News & Analysis
United Kingdom-based Tesco said today comparable-store-sales (called like-for-like in the UK) for its El Segundo, California-based Fresh & Easy Neighborhood Market chain increased by 11.9% for its 2011/12 fiscal year third quarter, which ended November 26, 2011.
The 11.9% comparable-store-sales gain is slightly less than the 12.4% Tesco reported for Fresh & Easy for its fiscal second quarter, which ended August 27.
Comparable or same-store-sales is a key indicator for retailers because the metric only includes stores open a year or more.
In contrast, overall sales growth as a metric includes new stores opened during a given quarter. Tesco reported a 29.2% overall growth rate for the third quarter for Fresh & Easy Neighborhood Market.
When looking at Fresh & Easy Neighborhood Market, comparable store sales are what's key because the numerous new Fresh & Easy stores Tesco opens tends to make the overall sales number meaningless when it comes to gaining any real understanding of the 184-store U.S. grocery chain's sales performance.
The 11.9% comparable sales growth number is a good one for Tesco's Fresh & Easy. It also continues a solid comparable sales growth trend for the grocery chain, which has turned in double-digit comparable sales increases over the last few quarters.
However, a considerable percentage of that double-digit comparable sales growth is due to heavy discounting by the chain during the third quarter, which included distributing numerous 20% off discount store coupons, along with the discounts offered customers with the new Fresh & Easy "Friends" reward card which was launched in early October, in our analysis.
Fresh & Easy's loyalty/rewards card gives customers points for certain purchases which they can redeem for cash discounts. For example, 500 points equals five dollars off any given total purchase. Fresh & Easy gave (and is still offering as an intro) shoppers 500 free points or $5 on their cards just for signing up.
Philip Clarke, Tesco's CEO, said today U.S. like-for-like revenue rose almost 30% in the "week around Thanksgiving," which "demonstrates the business is really gaining traction with customers."
What Clark didn't mention though - and what you aren't likely to read elsewhere because we track such things closely at Fresh & Easy Buzz - is that from November 2 through the week leading up to Thanksgiving, Fresh & Easy Neighborhood Market distributed five of its 20% off - $10 off purchases of $50 or more, 6 off $30, $5 off $25 - store coupons via its "friends of fresh & easy" e-mail-based flyer. The coupons are also easily available online by simply typing "fresh & easy coupons" into Google or one of the other search engines.
Fresh & Easy distributed the 20% off store coupons online on the following dates leading up to Thanksgiving on November 24: November 2, 9, 16, 18 and 22.
Fresh & Easy Neighborhood Market also distributed the coupons in its weekly advertising circulars, which are direct mailed to consumers homes.
Employees at a number of Fresh & Easy stores we visited in the three weeks before Thanksgiving were also handing out store coupons to shoppers. Additionally, a number of our correspondents reported in the same thing.
Such discounting, which has helped Tesco achieve double-digit same-store sales with Fresh & Easy for a number of quarters now, does little to help the U.S. chain's trading margin, which Tesco must increase significantly if, as CEO Philip Clarke says will happen, it's going to break-even with Fresh & Easy Neighborhood Market by the end of its 2012/13 fiscal year, which ends in February 2013.
As noted earlier, the 11.9% comparable-store-sales metric for Fresh & Easy is a good one.
The big question though is - at what cost (as in margin)?
Tesco doesn't report metrics like margin - or even sales and profit/loss - for Fresh & Easy for its third quarter.
Therefore, we can't know what that cost might be. For example, did Tesco improve its poor trading margin (negative 35% at fiscal half year) with Fresh & Easy during the fiscal third quarter? Conversely, Did the heavy discounting make that poor trading margin even worse? Did it stay the same?
We won't know any meaningful about whether or not the retailer improving its trading margin and is decreasing its loss with Fresh & Easy until Tesco reports its fiscal 2011/12 full year financials in April 2012. The fiscal year is over at the end of February 2012.
On October 5 of this year Tesco reported a fiscal 2011/12 half-year loss of $112 million for Fresh & Easy, on sales of $470 million. The loss is 21-23% (depending on how recorded) lower than the one iy reported for Fresh & Easy for the same period in the previous fiscal year.
Meanwhile, Tesco today reported its fourth-straight quarter of sales declines at home in the UK, which accounts for nearly 70% of the global retailer's revenue. Tesco has operations in 14 countries.
Sales at Tesco's UK stores open at least a year dropped 0.9 percent, excluding fuel and value-added tax, in the fiscal third quarter ended Nov. 26, the retailer reported today.
But despite the decline in sales at home, Tesco reported an overall increase in corporate revenue of 7.2%, including fuel (7.3% at constant exchange rates). and 5.4%, excluding fuel (5.5% at constant exchange rates) for its fiscal third quarter.
[You can view Tesco's fiscal 2011/12 third quarter reporting here.]
The fiscal fourth quarter, which ends in February, is a crucial period for Tesco with its Fresh & Easy chain, which is something we'll be offering analysis on in upcoming stories.
Related Stories
November 27, 2011: More Reshuffling: Number Two Marketing Exec Follows CMO Uwins Out the Door at Tesco's Fresh & Easy Neighborhood Market
November 18, 2011: Fresh & Easy Neighborhood Market Combining Big Seasonal Foods Assortment With Promos and Discounts to Lure Holiday Shoppers
November 10, 2011; Chief Marketing Officer Uwins Out in Top-Level Reshuffling at Tesco's Fresh & Easy Neighborhood Market
October 10, 2011: Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
Thursday, December 8, 2011
Bad Timing With New Law Effective January 1, 2012: Fontana, California Fresh & Easy Store Cited For Allegedly Selling Alcohol to Minors
News & Analysis
The Fresh & Easy Neighborhood Market store at 16049 Baseline Boulevard in Fontana, California is one of 20 retail stores in Southern California's San Bernardino County that were issued citations by the California Alcohol Beverage Control Board (ABC) this past week for allegedly selling alcoholic beverages to minors.
The citation issued to the Fresh & Easy store in Fontana was the result of a regional sweep conducted by the state's alcoholic beverage sales regulatory agency and the San Bernardino County Probation Department, according to a spokesperson for the ABC.
The 19 other retail stores are in the cities of Ontario, Upland, Redlands, Montclair, San Bernardino and Rancho Cucamonga, according to the ABC and the San Bernardino County authorities.
The citation comes at a particularly bad time for Tesco's Southern California-based Fresh & Easy grocery chain because AB 183, which bans the sale of alcoholic beverages at self-service checkouts in retail stores, goes into effect January 1, 2012.
We nicknamed the self-service checkout booze ban bill the "Tesco Fresh & Easy Law" because Fresh & Easy Neighborhood Market is the only grocery chain in California that offers self-service checkout only in its stores.
All the other chains and independent grocers in the Golden State either offer full-service checkout only or offer a mix of full and self-service.
El Segundo, California-based Fresh & Easy Neighborhood Market has been struggling to figure out a way to comply with the law without having to add some sort of full-service checkout component to what it calls its "assisted checkout" system in its 135 stores in California, according to our sources who are familiar with the discussions.
There are 184 Fresh & Easy stores in the Golden State. The remaining 49 stores are in metropolitan Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (29 units).
Fresh & Easy calls its self-service checkout system "assisted checkout" because if asked, store workers will assist customers with the checkout process. The employees also regularly assist customers when problems occur with the self-checkout process.
Additionally, the self-service checkouts at Fresh & Easy don't allow customers to fully self-scan alcoholic beverage items.
Instead, the product UPC code numbers are programmed into the computer, so when a customer scans an item the system flags it, stopping the self-checkout process. A store worker must then come to the checkout and check the customer's identification card, which the grocer does for those a clerk believes to be 40-years-old or younger. If all is well, the clerk then punches a special code in the register, which then allows the customer to complete his or her self-checkout.
The intent of AB 183 however is that the new law will require a store worker to handle any and all checkout transactions involving alcohol from start to finish, in a face-to-face manner with the customer.
Fresh & Easy has two types or versions of self or assisted service checkout lanes in its stores.
The first type, which has shorter checkstands, isn't monitored regularly by store workers.
The second version though, which features longer checkout stands with conveyor belts, is monitored regularly by one or more store clerks, who linger in the area to assist customers.
It's this second system that Tesco's Fresh & Easy has considered tweaking a bit so that it might meet the requirements of the self-service alcohol beverage self-checkout ban law when it goes into effect less than a month from now, according to our sources.
For example, at the larger conveyor belt-equipped checkouts where store employees are always present and monitor the checkout process, Fresh & Easy could have the employees conduct any and all customer transactions that involve the purchase of alcoholic beverages.
It's possible, although not fully-clear, that if the grocer had a store worker conduct the entire transaction from start to finish, it might meet the legal language of AB 183, although it wouldn't likely meet the intent of the legislation's author, Assemblywomen Fiona Ma (Democrat-San Francisco), and the various supporters of the law.
Her intent behind the legislation, if not spelled out explicitly in the bill's language, is that retail stores would need to offer both full and self-service checkout under the new law.
However, the definition of full-service checkout isn't without some ambiguity in AB 183, based on our close reading of the legislation. Therefore it is possible, in our analysis, that a version of Fresh & Easy's monitored self/assisted checkout could qualify under the law, if not based on the intent of the legislation, perhaps on the actual language of the bill.
The other alternative for Fresh & Easy would be to offer at least one full-service checkout in each of its stores in California, which is something we suggested in early 2008 it do for reasons having nothing to do with any legislation in California, which wasn't yet introduced at the time, designed to ban alcohol sales at self-service checkouts in retail stores.
We stress we're not saying Fresh & Easy Neighborhood Market has decided to go with the option we are reporting on. Rather, based on our reporting, it's one scenario the grocery chain is considering because if possible it wants to retain its self/assisted checkout system, even if doing so requires some modifications, rather than add fell-service checkouts to the California stores, according to our sources.
Meanwhile, although a retailer being issued a citation for allegedly selling alcohol to minors isn't a capital offense, it is a serious one, albeit not completely uncommon.
However, receiving such a citation from authorities coming so close to the self-service checkout alcohol sales ban law going into effect is particularly bad timing for Tesco's Fresh & Easy.
The California ABC is aware the grocer offers self-service checkout only in its stores, and it plans to monitor Fresh & Easy closely once the law goes into effect.
In addition, numerous California law enforcement agencies were supporters of AB 183, and as a result plan to step-up monitoring of the checkouts once the law goes into effect in January 2012.
The law has fines attached to it for retailers that are caught allowing alcoholic beverage sales at self-service checkouts in their stores.
We've talked to staff members of the author and co-authors of AB 183, who all say the intent behind the law is to require face-to-face transactions between customers and store workers whenever alcohol is purchase in a retail store.
With January 1, 2012 coming fast, Tesco's Fresh & Easy will soon need to announce how it's going to comply with the new law.
Waiting until the last minute to do so - and the last minute is pretty much here - is a mistake because if what the grocer does to comply with AB 183 runs counter to the intent of Ma and her supporters, it could become a major public relations disaster for the grocery chain, which is the last thing it needs as it attempts to break-even (Tesco lost $112 million on Fresh & Easy for the first half of its fiscal year ended in August) by the end of 2012.
Related Stories
October 10, 2011: Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
September 9, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
The Fresh & Easy Neighborhood Market store at 16049 Baseline Boulevard in Fontana, California is one of 20 retail stores in Southern California's San Bernardino County that were issued citations by the California Alcohol Beverage Control Board (ABC) this past week for allegedly selling alcoholic beverages to minors.
The citation issued to the Fresh & Easy store in Fontana was the result of a regional sweep conducted by the state's alcoholic beverage sales regulatory agency and the San Bernardino County Probation Department, according to a spokesperson for the ABC.
The 19 other retail stores are in the cities of Ontario, Upland, Redlands, Montclair, San Bernardino and Rancho Cucamonga, according to the ABC and the San Bernardino County authorities.
 |
| Self or assisted service checkout at Fresh & Easy. |
We nicknamed the self-service checkout booze ban bill the "Tesco Fresh & Easy Law" because Fresh & Easy Neighborhood Market is the only grocery chain in California that offers self-service checkout only in its stores.
All the other chains and independent grocers in the Golden State either offer full-service checkout only or offer a mix of full and self-service.
El Segundo, California-based Fresh & Easy Neighborhood Market has been struggling to figure out a way to comply with the law without having to add some sort of full-service checkout component to what it calls its "assisted checkout" system in its 135 stores in California, according to our sources who are familiar with the discussions.
There are 184 Fresh & Easy stores in the Golden State. The remaining 49 stores are in metropolitan Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (29 units).
Fresh & Easy calls its self-service checkout system "assisted checkout" because if asked, store workers will assist customers with the checkout process. The employees also regularly assist customers when problems occur with the self-checkout process.
Additionally, the self-service checkouts at Fresh & Easy don't allow customers to fully self-scan alcoholic beverage items.
Instead, the product UPC code numbers are programmed into the computer, so when a customer scans an item the system flags it, stopping the self-checkout process. A store worker must then come to the checkout and check the customer's identification card, which the grocer does for those a clerk believes to be 40-years-old or younger. If all is well, the clerk then punches a special code in the register, which then allows the customer to complete his or her self-checkout.
The intent of AB 183 however is that the new law will require a store worker to handle any and all checkout transactions involving alcohol from start to finish, in a face-to-face manner with the customer.
Fresh & Easy has two types or versions of self or assisted service checkout lanes in its stores.
The first type, which has shorter checkstands, isn't monitored regularly by store workers.
The second version though, which features longer checkout stands with conveyor belts, is monitored regularly by one or more store clerks, who linger in the area to assist customers.
It's this second system that Tesco's Fresh & Easy has considered tweaking a bit so that it might meet the requirements of the self-service alcohol beverage self-checkout ban law when it goes into effect less than a month from now, according to our sources.
For example, at the larger conveyor belt-equipped checkouts where store employees are always present and monitor the checkout process, Fresh & Easy could have the employees conduct any and all customer transactions that involve the purchase of alcoholic beverages.
It's possible, although not fully-clear, that if the grocer had a store worker conduct the entire transaction from start to finish, it might meet the legal language of AB 183, although it wouldn't likely meet the intent of the legislation's author, Assemblywomen Fiona Ma (Democrat-San Francisco), and the various supporters of the law.
Her intent behind the legislation, if not spelled out explicitly in the bill's language, is that retail stores would need to offer both full and self-service checkout under the new law.
However, the definition of full-service checkout isn't without some ambiguity in AB 183, based on our close reading of the legislation. Therefore it is possible, in our analysis, that a version of Fresh & Easy's monitored self/assisted checkout could qualify under the law, if not based on the intent of the legislation, perhaps on the actual language of the bill.
The other alternative for Fresh & Easy would be to offer at least one full-service checkout in each of its stores in California, which is something we suggested in early 2008 it do for reasons having nothing to do with any legislation in California, which wasn't yet introduced at the time, designed to ban alcohol sales at self-service checkouts in retail stores.
We stress we're not saying Fresh & Easy Neighborhood Market has decided to go with the option we are reporting on. Rather, based on our reporting, it's one scenario the grocery chain is considering because if possible it wants to retain its self/assisted checkout system, even if doing so requires some modifications, rather than add fell-service checkouts to the California stores, according to our sources.
Meanwhile, although a retailer being issued a citation for allegedly selling alcohol to minors isn't a capital offense, it is a serious one, albeit not completely uncommon.
However, receiving such a citation from authorities coming so close to the self-service checkout alcohol sales ban law going into effect is particularly bad timing for Tesco's Fresh & Easy.
The California ABC is aware the grocer offers self-service checkout only in its stores, and it plans to monitor Fresh & Easy closely once the law goes into effect.
In addition, numerous California law enforcement agencies were supporters of AB 183, and as a result plan to step-up monitoring of the checkouts once the law goes into effect in January 2012.
The law has fines attached to it for retailers that are caught allowing alcoholic beverage sales at self-service checkouts in their stores.
We've talked to staff members of the author and co-authors of AB 183, who all say the intent behind the law is to require face-to-face transactions between customers and store workers whenever alcohol is purchase in a retail store.
With January 1, 2012 coming fast, Tesco's Fresh & Easy will soon need to announce how it's going to comply with the new law.
Waiting until the last minute to do so - and the last minute is pretty much here - is a mistake because if what the grocer does to comply with AB 183 runs counter to the intent of Ma and her supporters, it could become a major public relations disaster for the grocery chain, which is the last thing it needs as it attempts to break-even (Tesco lost $112 million on Fresh & Easy for the first half of its fiscal year ended in August) by the end of 2012.
Related Stories
October 10, 2011: Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
September 9, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
Monday, December 5, 2011
Dollar General Jump-Starts California Launch: Taking Over 5 Centro Mart Supermarkets For Early 2012 Openings
Related Story: February 2, 2011: Centro Mart-Stockton Chairman, Veteran California Grocer Jimmy Lam Has Died.
Tennessee-based dollar-store-dynamo Dollar General plans to hit the ground running hard and fast when it launches both its traditional dollar format stores and its small-box Dollar General Market grocery stores in California next year.
To jump-start its California launch, 38-state, 9,813-store Dollar General has done a deal with Centro Mart, a 65-year-old independent supermarket chain based in Stockton, California, in which Dollar General will take over five of the grocer's seven stores - four in Stockton and one in the San Francisco Bay Area city of Brentwood.
Centro Mart CEO Mel Young says the Stockton-based chain, which until his death earlier in January was run for decades by veteran California grocer Jimmy Lam (see the related story at top), will close the five stores at the end of this month. It will keep two stores, a Centro Mart banner grocery store in the East Bay Area city of Oakley and a supermarket it operates under the Apple Marketplace banner in Lodi, which is near Stockton.
Dollar General will lease the five Centro Mart stores. Its not acquiring Centro Mart.
Dollar General will convert four of the five Centro Mart stores into Dollar General Market grocery stores, which feature fresh foods as well as groceries, and the remaining supermarket will become one of its traditional dollar stores, according to Todd Vascos, Dollar General's executive vice president and chief merchandising officer.
Vascos says Dollar General will begin converting the Centro Mart stores shortly after they are closed, targeting all five for spring 2012, most likely March-April, openings.
Dollar General announced its plans to enter Nevada and California earlier this year. So far the retailer has opened five of its Dollar General Market grocery stores in metro Las Vegas, Nevada.
The retailer currently operates 62 Dollar General Market stores in the U.S.
The Nevada stores are the first Dollar General Market stores the retailer has opened since 2007. Since then it has revamped the format, making numerous changes to the original version.
Centro Mart's Young says Dollar General approached the grocer about acquiring the stores earlier this year.
He says Centro-Mart agreed to the deal in part because of long-time CEO Jimmy Lam's death earlier this year, along with the heavy competitive climate in Northern California, which has made it tough for the independent chain to compete.
Dollar General is also looking for additional locations in Northern California for both its traditional dollar stores and its Dollar General Market.
Our commercial real estate sources, many of whom are regular readers of Fresh & Easy Buzz, tell us the retailer is looking in the San Francisco Bay Area, Sacramento metro region, the Central Valley and farther north for locations, including paying special attention to the numerous vacant big and small-box store buildings currently on the market.
The dollar store retailer's plans also include Southern California, for both its dollar stores and Dollar General Market grocery stores. Like in the north, our commercial real estate sources tell us Dollar General is looking for numerous locations in the region.
Dollar General reported its third quarter financials today.
In a conference call reporting the results, CEO Richard Dreiling didn't address the Centro-Mart deal specifically, but said the retailer plans to open about 40 Dollar General Market grocery stores nationally in 2012. That number includes the five stores in Northern California, plus additional units in "new and existing markets."
Dollar General is entering into a short-term lease for a distribution center near Bakersfield, California which will serve the new stores in California and Nevada, along with existing stores in Arizona, Dreiling said today. The facility will open in the first half of 2012, he said. That timing fits with the April-May planned opening of the five to-be-converted Centro-Mart stores in Northern California.
Dreiling also said today that a major effort with Dollar General Market in its newest two markets, (Nevada and California) as well as nationally, will be to focus on food dessert regions where residents are underserved by grocery stores offering fresh foods and groceries at reasonable prices.
The CEO also said today that Dollar General is expanding its perishables offering in both the grocery markets and in its traditional dollar format stores.
"Fresh and refrigerated foods helped us drive customer traffic and increase basket size by serving a greater share of our customers' needs," Dreiling said. "We will continue to take an aggressive stance towards improving our in stock position. This is a never ending effort which requires focus on store-level perpetual inventory accuracy as well as improved execution across ordering, fulfillment, stocking and delivery."
CEO Dreiling also said today that private brand expansion is a key part of the Dollar General's ongoing strategy, saying the retailer is expanding product sourcing to new categories and importing from new countries. "To further expand our private brands we’ll be adding 150 new SKUs as we move into new categories," he said.
Dollar General reported fiscal 2011 third quarter (13 weeks ended
Excluding expenses in the 2011 third quarter of
Consumable product sales continued to increase at a faster pace than non-consumables in Dollar General's third quarter, with the strongest growth across the food and snack categories, according to CEO Drieling. "Salty snacks, carbonated beverages, coffee and milk were the largest contributors," he said today.
The fact consumable sales are outpacing all other categories for Dollar General is in part what's making the retailer high on growing its Dollar General Market grocery store format, including in California, which with nearly 40 million residents has the highest population in the U.S.
Dollar General's entry into California next year adds yet another competitive layer to what already is a highly competitive food and grocery retailing scene, from Southern California and the Central Valley, to Northern California, where the retailer will open its first five grocery stores in the soon to be former Centro-Mart locations in early 2012.
The Tesco Christmas Dinner Pizza - A Festive Feast Without the Fork
Private Brand Showcase
United Kingdom-based Tesco, which owns 184-store El Segundo, California-based Fresh & Easy Neighborhood Market, is having trolley carts full of fun in Britain this year developing and merchandising limited edition private brand food products for the Christmas holiday season.
For example, yesterday (read here) we wrote about Tesco's limited edition Tesco Finest brand "Crispmas Dinner" collection, a line (range in British industry terminology) of Christmas dinner-inspired crisps (potato chips) in flavors like mince pie and roasted turkey with stuffing, which it's now offering for sale in its stores in the UK, for the Christmas and New Years' the holiday season.
But saying "Merry Crispmas" to shoppers with its "Crispmas Dinner" snack crisp collection is merely the tip of the festive feast-inspired iceberg of creativity coming from Tesco's private brand product developers.
Enter Tesco's first-ever Tesco private brand Christmas dinner pizza (pictured at top and below), which the retailer is introducing in its stores in the UK this week.
The chilled, ready-to-heat pizza, which is a carnivore's delight, features a turkey, sage and onion stuffing, and is piled high with sausage, smoked bacon and mozzarella cheese.
Here's how chilled foods range product developer Louise Sampson, the proud parent of the turkey and pork-packed Christmas dinner pizza, describes the Tesco holiday creation: "We set out to create a pizza for all those people who simply can’t wait until Christmas Day for the festive feast and wanted a sneak taste beforehand. We have created a pizza worthy of the big occasion with a stone-baked thin base which allows the toppings to take centre stage."
The timing of the Christmas dinner pizza could be spot on for Tesco.
Why? Because pizza has recently become the most-popular prepared foods item (chilled and frozen) sold in UK supermarkets.
For example, in 2010 British consumers bought a total of 466 million pizzas from UK stores, as compared to a mere 156 million curries, according to data compiled in August of this year by Kantar Worldwide's UK office.
Tesco has been taking advantage of the booming pizza market in the UK - its corporate spokesperson says over the last 18 months its been overhauling, upgrading and developing new pizza varieties, and now offers 119 different refrigerated and frozen pizza varieties in its stores there.
Tesco is the leading food, grocery and general merchandise retailer in the UK.
It has an about 30% market share, according to research firm Kantar Worldwide, which is nearly as much as the number two and three chains, Walmart-owned ASDA and Sainsbury's, have combined, which is about 36%. Number four supermarket chain Morrisons has about 13% .
Together the four supermarket chains are refereed to in the UK as the "Big Four," largely because together they account for nearly 80% of all the food and groceries sold in the nation.
The Tesco Christmas dinner pizza not only is a creative seasonal item for Tesco, it also allows for plenty of food product fun and buzz creation. We're writing about it after all.
The idea of taking the makings a traditional Christmas dinner and putting it on a pizza might seem odd at first. However, with the exception of the turkey and stuffing, the other items - turkey, ham, bacon, onions and cheese - are pizza-topping mainstays. In the case of turkey, we're surprised it isn't used more often than is it as a pizza-topping, particularly since roasted chicken has become a popular choice for more upscale pizza offerings.
In our analysis and opinion, Tesco's Christmas dinner pizza could serve two classes of consumer, those, like Louse Sampson opined about, who want an early taste of what will be their traditional Christmas dinner to come in a few weeks, and those who, not wanting to go to all the work of shopping for and preparing a traditional Christmas dinner for Christmas Day, instead buy a few Tesco Christmas dinner pizza's along with their favorite beverages and keep it simple, enjoying a festive feast without all the hassle - and without the fork.
Suggestion: Tesco's Fresh & Easy Neighborhood Market chain should jump on the Christmas dinner pizza bandwagon and whip up a limited edition version of its own at its kitchen facility in Riverside County, California.
Why? No U.S. grocery chain offers such an item, for one. But even more so, it would be a fun and attention-getting creation (and in our estimation perhaps even a good seller) - the Fresh & Easy Christmas dinner pizza - for the grocer this Christmas and New Years' holiday season.
The clock is ticking. But there's still time if the Fresh & Easy fresh-prepared foods' product development team obtains the recipe from the mother ship in the UK this week and gets producing, post-haste.
 |
| Photo credit: SMS, exclusive to Fresh & Easy Buzz. |
Recent Private Brand Showcase stories
December 4, 2011: 'Merry Crispmas' ... From Tesco
December 1, 2011: Master Chocolate-Maker Tells the Story Behind Fresh & Easy Neighborhood Market's Holiday Confections
November 14, 2011: Safeway Puts its Brand on Ice in San Francisco For the Holidays
November 13, 2011: Trader Joe's Introduces 'Wasabi Arugula' ... Minus the Wasabi
November 9, 2011: Glatt to Meet You Paisan - Kosher 'Meats' Italian at Mollie Stone's Markets
October 28, 2011: October 28, 2011: Move Over Chipotle - Fresh & Easy Neighborhood Market Introduces its Own Brand of Burrito Bowls
Readers: Click here to read all past stories in our Private Brand Showcase feature.
Sunday, December 4, 2011
'Merry Crispmas' ... From Tesco
Private Brand Showcase
Tesco is wishing shoppers in the United Kingdom a "Merry Crispmas."
The UK-based global retailer has taken some of the most iconic foods and desserts associated with Christmas dinner - mince pie, turkey, stuffing and cranberries - and used them as the flavor inspirations for its Tesco Finest private brand "Crispmas Dinner" collection, which is a limited edition line (range in British terminology) of sweet and savory crisps (potato chips to uninitiated Americans) that it's introducing in its stores in Britain for Christmas and New Years.
The "Crispmas Dinner" collection includes mince pie flavored crisps, which Tesco is billing as the "first ever" sweet crisp in Britain. The hand-cooked mince pie crisps are seasoned with dried fruit, spices and buttery pastry, according to Chris Gee, the crisps' buyer at Tesco in the UK.
In addition to the mince pie flavored snack chips, the Tesco Finest brand crisps also come in three other varieties: roast turkey with stuffing and onion gravy, spiced gammon, and Wensleydale and cranberry cheese flavor.
Gammon is pork, as in Christmas dinner ham. Specifically, the meat comes from the hind-leg of the pig, which differentiates it from bacon. Wensleydale is an aged cheese produced locally in Wensleydale, North Yorkshire, England.
Tesco Finest is the United Kingdom-based global retailer's premium food brand, which is uses on fresh foods, perishables, frozen foods and grocery products.
Tesco, which owns 184-store Fresh & Easy Neighborhood market in the U.S. (California, Nevada and Arizona), is the UK's leading food and grocery retailer and the third-largest retailer in the world, after number one Walmart Stores, Inc. and Carrefour of France. The UK, where it has 3,000-plus stores, accounts for about 70% of Tesco's overall global sales. It has operations in 14 countries.
The Christmas dinner-inspired crisps also have multiple local angles, in addition to the use of Wensleydale cheese, according to Tesco. For example, the snack chips, which are produced in Devon UK, are all made from Hermes variety potatoes, which are grown in Cornwall and Hamshire in the United Kingdom.
"These limited edition crisps have been launched with the party season in mind – we think people will be able to have a lot of fun with them," says snack buyer Gee. "We’ve worked with top crisp-making experts to make sure they taste as special as you'd expect of the grandest meal of the year.
Flavored (including exotic flavors) potato, vegetable and other types of chips and crisps are currently very popular in the U.S., Europe, Asia, Africa and elsewhere throughout the world.
For example, the Terra Chips brand, which features numerous flavors and varieties of potato and vegetable chips, is extremely popular in the U.S. Some of the more exotic chip flavored we've spotted in stores throughout the world include: shrimp, Marmite, horseradish, pickled onion and many others.
Last year, Tesco's El Segundo, California-based Fresh & Easy Neighborhood Market chain introduced its own semi-exotic crisp variety, Crunchy Plantain Crisps, which we wrote about here - October 16, 2010: Fresh & Easy Neighborhood Market 'Bags' the Humble and Nutritious Plantain For A New Snack Chip Item.
This exotic flavor growth-trend in the snack chip or crisp category, combined with the fact that in the case of mince pie, which we're told is thus far the top-seller in the Tesco Finest limited edition crisps' range, is about as British as mum and, well ... mince pie when it comes to Christmas, leads us to the reasoned conclusion that Tesco has hit a home run with its "Crispmas Dinner" collection.
The holiday season crisps are creative (the concept, flavors and positioning), fun (allow for plenty of word play) and in the best spirit of branding tell a story - that story being the taking of some of the most iconic foods of Christmas and using them as the flavor inspirations for a popular snack item - crisps - giving them a holiday season flavor and marketing spin.
And the tag-line potential isn't bad either - "Merry Crispmas."
Recent Private Brand Showcase stories
December 1, 2011: Master Chocolate-Maker Tells the Story Behind Fresh & Easy Neighborhood Market's Holiday Confections
November 14, 2011: Safeway Puts its Brand on Ice in San Francisco For the Holidays
November 13, 2011: Trader Joe's Introduces 'Wasabi Arugula' ... Minus the Wasabi
November 9, 2011: Glatt to Meet You Paisan - Kosher 'Meats' Italian at Mollie Stone's Markets
October 28, 2011: Move Over Chipotle - Fresh & Easy Neighborhood Market Introduces its Own Brand of Burrito Bowls
Readers: Click here to read all past stories in our Private Brand Showcase feature.
Friday, December 2, 2011
The 'Earth Fairy' Arrives at Earth Fare to Spread Some Down-to-Earth Holiday Cheer
Meet the Earth Fairy! (teaser) from Earth Fare on Vimeo.
Turkey and Technology -- Grocers, new technologies and holiday promotions
There's arguably no grocer that's better at using video technology and social media to help tell its story, build its brand and promote its stores than North Carolina-based healthy, natural and organic foods-focused supermarket chain Earth Fare, which has 28 stores in North Carolina (9 units), South Carolina (4), Alabama (4), Tennessee (4), Ohio (4), Georgia (2) and Florida (1).
This week Earth Fare launched a new video to introduce the arrival of the Earth Fairy, who also debuted her own Twitter feed today, @TheEarthFairy, where she plans to bring holiday deals, freebies, tips and more to shoppers via the popular social media site.
The video (posted at top) introducing The Earth Fairy is actually a teaser for her upcoming music video titled: "Did You Get What I Got," which breaks December 12, 2012.
Earth Fare says its Earth Fairy holiday goodies maven will be visiting each of its stores, from Monday, December 5 to December 12, bringing those holiday deals, freebies, tips and cheer to shoppers in-person.
We're wondering if Jack is excited to be sharing the video limelight with the Earth Fairy for the December holiday season. Jack (Murphy) is the CEO of Earth Fare and the star of an ongoing series of videos produced by the grocery chain, like the two spots he was featured in here and here in November for Thanksgiving. In the videos the CEO always goes by just plain old Jack.
Jack's been mum so far. But the Earth Fairy just arrived. Therefore, we suspect he may be weighing in with a new Christmas holiday season video soon, perhaps even mentioning the Earth Fairy and her arrival at the fast-growing, down-to-earth natural and organic foods supermarket chain he runs.
Meanwhile, the Earth Fairy is yet another example of Earth Fare's creative use of inexpensive video technology to create excitement among shoppers, help build its brand and promote its stores, in this case for the December holiday season, along with using social media - allowing the Earth Fairy to create her very own Twitter feed - as part of the marketing process and program.
Related Stories in our Turkey & Technology Series
December 1, 2011: Master Chocolate-Maker Tells the Story Behind Fresh & Easy Neighborhood Market's Holiday Confections
November 29, 2011: Raley's Combining High-Tech and High-Touch Tools to promote its Stores For the Holidays
Thursday, December 1, 2011
Master Chocolate-Maker Tells the Story Behind Fresh & Easy Neighborhood Market's Holiday Confections
Fresno, California-based master chocolate-maker Guy Debbas tells the story behind some of Fresh & Easy's private brand holiday chocolate items in the two-minute video above.
Turkey and Technology -- Grocers, new technologies and holiday promotions
Tesco's Fresh & Easy Neighborhood Market has combined the age-old tradition of storytelling with digital-video technology (YouTube in this case) to offer shoppers a two-minute look behind the company that's crafting some of its fresh&easy private brand holiday confections.
The video features master chocolate-maker Guy Debbas, who owns artisan chocolate-maker Go Pure Foods in Fresno, California, telling his story, and the story behind how he makes a variety of confectionery products for Fresh & Easy.
In the video, Debbas steps away from his chocolate factory in Fresno after offering a quick tour of the facility and takes a trip to one of Fresh & Easy's seven stores in the Fresno area, where he talks to some of the store's customers about the sweet treats he crafts for the 184-store fresh food and grocery chain, along with offering the shoppers a free taste or two on his dime.
Consumers are increasingly interested in where the food they eat comes from, regardless of the product's brand.
Is it locally-grown or produced? Is it imported from another county? If so, where? In the case of chocolates and coffee particularly, is it Fair Trade? Is it Organic? If not, are a lot of pesticides used in its production?
These are just a few of the numerous questions consumers are asking about the food products, including store brands, grocers are offering for sale.
When it comes to a food and grocery retailer's own-brand products, telling shoppers where the products and the ingredients used to make them come from and how they're produced can be even more important and significant since the names of the companies that produce grocers' private label brand products are generally treated as top-secret information, largely for competitive reasons by the retailers.
For example, Do you know the names of the numerous food companies who make your favorite Trader Joe's branded products? How about just the names of the producers of your two favorite TJ's branded items?
What about knowing the name of the company that produces Safeway Store's O' Organics organic olive oil and the scores of other products under the brand? Do you know? You most-probably don't. It's nearly top-secret. It's also not easy to find out from Safeway.
And, do you know the names of the food companies behind the many other fresh&easy private brand food and grocery products, other than those FResh & Easy Neighborhood Market has in the past highlighted in a similar storytelling way for marketing purposes?
Do you care if some are huge global food companies? Would it please you to know that many are entrepreneurial companies, like Fresno-based confection-maker Go Pure Foods?
Questions, questions.
Today consumers are demanding much more transparency from food retailers when it comes to their own brands. And smart retailers are using this to their advantage, telling the stories behind some of their private brand products, like Fresh & Easy Neighborhood Market is doing with its holiday confectionery items.
Storytelling is one of the most powerful marketing tools available to retailers, used well of course.
Video technology like YouTube provides retailers with an inexpensive way to tell those stories and potentially reach a whole lot of customers and potential customers, as the two minute video featuring chocolate-maker Guy Debbas telling the story behind some of Fresh & Easy Neighborhood Market's private brand holiday chocolates demonstrates.
Related Stories
November 29, 2011: Raley's Using High-Tech and High-Touch Tools to promote its Stores For the Holidays
November 18, 2011: Fresh & Easy Neighborhood Market Combining Big Seasonal Foods Assortment With Promos and Discounts to Lure Holiday Shoppers
Turkey and Technology -- Grocers, new technologies and holiday promotions
Tesco's Fresh & Easy Neighborhood Market has combined the age-old tradition of storytelling with digital-video technology (YouTube in this case) to offer shoppers a two-minute look behind the company that's crafting some of its fresh&easy private brand holiday confections.
The video features master chocolate-maker Guy Debbas, who owns artisan chocolate-maker Go Pure Foods in Fresno, California, telling his story, and the story behind how he makes a variety of confectionery products for Fresh & Easy.
In the video, Debbas steps away from his chocolate factory in Fresno after offering a quick tour of the facility and takes a trip to one of Fresh & Easy's seven stores in the Fresno area, where he talks to some of the store's customers about the sweet treats he crafts for the 184-store fresh food and grocery chain, along with offering the shoppers a free taste or two on his dime.
Consumers are increasingly interested in where the food they eat comes from, regardless of the product's brand.
Is it locally-grown or produced? Is it imported from another county? If so, where? In the case of chocolates and coffee particularly, is it Fair Trade? Is it Organic? If not, are a lot of pesticides used in its production?
These are just a few of the numerous questions consumers are asking about the food products, including store brands, grocers are offering for sale.
When it comes to a food and grocery retailer's own-brand products, telling shoppers where the products and the ingredients used to make them come from and how they're produced can be even more important and significant since the names of the companies that produce grocers' private label brand products are generally treated as top-secret information, largely for competitive reasons by the retailers.
For example, Do you know the names of the numerous food companies who make your favorite Trader Joe's branded products? How about just the names of the producers of your two favorite TJ's branded items?
What about knowing the name of the company that produces Safeway Store's O' Organics organic olive oil and the scores of other products under the brand? Do you know? You most-probably don't. It's nearly top-secret. It's also not easy to find out from Safeway.
And, do you know the names of the food companies behind the many other fresh&easy private brand food and grocery products, other than those FResh & Easy Neighborhood Market has in the past highlighted in a similar storytelling way for marketing purposes?
Do you care if some are huge global food companies? Would it please you to know that many are entrepreneurial companies, like Fresno-based confection-maker Go Pure Foods?
Questions, questions.
Today consumers are demanding much more transparency from food retailers when it comes to their own brands. And smart retailers are using this to their advantage, telling the stories behind some of their private brand products, like Fresh & Easy Neighborhood Market is doing with its holiday confectionery items.
Storytelling is one of the most powerful marketing tools available to retailers, used well of course.
Video technology like YouTube provides retailers with an inexpensive way to tell those stories and potentially reach a whole lot of customers and potential customers, as the two minute video featuring chocolate-maker Guy Debbas telling the story behind some of Fresh & Easy Neighborhood Market's private brand holiday chocolates demonstrates.
Related Stories
November 29, 2011: Raley's Using High-Tech and High-Touch Tools to promote its Stores For the Holidays
November 18, 2011: Fresh & Easy Neighborhood Market Combining Big Seasonal Foods Assortment With Promos and Discounts to Lure Holiday Shoppers
Subscribe to:
Posts (Atom)
Posts
