in the Plan" introduction this week is a soft launch, according to one of our sources, who's in a position to know about the introduction of the new brand, which means the items might not be slotted in all the stores this week.

The soft launch is also why in part you're reading about the new brand for the first time in Fresh & Easy Buzz. Tesco hasn't announced "Flash in the Pan" publicly via a press release. Our story is based on our research and reporting.

The new "Tesco Flash in the Pan" brand consists of six SKUs and come in a colorful, stand up-style cello-package, as you can see in the photograph at top.

The convenience-style, refrigerated ready meals, which say on the packages are influenced from a culinary perspective by Asian flavors, African spices, American soul (as in soul food) cooking and European delicacy, take five minutes to heat in a pan on the stove top and serve one person per-package.

The six SKUs are:

>Potato gnocchi with mushrooms, sundried tomatoes, mozzarella and fresh spinach, served with a basil oil dressing.

>Succulent chicken and king prawns with vegetables, and fresh coriander, served with noodles and a chili sauce.

>Succulent North Atlantic king prawns with cherry tomatoes, roasted onion and fresh spinach, served with coriander rice and a curry sauce.

>Marinated chicken with roasted vegetables and fresh coriander, served with cous cous and a tomato sauce.

>Tender pulled beef with peas, Feta cheese and fresh spinach, served with a tomato dressing and potato & cheese hash.

>Pulled ham hock and fresh cabbage served with crushed potatoes and a farmhouse cheddar sauce. (at top)

"Tesco Flash in the Pan" isn't technically one of Tesco's new venture brands (although it can be), which are a number of new product brands the retailer is developing and launching but not using the "Tesco" name on as part of the brand name.

However, the new brand - like its new "Tesco goodness for kids" private brand which was developed by its Fresh & Easy Neighborhood Market chain in California - uses the Tesco name in small font, putting the emphasise on the "Flash in the an" brand name, just like it does with "goodness for kids." Fresh & Easy's Neighborhood Market calls its (original) version "fresh&easy goodness for kids."

Therefore, "Flash in the Pan" can be used by one of the United Kingdom-based global retailer's non Tesco-named chains, such as Fresh & Easy, because like "goodness for kids" the Tesco or Fresh & Easy name mention on the packaging is interchangeable, since the primary brand name is "Flash in the Pan," while the name of the particular chain is secondary or not even needed.

'Flash in the Pan' U.S. trademark

In fact, Tesco is considering doing just that - launching "Flash in the Pan" in its 176-store (California, Nevada, Arizona) Fresh & Easy chain.

On April 21, 2011 Tesco applied for a U.S. federal trademark for the brand name "Flash in the Pan," which it owns in the UK.

The U.S. trademark registration is good for consumables in the following classes or categories: products made of fish, meat, poultry and game; preserved, dried and cooked fruits, vegetables and fungi; nut products for use as food or as ingredients in food; cooked and preserved dishes mainly consisting of meat, fish, vegetables, legumes and also containing potatoes; ready meals; ready prepared meals; pickles; pulses; food pastes; food pastes prepared wholly or principally from fish, meat, poultry, game, nuts, vegetables, fruit and dairy products; herbs; eggs; milk and milk products; pudding.

We've seen and reviewed the trademark application, which the U.S. federal governments trademark office has given the serial number 85301257.

Tesco and its Fresh & Easy Neighborhood Market chain are currently considering launching a line of ready meals similar to Tesco's under the "Flash in the Pan" brand name, most likely including "fresh&easy" as part of the brand name - "fresh&easy Flash in the Pan" - the U.S. stores, according to our sources.

Doing this would square the circle in terms of Tesco's recent launch of its "Tesco goodness for kids" brand and range," which originated at Fresh & Easy in the states and was recently introduced ino the retailers stores in the UK.

We broke the news about the "Tesco goodness for kids" brand and the Fresh & Easy connection - although a  story about the brand and its origin in the July 2 issue of the Times of London failed to mention Fresh & Easy Buzz as the originator of the news - in these two stories - June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist; and June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores.

Additionally, we suggested in-depth in the June 26 story that having imported its first product brand to the UK from its Fresh & Easy chain in America, Tesco should return the favor and export a UK brand to El Segundo, California-based Fresh & Easy. In the piece we suggested Tesco's new venture brand, "ChokaBlok" ice-cream, would be a good candidate, among others.

Tesco's reason for seeking a trademark in the U.S. for the "Flesh in the Pan" brand name is for just that reason, so if it decides to do so it can offering "Flash in the Pan," (and the products can be but don't have to be ready meals exclusively) in its Fresh & Easy stores in California, Nevada and Arizona.

What's in a name: Venture brands and private brands

So far this year the United Kingdom-based retailer, which owns 176-store El Segundo, California-based Fresh & Easy Neighborhood Market, has introduced five of what will be many of of its venture brands. The brands are: Yoo (refrigerated yogurt); ChokaBlok (premium ice cream); Lathams (premium pet food); and Nutricat (premium pet food).

Bryan Roberts of Kantar Retail in the United Kingdom was the first person we're aware of to have identified the first batch of food and non-food venture brands planned by Tesco, based on trademark applications the retailer filed in the UK. Those brands are: Yoo (yogurt); ChokaBlok (premium ice cream) Halo (sanitary protection); Lathams, Nutridog and Nutricat (petcare); Muse (confectionery); KX and Joocie (drinks); Gut Feeling (health/natural foods); Trumpet and Parade (household paper products) Parioli (Italian food & drink) Streetwise (consumer electronics); and Emmi, R3V5/REVZ and Carousel (toys).

Tesco registered and was granted trademarks in multiple countries for these brands and others, although that doesn't mean it will create and launch products under all of the venture brands it's registered.

Tesco CEO Philip Clarke announced the global retailer's new private and venture brand strategy and increased efforts shortly after taking over as CEO from Terry Leahy, who retired after 14 years as head of the company, in March of this year, as point six of what Clarke and Tesco are calling Tesco's seven-point strategy.

Those seven points are: (1) To grow the UK core; (2) To be an outstanding international retailer in stores and online; (3) To be as strong in everything we sell as we are in food; (4) To grow retail services in all our markets; (5) To put our responsibilities to the communities we serve at the heart of what we do; (6) To be a creator of highly valued brands; and (7) To build our team so that we create more value.

About the product brand strategy (point number six) Clarke said in Tesco's annual report this year: "Tesco is going to be a creator of highly valued brands. I want each of our facia brands to be a valued brand, but I also think we can create some other ones. F&F, the clothing brand, Technika, the television brand, and others will give customers another reason to come and shop with us, another reason to be loyal to us."

The "other brands" he's referring to are what Tesco is calling the venture brands. These brands generally don't and won't have the name "Tesco" on them, although they can.

But it's really semantic folly to try to differentiate "venture" brands from private brands. For example, Trader Joe's, Safeway Stores, Wegmans and numerous other food and grocery chains in the U.S. have own brands that don't have the chain's name on them. They are brands that just happen to be created by a retailer and generally, but not always, sold exclusively in its stores. Most of these retailers also offer private brands with chain's name on them.

Wholesalers and retailer-owned cooperatives in the U.S. also offer "brands" - cooperative Topco's numerous brands and the "Western Family" brand offered by wholesalers in the Western U.S are two good examples - to their independent grocer customers and members that don't have a retailer name on them. This tradition got its start as early as the 1950's in the U.S.

In fact, Tesco's venture brands strategy is very much modeled after what Pleasanton, California Safeway's Stores, Inc. has been doing for a number of years with it brands that don't feature "Safeway" on the label, such as its popular "O Organics" (organic foods) and "Eating Right" (healthy foods) brands; its new "Open Nature" (natural foods) brand; and others like its "Refresh" (carbonated beverages) and "Snack Artist" (chips and snack items) brands.

Safeway also markets its "O Organics" and "Eating Right" brands to other retailers, both in the U.S. and abroad, which is something Tesco is thinking about doing with some of its venture brands.

The etymology of 'Flash in the Pan'

Tesco's choice of "Flash in the Pan" as the name of its new brand of refrigerated ready meals is an interesting one from an etymological standpoint because the common definition of the phrase or idiom isn't one you would particularly want associated with a new food product brand.

The definition of "he (she) or it's a "flash in the pan" (and it can be worded slightly different depending on the dictionary) is: "Someone or something which disappoints by failing to deliver anything of value, despite a showy beginning."

For example: Football player Clive Burnberry is a "flash in a pan." Or: The new retail chain that got so much hype turned out to be a "flash in the pan."

The phrase "flash in the pan" is believed by experts to have originated in the 17th century. Flintlock muskets used at the time had small pans to hold charges of gunpowder. An attempt to fire the musket in which the gunpowder flared up without a bullet being fired was called a 'flash in the pan'.

The competing theory is the phrase "flash in the pan" originated much later, in California in the 19th Century during the Gold Rush. Prospectors who panned for gold in California's Mother Load Country are said to have became excited when they saw something glint in the pan, only to have their hopes dashed when it proved not to be gold but instead was a mere "flash in the pan." This material was also called "fools gold" by the minors.

Proponents of this origin thesis of "flash in the pan" say it ties in with another similar and related phrase, which is: "It didn't pan out." Gold prospectors used the phrase "pan out" regularly, such as saying spending a day mining 100 cubic foot of rocks might only "pan out" to $20 in gold.

Both phrases, flash in the pan" and "it didn't pan out" are terms of disappointment.

Tesco obviously is hoping consumers will define the "Flash in the Pan" brand name in their minds in a more literal sense.

Perhaps "flash," for example, standing for the mere five minutes (heating time) it takes for the ready meals to go from the refrigerator to the table. In other words "ready in a flash." Convenience. And the pan perhaps depicting the cooking vessel in which the convenient "Flash in the Pan" meals are prepared.

A tag line using such logic might go something like this: "Our "Flash in the Pan" ready meals go from your fridge, to a pan, and on to your kitchen table in just five minutes."

We don't dislike the "Flash in the Pan" name. It has a nice ring to it in  many ways. But we do wonder if Tesco realized what the common definition of "flash in the pan" is, and if it research-tested the brand name in any independent and significant way with consumers. Our sources don't know that answer.

After all, statistics show that majority of new food brands launched by consumer packaged goods companies into grocery stores don't make it. Retailers do better with their own brands because they own the stores and the shelves. But "brands" - manufacturer, retailer or venture - do need to stand on their own. And the last thing we think Tesco wants with its new Tesco Flash in the Pan" brand is for it to be a  ... "flash in the pan."

Related Stories

June 26, 2011: Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist

June 27, 2011: Tesco Introduces First Items in Fresh & Easy Neighborhood Market-Developed 'Tesco goodness for kids' Brand in United Kingdom Stores

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

Also: Click on this link - private brand showcase - for additional related stories.

Fresh & Easy Neighborhood Market Preparing For A Spate of New Store Openings Beginning in August

The next Fresh & Easy store to open is (above) at 3rd and Carroll in San Francisco. [Photo credit: Fresh & Easy Buzz.]

Breaking Buzz: New Stores

Fresh & Easy Neighborhood Market has to date announced it will open one store in August - its second unit in San Francisco - which is in the 5800 Third Street condominium development at 3rd Street and Carroll Avenue in the city's Bayview District.

However, the 176-store Tesco-owned grocery chain is queuing up a number of stores for openings in August and the following months, Fresh & Easy Buzz has learned.

We broke the news in this May 14, 2011 story [Breaking Buzz: Fresh & Easy Neighborhood Market Plans August 24 Opening For Third & Carroll Store in San Francisco's Bayview District] that Tesco's Fresh & Easy planned to open the new store at 3rd Street and Carroll Avenue in San Francisco on August 24. [Also see - May 10, 2011: Breaking Buzz: Fresh & Easy Neighborhood Market Plans to Open First San Francisco Store at 32nd and Clement June 22.]

Two weeks later, on May 23, Fresh & Easy Neighborhood Market confirmed our report by announcing in a press release it would open its first store in San Francisco - at 32nd Avenue and Clement Street in the Outer Richmond District - June 22, and its second unit, the 3rd Street and Carroll Avenue store, August 24, just as we reported in the May 10 story.

[See - May 23, 2011: Fresh & Easy Neighborhood Market Confirms Our Reports First Two San Francisco Stores to Open June 22 and August 24, 2011. Also read - June 22, 2011: Tesco's Fresh & Easy Neighborhood Market Opens First Store in San Francisco - in Outer Richmond District.]

Fresh & Easy Neighborhood Market doesn't normally announce store opening dates until three-to-four weeks prior to the given date of the opening. However, sources at the grocery chain tell us since we reported the opening date of the 3rd Street and Carroll store in early May, the retailer decided in part based on that to announce the date, along with the June 22 store opening, even though it was more than three months in advance of the August 24 opening, because it was receiving numerous inquiries, asking if the date we reported was correct.

In addition to the 3rd Street and Carroll Avenue store's August 24 opening date, we reported earlier this year Fresh & Easy is queuing up three additional stores, all in Northern California, for openings soon.

Those three stores are in the cities of Hayward, Antioch and Fairfield. You can read the details and get the addresses of the stores in the two stories linked here - March 15, 2011: San Francisco, Antioch and Fairfield Stores Next Up in Northern California For Fresh & Easy Neighborhood Market; and May 15, 2011: Breaking Buzz: Tesco's Fresh & Easy Neighborhood Market Plans to Open Second Store in Hayward, California August 10.

In addition to correctly reporting the planned August 24, 2011 opening of the 3rd Street and Carroll Avenue Fresh & Easy store in San Francisco's Bayview neighborhood on May 10 (as well as the June 22 opening of the Outer Richmond District store), we reported in the May 15 story linked above that the Hayward store, located at A Street and Hesperian Boulevard, will open August 10.

The store will be the grocer's second unit in the East Bay Area city. Tesco opened its first Fresh & Easy store in Hayward - at Mission Boulevard and Rousseau Street - April 27, 2011.[See - April 27, 2011: Tesco's Fresh & Easy Neighborhood Market at 175 (Stores): Three New Stores Open in Northern California Today.]

We (and you) should know in a couple weeks or so if our reporting on the Hayward store's opening date is correct because if it is opening August 10, Fresh & Easy Neighborhood Market will announce it 3-4 weeks in advance.

We stand behind the reported date. But as we always say in the blog, new store opening dates are fluid and dynamic at Tesco's Fresh & Easy. Therefore, the dates are always subject to change, as has been the case since the first units were opened in November 2007.

In addition to the San Francisco and Hayward stores opening in August - currently we're looking for August-to-October opening dates for the Fairfield and Antioch units - Fresh & Easy Neighborhood Market is now preparing a fifth store in Northern California for an opening in the coming months. That store is at Tasmine Drive and Fair Oaks Avenue in Sunnyvale, making five units in Northern California at the top of the upcoming new store opening list at Tesco's Fresh & Easy.

Southern California

Fresh & Easy Neighborhood Market is also queuing up four stores in Southern California for the next round of openings, which will start in August.

The locations of the stores in Southern California next up are:

City/Address

>Anaheim - Euclid and Broadway

>Long Beach - Long Beach Boulevard and 5th Street

>Long Beach - Atlantic Avenue and 33rd Street

>Los Angeles - Coldwater Canyon Avenue and Sherman

This makes nine new Fresh & Easy stores set to open soon in California, based on our reporting to date. Fresh & Easy has so far only announced the opening date (August 24) of the store at 3rd Street and Carroll Avenue in San Francisco.

Fresh & Easy Buzz is the first and only publication that's reported these stores are next up to open.

Tesco said in April it plans to open about 50 Fresh & Easy stores this year, confirming our reports far in advance of that date, in which we said it would open 40-50 Fresh & Easy fresh food and grocery markets this year. [See our April 19, 2011 report here for details.]

So far this year Tesco has opened 22 Fresh & Easy stores - 12 in Northern California and 10 in Southern California. That leaves 28 Fresh & Easy units to be opened from August through December to hit the 50-store mark.

No Fresh & Easy stores are being opened this month.

One store, the unit at 32nd and Clement in San Francisco, was opened in June.

The 22 Fresh  Easy stores were opened between January and April of this year.

No new stores were opened in May.

We correctly reported in late 2010 and early 2011 that California would be the focus of Tesco's new store openings for 2011. It has been the case so far this year - and it will be for the remainder of 2011. For example, read this January 14, 2011 story: Tesco 'Banking' on California in 2011 For Fresh & Easy Neighborhood Market USA.

Tesco currently has 176 Fresh & Easy stores in California, Nevada and Arizona.

The stores are about 10,000 square-feet and offer about 5,000 SKUs of fresh foods - produce, meats, fresh-prepared foods - packaged food and grocery items, perishables, frozen foods, wine and beer (and liquor in some stores) and a limited selection of health and personal care and general merchandise products.

Of the 176 stores, 127 units are in California. There are 101 stores in Southern California, 12 units in Northern California, and seven stores respectively in the Bakersfield and Fresno metro regions in the Central Valley.

Additionally Tesco has 28 stores in metropolitan Phoenix, Arizona and 21 units in metro Las Vegas, Nevada.

Fresh & Easy Neighborhood Market hasn't opened any new stores in Arizona this year.

No new units in either state are set open this month. Thus far, based on our reporting, no new Fresh & Easy store openings are planned in Arizona and Nevada for August either.

In fact, Tesco closed six under-performing stores in Nevada and in Arizona in November 2010, along with one unit in Southern California, giving it 12 fewer stores in the two states combined than it had nine months ago. [See here.]

A Few Thoughts and Words About America's Independent Grocers on Independence Day

Retail excitement: Jim Bonaminio's Jungle Jim's International Market (above) in Fairfield, Ohio offers 150,000 SKUs from over 75 countries in its 300,000 square-feet - plus a whole lot more, which you can see here.

The Insider - Heard on the Street

[Read the full text of the Declaration of Independence here.]

Were it not for a group of independent-minded American colonists, who on July 4, 1776 decided they'd had enough of the monarch's dictates from an ocean away and published the Declaration of Independence, drafted by Thomas Jefferson, we wouldn't be watching parades, grilling hot dogs and burgers, and enjoying firework displays today, on Independence Day in the USA.

In fact, were it not for the drafting of the Declaration of Independence, led by Thomas Jefferson, and the bloody war against the British King's army fought by a rather independent and ragtag band of men from America's 13 colonies, there wouldn't be an America as we've come to know it to celebrate on the 4th of July.

It's impossible to know what the country called America, comprised of 50 states and about 310 million people, would have been without that bold and radical decision to gain independence.

But it's without a doubt to me it wouldn't be the United States of America, which has been shaped and is driven by independent thought and entrepreneurial spirit, even with all the setbacks over the last decade, we've come to know today. And setbacks they are. The independent spirit in America will rise again. It's in the nation's DNA, after all.

And it's worth noting today on Independence Day that there's a direct connection between the America shaped by the Declaration of Independence and the nation's history and tradition of independent grocers.

For example, if you scratch deep enough, most of today's leading food and grocery retailing chains in the United States got there start as independents, founded by individuals or families.

For example, there's Walmart, founded by Sam Walton. Sam didn't start out focusing on selling food and groceries. But it was during his watch were the stage was set for Walmart to become the leading grocer in the U.S., which it is today.

Additionally, most of what comprises Kroger Co. and Supervalu, Inc. - including Ralphs' Supermarkets in Southern California and Fred Meyer in the Pacific Northwest, to name two independent chains Kroger acquired - and Albertsons, which was founded in Idaho by Joe Albertson and today makes-up a major part of Supervalu, Inc., were started by entrepreneurs.

What today is Safeway Stores, can also be traced back to an independent chain. And over the years Safeway's growth has come from buying privately-held regional independent chains rather than via organic growth - Vons in Southern California, Genardi's, Carrs in Alaska, Dominick's and others.

In fact, the three leading supermarket chains in the U.S., Kroger Co, Supervalu, Inc. and Safeway Stores, have all basically become what they are today by cobbling together through acquisitions over the years a bunch of  independently-owned regional grocery chains. The whole today is Kroger, Safeway and Supervalu respectively. But the parts are acquired independent supermarket chains (and in Supervalu's case a wholesaler).

The declaration of independent grocers

The present and future are far more interesting than the past when it comes to independent grocers in America though.

Independent grocers are best defined not by number of stores or annual sales but rather by ownership status, meaning independents are either solely or majority owned by individuals, partnerships, employees or, as most often is the case in the U.S., by families. Chains owned by investment firms generally aren't considered independents, although there can be exceptions to that rule, such as when investors owned a minority interest.

America's most innovative grocers also tend to be independents. Southern, California-based iconic grocer Trader Joe's is an independent, for example, owned by a German trust established for the children of owner Theo Albrecht of Aldi fame.

These innovators and leaders cover the independent grocer universe in the U.S.

For example, there are the big guys, like H-E-B in Texas (about $15 billion in annual sales),Wegmans on the east coast (about $12 billion annually), Save Mart in Northern California (about $5 million) and numerous others.

There are the medium-sized independent chains in the supermarket and natural-organic foods retailing sector. Two fast-growing independents in the latter category that are pushing the one billion-dollar-a-year range, for example, are North Carolina-based Earth Fare and Colorado-based Natural Grocers.

And there are smaller multi and single-store independents of all types of format, from discount to specialty. Stew Leonard's on the east coast (four stores and estimated annual sales of nearly $500 million), Mollie Stones (nine stores) in the San Francisco Bay Area and Fairfield, Ohio's Jungle Jim's Internatonal Market (single store) are three good examples in this class. There are so many in fact, there's no way to even skim the surface f what's out there in this column.

Regardless of their respective annual sales, type of retail format or store-count, America's successful independent grocers all share a few commonalities: they remain anchored in the communities they serve, they continue to learn (continuous improvement, never stop innovating, fear not the mega-publicly-held chains and love what they do.

There are tens of thousands of independent grocery stores in the U.S. The IGA banner alone has nearly 2,000 independent members, for example. And over 1,200 independent grocery retailers are members of the National Grocer's Association (NGA), the trade group representing America's independents of all shapes, sizes and formats.

Along with independent hypermarkets, super stores, supermarkets and smaller-format neighborhood grocery stores, mom and pop grocers continue to flourish in places like New York City and San Francisco, as do independently-owned ethnic grocery stores large and small stores in cities like the two mentioned above, along with Los Angeles, Miami, Chicago and others, along with in small town America..

The big, publicly-owned mass merchandisers and supermarket chains have made it difficult for America's independent grocers. But despite what appears to be an overwhelming force - just like declaring independence from Britain appeared to many, but not the drafters, at the time to be overwhelming - the independent grocer sector continues to thrive in the U.S.

Long may they run

And like the drafters of the declaration did when they sought independence from the King and his forces and sources of power, successful independent grocers like those mentioned earlier, along with too many others to name, succeed not by taking on the big public chains head on, but rather by using flanking strategies that differentiate their stores.

Some of these strategies and move include developing and implementing superior customer service - Stew Leonard's famed customer service credo, which the grocer walks as well as talks - and coming up with merchandising innovations - independents were offering ready-to-heat and eat fresh, prepared foods long before the first chain even though about it, for example, and were the first "green" grocers, both in the fresh produce innovations and environmental sustainability definitions of the word.

The United States of America, create by the Declaration of Independence and spilled blood on the battlefield, also led to what has been America's greatest strength - opening the country to the world's immigrants.

This unique aspect of America is also directly responsible for much of what is today's independent grocer segment.

The first wave of post-World War II immigration led to European immigrants from Italy, Greece and elsewhere starting grocery stores in America. Many took that single store and built it into a big chain. For example, Modesto California-based Save Mart Supermarkets was founded as a single store in the 1950's by two Italian Americans, Mike Piccinini and Nick Tocco. Today Save Mart, which is majority owned and run by Mike Piccinini's son Bob, has 240 stores and about $5 billion in annual sales.

Others turned the single store into 50, 30, 20 units, while still others created two, three or five-store operations, while many remained with a single store and did extremely well. Size and dollars generated annually is only one measure of success in the grocery business, as it is in life in general.

Asian immigrants to the U.S. also went (and continue to do so into the grocery business (both post word War II immigration waves and post Vietnam wave) in droves, as have immigrants from the Middle East, and most recently, Latin and Central America.

For example, America's growing Latino and Hispanic population has led to a boom in independent grocery stores and chains being operated by first, second and third generation entrepreneurs of Hispanic decent, in states ranging from California, Oregon, Washington, Nevada, Arizona, New Mexico and Colorado in the west; Iowa and Illinois in the Midwest; to the ubiquitous independently-owned Bodegas in New York City and Miami.

America's independent grocers will continue to survive and even thrive as long as they continue to declare their independence from the big, publicly-held chains, instead doing what they do best, feet planted firmly in the communities they serve, always learning and continuing to innovate, be it in format, product offerings or services, or in all the above.

Happy Independence Day.

Tesco Shareholders Meet: Board Says Yes to Pay Plan, No to Investigation of Fresh & Easy Neighborhood Market; Pig Farmers Say it's Impossible to Bring Home the Bacon

News/Analysis/Commentary
Tesco's 2011 Annual General Meeting (AGM)

Tesco's annual shareholders' meeting today in Nottingham, England UK, home of the Sheriff of Nottingham of literature fame, went off with precision - and with the exception of a couple interesting diversions was nearly as placid as the countryside surrounding the Midlands' city where it was held.

First up, Tesco's shareholders approved the global retailer's new Remuneration Plan, or pay package for senior executives who also serve on its board, by a whopping 97.2%. In contrast, at last year's annual meeting, 47% of shareholders voted against the Remuneration Plan for 2010.

What a difference a year - and a new pay scheme - makes.

In this story on Wednesday - June 29, 2011: Union-Affiliated CtW Investment Group Calls For 'Objective and 'Independent' Review Of Tesco's Fresh & Easy Neighborhood Market - we said Tesco shareholders - which really means the big institutional investors because that's where most of the votes are - would pass the global retailer's Remuneration Report, approving the new senior executive/board director compensation plan by a healthy majority, although even we were surprised by the whopping 97.2% in favor vote.

In June, Tesco unveiled the new pay plan for its senior executives who also sit on the board, as a way to try to put an end to what many shareholders and others have argued over the years is the controversial way in which the United Kingdom-headquartered global retailer compensates and rewards the executive directors.

The new pay (or remuneration) plan, which Tesco's board says is a simpler, more collegiate and more investor-friendly version compared to the old one, basically removes executive-level stock options from the senior executives-directors' compensation (bonuses and stock on top of base salary) package and replaces them with what Tesco is calling a performance share award.

All the directors performance share awards are based on the total performance of Tesco plc, rather than its individual divisions and the like, which is one of the collegiate aspects of the plan, according to Tesco.

In the new program Tesco also has dumped its four long-term financial incentive plans for the executive directors - which is something some investors and others have called excessive - and replaced them with just one plan.

The old plan also required five different performance measures or metrics to determine success in terms of the bonuses and stock options the executive directors would receive. In contrast, under the new and simplified plan, there are two performance measures: return on capital employed and earnings-per-share.

Additionally, under the old plan Tesco used over 20 performance measures to determine annual bonuses for the senior executives who also sit on the board. That's been chopped down to just seven in the new plan. More simplification.

All the directors will participate in the same plan now (collegiate), unlike under the old scheme, including board member-Tesco group deputy CEO, chief marketing officer and Fresh & Easy Neighborhood Market CEO Tim Mason, who was singled out among the executive directors previously, in that part of his bonus and stock option package was based on the performance of Fresh & Easy USA, which he's been CEO of since 2006.

The package though wasn't based on Fresh & Easy's making a profit or even breaking-even. Instead it was based on certain benchmarks put forth by former CEO Terry Leahy, who retired in March of this year, and approved by Tesco's board.

For example, last year Mason was given a bonus worth about 80% of his annual salary of £832,000 - which is about $1.336 million at today's conversion rate - even though Fresh & Easy had loses about 10% higher than the previous year.

In 2009, Mason took home total compensation of over $6 million, despite huge losses at Fresh & Easy.

In both cases then Tesco CEO Terry Leahy and the board said he earned the pay and bonuses, plus stock options, for hitting certain strategic goals and meeting certain corporate benchmarks and milestones.

From 2006 to last year Mason's only position, in addition to sitting on the board, was CEO of Fresh & Easy. But in March of this year he was named to the added posts of Tesco group deputy CEO and chief marketing officer for Tesco. Therefore, it makes logical sense he should be included along with all the other executives-directors in the compensation scheme, in our analysis. (See our Jun 29 piece linked above and below for more details about that analysis.)

No independent investigation of Fresh & Easy

In our story on Wednesday [Union-Affiliated CtW Investment Group Calls For 'Objective and 'Independent' Review Of Tesco's Fresh & Easy Neighborhood Market] we reported the labor union-affiliated Ctw Investment Group asked new Tesco board member and incoming (November 2011) chairman Richard Broadbent to initiate an objective and independent review of the retailer's El Segundo, California-based Fresh & Easy chain. Broadbent was approved by shareholders as a board member today. He joins the board tomorrow.

In our story linked above, we said the board would not do this now or anytime in the future. Tesco board chair David Reid, who is retiring in November, and the rest of the board did just that, dismissing the request by CtW and another firm, Pirc, saying it would not order such an independent review of Fresh & Easy Neighborhood Market. End of story.

In a statement Tesco's board said: "CtW doesn't own shares and doesn't represent shareholders. Pirc doesn't represent shareholders either. We are very glad that shareholders have endorsed the new Remuneration Plan."

CtW Investment Group manages pension funds for various U.S. labor unions, including the United Food & Commercial Workers (UFCW) union, which have investments in Tesco. It says it's therefore an institutional investor in Tesco, just like the various other fund management firms attending today's meeting. And since CtW was at the meeting, and Tesco only allows investors and the media at the annual shareholders' meeting, it would appear on the face of it the retailer recognizes the investment group as an investor. If not, why was CtW allowed at today's meeting?

A representative of CtW said today he was disappointed by the decision the board made to say no to an independent and objective investigation of Fresh & Easy. But he also said he was far from surprised by the decision.

The union pension fund-affiliated investment group was also at last year's shareholders' meeting, along with the UFCW union. The representatives of CtW and the UFCW were part of some verbal fireworks with then CEO Terry Leahy last year over the compensation issue (particularly as it pertained to Tim Mason), which is something Tesco and new CEO Clarke avoided at this year's shareholders' meeting. Read our story here - July 5, 2010: Verbal Fireworks at Tesco's 2010 Sharholders' Meeting in London. It's also good background in general for this piece.

The vast majority of investors at today's meeting were fine with the board's saying no to an independent investigation of Fresh & Easy, although many weren't fine or happy about the 176-store U.S. chain's continued losses, which to date are at about $900 million

CEO Clarke said little - and deputy CEO and Fresh & Easy Neighborhood Market CEO Mason said nothing - about Fresh & Easy at today's meeting, other Clarke's saying Tesco still plans to break even with the grocery chain, which lost about $307 million on sales of about $818 million in the fiscal year end February 26, 2011, by the end of the its 2012/13 fiscal year, which is 20 months from now.

Clark also said he's pleased with Fresh & Easy's "progress," based in part on the four trips he's made to its El Segundo, California-based headquarters offices and Riverside County distribution center campus since February of this year,  saying he believes the chain's on track to break even by February 2013, which is something he's said before a few times since taking over in March as CEO of Tesco.

Mason didn't make a presentation about Fresh & Easy at today's shareholders' meeting, which didn't surprise us but demonstrates how much Tesco wants to downplay its U.S. operation, which has 176 stores in California (127 units), Arizona (28) and Nevada (21), which is hundreds of fewer stores then it originally said it would have open by now.

The first Fresh  Easy stores opened in November 2007. Tesco originally planned to have 500 stores open by now and up to a 1,000 units open by the end of 2013. The plans now call for 300 stores to be open by February 2013.

We said from day one, late 2007 when the blog was started, that those store count number were over the top.

We were right.

And when Philip Clarke took over as CEO of Tesco in March, he said it would take 400 stores to break-even. In April he revised that to 300 stores. Terry Leahy's dream was for Fresh & Easy to be a cash cow for Tesco. Clarke, who inherited the loses at Fresh & Easy from Leahy and Mason, would be pleased as punch to break even.

This year's fireworks: Protesting pig farmers

Tesco's shareholders may have been fairly happy about things overall at today's annual meeting, voting by 97.2% in favor of the Remuneration Plan, as an example. But a group of about 70-80 British pig farmers and supporters protesting outside the conference center in Nottingham where the event was held were "slopping mad."

Struggling to bring home the bacon

The pig farmers and there allies said Tesco is paying them unfair prices for the pork they sell to the retailer, which is the UK's number one grocer, with an about 30% market share, and they want the retailer to pay a more fair price for the locally-raised pigs. Tesco's top two competitors, Walmart-owned Asda and Sainsbury's hold a combined national share of about 34%, to put just how big Tesco is in the UK in perspective.

One of the pig farmers said rising costs for feed are rapidly putting him in a situation in which if Tesco doesn't soon raise the price it pays him for his pork he will be losing money on every pig if he continues selling to the retailer.

A Tesco spokesman said the retailer believes it pays a fair price for the pigs and that Tesco makes a strong effort to support and advertise the locally-produced pork.

But the pig farmers weren't buying this, which is why they were protesting outside the shareholders' meeting, holding signs with various slogans, such as this one: "Tesco - how about the crumbs from your rich man's table?"

The protesting pig farmers received a significant amount of attention from investors and the media today though, perhaps proving that in addition to pork-producing the also know that in public relations as in pig farming the "squeaky" wheel most often not only gets the grease but also its 15 minutes or so in the spotlight.

But Tesco would be wise to sit down with these local pig farmers and try to hash something agreeable out, as the issue has been festering for a very long time in the UK.

Related Stories

June 29, 2011: Union-Affiliated CtW Investment Group Calls For 'Objective and 'Independent' Review Of Tesco's Fresh & Easy Neighborhood Market

May 11, 2011: Richard Broadbent to Join Tesco's Board July 2; Become New Chairman November 3

April 19, 2011: Tesco's Fresh & Easy Neighborhood Market Posts Biggest One-Year Loss Yet - $307 Million Loss on Sales of $818 Million
March 1, 2011: Fresh & Easy Neighborhood Market CEO Tim Mason Pockets Nearly $1 Million From Sale of Tesco Shares

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

February 28, 2011: Big Day For Tesco CEO Terry Leahy: Retirement and A Birthday But No Break-Even For Fresh & Easy USA On His Watch

February 25, 2011: A Parting Gift: Retiring Tesco CEO Terry Leahy Exercises Options and Sells Nearly Three Million Shares of Company Stock

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

January 27, 2011: Incoming Tesco CEO Philip Clarke Names Expanded Corporate Executive Committee

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

October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market

July 21, 2010: Fresh & Easy Neighborhood Market CEO Tim Mason Leads All Directors in Tesco Stock Share Incentive Plan Payouts

July 5, 2010: Verbal Fireworks at Tesco's 2010 Sharholders' Meeting in London

July 2, 2010: Tesco's Director Remuneration Report Approved at Today's AGM; But 47% of Shareholders Voice Opposition to Director Pay Packages

July 1, 2010: A Preview of Tomorrow's (July 2, 2010) Tesco Annual General Meeting

June 23, 2010: Tesco Fresh & Easy Neighborhood Market CEO Tim Mason Gets Big Stock Award Featuring a Singular Twist

June 24, 2010: Warren Buffett Strikes Again: Buys 2 Million More Shares of Tesco Stock For 3.2% Ownership Stake

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

June 4, 2010: Every Little (Bit) Helps: Tesco Fresh & Easy Neighborhood Market CEO Mason Paid $6.188 Million For 2009

[Also: Click on the following links - 2008 AGM, 2010 AGM July 2 2010, AGM, Ctw Investment Group, Ctw shareholder letter, executive compensation, Tesco, Tesco 2010 shareholder meeting, Tesco director compensation - to read stories about past Tesco annual general (shareholder) meetings and related topics.]