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American Food & Ag Exporter

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Trip To Tesco’s Fresh & Easy Store
Reveals The Good, The Bad and The Ugly

Jim Prevor’s Perishable Pundit, December 14, 2007

On a quick trip to California, the Pundit and Mrs. Pundit visited one of Tesco’s Fresh & Easy stores “up close and personal”.

For those familiar with the Los Angeles area, we went to the store at 4211 Eagle Rock Blvd., a mixed community not too far from Occidental College. We visited the store Wednesday at lunch time.

Although we enjoy visiting stores, we rarely write about those visits. The problem is that with a large chain, it is difficult to know if what we notice is an aberration or is representative of the whole chain.

With a new chain such as Fresh & Easy you run the double burden of trying to distinguish what might be considered part of an expected “shake-down” period and what are fundamental issues in the concept.

Still, for better or worse, these were our initial thoughts:

The Good:

  1. Plenty of staff… all with excellent attitudes, very anxious to help. Although the store was rather empty, thus giving the staff plenty of time to help, they were asking customers, “Do you want me to show you how to work the self-checkout or do you want me to do it for you?” Question: Staff looked heavy for the volume of business being done. Will staff hours be cut and the friendly staff be less so?
  2. A number of very interesting products; for example, a series of items being positioned to compete with Oscar Mayer’s Lunchables — but with healthier food and at a bit higher price point.
  3. The fact that almost every produce item was in a clamshell, bag or wrapped made us feel that the product was safer — since it couldn’t easily be touched by store employees or fellow customers.
  4. Excellent range of baked goods.
  5. Many interesting sauces and whatnot to try — in that sense reminded us of Trader Joe’s.
  6. The Spartan décor and fact that everything was displayed in a shipper gave it a warehouse feel and engendered the hope we would be getting a good deal.
  7. Nice lady sampling the house brand of tiramisu, chocolate chip cookies, stuffed olives and a few other grocery items.
  8. Plenty of parking.

The Bad:

  1. The store was dead; there were more employees than customers when we were there.
  2. There is an obvious problem in all the fresh foods areas with out-of-stocks. For example, no chicken tenders in the meat and poultry department, no sliced roast beef in the self-serve deli. You could get rice but they were out of the refried beans in the prepared foods section. In produce, they were out of bagged spinach and strawberries. In Grab-and-Go, they were out of tuna salad sandwiches.
  3. When an item was still in stock, the display was often half empty, so the consumer would see several big black tubs with a lonely bag of tangerines in each one.
  4. Bananas, priced oddly at 18 cents per banana, were one of the few produce items stocked to the brim. Lots of overripe bananas — Bonita brand — plus newer bananas. Impression is the fruit hasn’t been selling and the staff doesn’t know how to properly cull the bananas.
  5. It is impossible to know the cause of the out-of-stocks. We have been told, confidentially, about a computer glitch that has caused improper orders to be sent out. It may be as simple as getting some historical data in the computer and adjusting certain assumptions. For example, although the store was out of pre-made tuna salad sandwiches, its rack overflowed with pre-made chicken salad sandwiches.
  6. It seems as if they are allowing store-level staff zero flexibility on merchandising. When the store is out of stock, nobody seems to be thinking in terms of filling up the space with anything else. If the planogram says two feet for bagged spinach and the store is out, they just keep an empty shelf there with the spinach sign.
  7. The sampling program was limited and odd. Although the sampling lady explained that the purpose was to reassure us of the taste of the Fresh & Easy branded items, we didn’t feel we needed a sample of, say, a jarred stuffed olive. We would have liked to sample some of the prepared foods and the meat and poultry items that are being sold pre-basted. We are OK with gambling with a stuffed olives, but if we are having a dinner party and are thinking of serving the nice looking chicken in their special sauce, we would like to taste that first.
  8. We found the taste of the private label products being sampled to be mediocre. The tiramisu and the chocolate chip cookie were fine — but just fine. Nothing to make us feel we must shop at Fresh & Easy to get these great items.
  9. We found the overall appearance of the store dour and cold. It didn’t really make us happy to be there. Costco is institutional looking too, but somehow the buzz, the serendipitous appearance of new products, the demos and sampling, all make Costco feel much more fun.
  10. The produce packaging was frustrating as it de facto created minimum purchase requirements. Maybe we don’t want six apricots, we only want two?
  11. The store is a little too preachy for our taste. We know our values and don’t want to be sold on a retailer’s values. The various references to sustainable, recyclable and reusable made us feel like we were being lectured to.
  12. Especially with kids, we want the brands we are accustomed to and so couldn’t see making Fresh & Easy our regular shopping haunt. The Jr. Pundit Segundo, aka Matthew, age four, likes his yogurt with Blues Clues on it, and the Jr. Pundit Primo, aka William, age six, likes his fresh-cut apple slices with Mickey Mouse. There is no upside for us in taking these little joys away from our children. The branded selection is just too small to work for us.
  13. We like a service deli. We like to tell the guy that the roast beef isn’t rare enough, please open another. We like to get a sample slice and ask the guy to make it thinner. To us, a product is fresher if we see it cut before our eyes.
  14. In some ways, Fresh & Easy is a step backward. At our supermarket in Florida, we often buy both rotisserie and fried chicken — in most cases, it is for immediate consumption and we buy it hot. We saw no fried chicken and the rotisserie chicken is sold cold and pre-packaged. Didn’t strike us as fresh or easy.
  15. The produce assortment left us having to go elsewhere. For example, the kids love Grapple apples — Fresh & Easy didn’t have them. We have another trip to make.

The Ugly:

  1. Many of the prepared items simply looked horrible. This is because curry-like items have flipped over and smeared all over the top of the plastic prepared food packages. Although we appreciate the desire to let shoppers see the food, if Fresh & Easy doesn’t have a solution to this problem, it should design a sleeve to put over the items so consumers are spared unattractive views.

It is certainly a professional store, but in the end we draw these conclusions:

  • One big advantage of the store can be the small footprint. In certain areas, this small footprint will enable Tesco to open many stores that will be conveniently located to consumers. However, the small footprint won’t help in most suburban markets as zoning restricts where stores can be built. The small stores will thus be on the same streets as supermarkets.
  • It will take time to see how pricing settles down both at Fresh & Easy and competitors, but the bare-bones interior seems likely to appeal to bargain hunters. Yet pricing does not appear to pose much of a threat to Wal-Mart, deep discounters such as Aldi, Sav-a-lot or dollar stores. There seems a little disconnect between the appeal of the store and its pricing structure.
  • As with Trader Joe’s, the success of the store will depend on the private label product. If consumers fall in love with Fresh & Easy sauces, its tiramisu or refrigerated lasagna, then the store will attract a passionate clientele for those items who will buy other items. If not, then the concept may not survive.

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