Where the subject may be perishable
but the insight isn’t.

Tesco Marks November Eighth
As Launch Date For Six Stores

Jim Prevor's Perishable Pundit, October 20, 2007

The countdown begins:

FRESH & EASY NEIGHBORHOOD MARKET
ANNOUNCES DATE FOR FIRST STORE OPENINGS

Grocer set to open first six stores in Southern California

EL SEGUNDO, Calif. – Tesco, one of the top three retailers in the world, announced the grand opening date for its U.S. venture, Fresh & Easy Neighborhood Market.  Six grocery stores in Los Angeles, Orange, Riverside and San Bernardino counties are scheduled to open on Thursday, November 8, 2007.

The store openings mark a major milestone for the company, which has spent years researching and planning the Fresh & Easy Neighborhood Market format.  This innovative format is the result of extensive customer research in local U.S. markets where Fresh & Easy researchers spent time in the homes of consumers looking at shopping and cooking patterns. 

“After great anticipation, we are thrilled to open our doors to neighborhoods in Southern California and offer them fresh, wholesome food at affordable prices,” said Tim Mason, Fresh & Easy’s CEO.  “We are also excited to demonstrate our strong commitment to being a good neighbor and a great place to work.”

At roughly 10,000 square feet, these neighborhood markets will be smaller than the typical supermarket to give customers a faster, easier shopping experience.  In addition to offering a range of Fresh & Easy private label and national brand name products at low prices, Fresh & Easy will also offer customers a selection of fresh, prepared meals.

Fresh & Easy has gone to great lengths to ensure all its private label products contain no added trans fats, artificial colors or flavors, and have limited amounts of preservatives.  Deliveries will be made daily to each store to ensure all products are as fresh as possible.

Each Fresh & Easy store will employ approximately 20 to 30 people.  The company interviews on-site at each store location, aiming to hire from the local neighborhood.  Fresh & Easy intends all store employees will work 20 hours a week or more, and be eligible for comprehensive health care and other benefits.  Entry-level positions will pay well over the minimum wage, starting at $10 an hour in California, and offer a potential bonus of up to 10% on top.

As part of the company’s promise to be a good neighbor and steward of the environment, Fresh & Easy has committed to build LEED (Leadership in Energy and Environmental Design) certified buildings, recycle or reuse all shipping and display materials and use environmentally friendly trailers to transport food. The company also invested in California’s largest solar roof installation on its distribution center in Riverside.

In addition to these six locations, Fresh & Easy will also open stores in San Diego, Phoenix and Las Vegas by the end of the year.

Note the focus on “social responsibility” — healthy private label products, giving jobs to many people, making benefits, including health insurance, available, wages over the minimum wage, LEED-certified buildings, recycled shipping and display materials, environmentally friendly transport and solar power.

Some of this may backfire when, for example, word gets out on what percentage of a 20-hour-per-week employee’s wages would be used to purchase that “comprehensive health insurance.” Critics will start following the logic of the arguments and ask, “Why doesn’t Tesco provide full-time employment instead of 20 hours a week and, if Tesco can start at $10, surely it could start at $12 per hour.”

The Pundit just came back from doing focus groups in both the UK and the US on Social Responsibility, and the impact of the criticism will depend heavily on two things: The level of income of the customer and the degree to which the store experience is satisfactory to begin with.

If you are attending PMA, stop by our workshop on Friday at 2:45 PM, What Do Consumers Really Think About Corporate Social Responsibility? We’ll be discussing what social responsibility means and how it influences purchasing on both the trade and consumer level.