Friday, November 2, 2007

Breaking News: First Fresh & Easy Market Opens A Week Early

The Fresh & Easy Neighborhood Market in Hemet, California is open for business a week before it's official grand opening date of November 8.

The sign at the Fresh & Easy in Hemet, California says "We're Open." The store is open a week before it's official grand opening date. (Photo by RL for Curbed LA blog.)

The first Fresh & Easy Neighborhood Market is open in Hemet, California, a week before the first six stores in Southern California are scheduled to open next Thursday on November, 8. Hemet is located in Southern California's desert region. (View location map here.)

Yesterday we reported here the Curbed LA blog wrote that a reader and worker at Tesco's Southern California operations told the publication the Hemet store was open and conducting a "soft opening" prior to the official grand opening on November 8.

We obtained the phone number to the Hemet store and, after calling late yesterday afternoon and in the evening and not getting an answer, called this morning and were greeted by a human voice on the other end of the line. That voice belonged to an employee of the Hemet Fresh & Easy grocery market, who confirmed for us that it indeed is open.
The store employee wouldn't tell us much more however, as he said--and we understood--he wasn't supposed to talk too much about the fact the store was open a week before it's supposed to be. The store associate did tell us the market was pretty busy despite the fact it isn't supposed to be open. The worker also said it was a good idea to open "early" so store staff could get the "kinks out" and be ready for the grand opening on November 8.

A sneak peek picture of Fresh & Easy's advertising circular. The picture was taken by LR (using a camera phone) and first published in today's edition of the Curbed LA blog.

Meanwhile, in today's Curbed LA blog, writer J. Williams has a report from a reader, RL, who visited the Hemet Fresh & Easy store today, and took the three pictures published above adn below.

RL, wasn't all that impressed with the Fresh & Easy format or the Hemet store though. He told J. Williams of Curbed LA "the best way I can think to describe the store is that it is a cross between a Trader Joe's and an old school supermarket of the 50's and 60's based on its size. Honestly, I was not that impressed, RL told J. Williams. "I don't think they really have much over TJ's, but it is great they are entering markets TJ's has thus far ignored." Trader Joe's doesn't have a store in Hemet--yet.

RL also said there were numerous employees in the Hemet Fresh & Easy, "which I assume is because they are expecting lots of curious customers" at the "soft opening," he told Curbed LA.

Curbed LA's J Williams conducted a Q&A with reader and new Fresh & Easy shopper RL, which you can read here. Among other things, RL said the produce selection wasn't extensive. It's similar to Trader Joe's in that the fruits and vegetables are a mix of bulk produce, with others sealed in bags and some in small containers, he said. RL says all of the Hemet store's checkout lines have the option of being self-serve, featuring scanners shoppers can use themselves. "But check this out," a pleased RL tells J. Williams: "They (store clerks) still bagged the items for me as I was registering them with the (self-service) scanner."

Fresh & Easy brand prepared Chicken Salad and the retailer's reusable shopping tote bag from the Hemet store. (Photo by RL, first published in today's Curbed LA blog.)

RL said he generally liked the prepared foods offerings but added what he saw in the Hemet store was fairly basic "American" fair rather than anything upscale or authentically ethnic. Of course, this is one store, and a "soft opening," and we expect Fresh & Easy will offer additional, more upscale and ethnic prepared foods along with these more basic items as more stores open and time goes on.

According to RL, the store's overall prices were reasonable, and he especially liked the 99 cent chocolate milk he purchased to have with his lunch of chicken salad and tortilla chips.

We're headed to Southern California next week to check out some or all of the six Fresh & Easy stores scheduled to open on November 8. We plan on dropping into the Hemet store a day or two prior to the 8th to check it out for ourselves. The store employee we talked to on the phone today told us they are planning some pre-grand opening events as well as the official events and promotions scheduled for November 8. We will report what we find and observe here. We're also hearing rumbles from our sources that a couple other Southern California Fresh & Easy stores may already be open, and will report on this as we obtain further information.

Tesco Offers Pre-Grand Opening Fresh & Easy Tease

Tesco officially opens its first six Fresh & Easy Neighborhood Markets in the U.S., in Southern California, next Thursday, November 8. Of course, as you know from reading the piece above, the Hemet, California store is open ("soft opening) and operating ahead of schedule.

However,with less than a week to go before the official grand opening of its first six stores in Los Angeles, Anaheim, West Covina, Upland, Arcadia and Hemet, the retailer is giving potential customers (and the media ) who can't drop into the Hemet store, a preview of its Fresh & Easy store operations, including some retail prices for selected prepared foods and grocery items.

Tesco says it will offer competitive, everyday low prices in its Fresh & Easy Markets by keeping things simple and cost-effective, despite the store's offerings of upscale, prepared foods and specialty and natural groceries, fresh produce, meats and basic groceries.

Additionally, as you can see from the items in its advertising circular from the story above, the retailer is appealing to everyday shoppers by featuring staple grocery items like Tide laundry detergent, Bounty paper towels, Colgate toothpaste, Gatorade and other basic items in its promotional circular. There's also a nod to Southern California's Hispanic shoppers, with a 99 cent feature price for Tapatio Hot Sauce, which is a staple for many Latino consumers. (At 99 cents it's a good price as well.)

To keep prices low, the grocer says it's taking an operational approach which includes labor-saving processes like using display-ready packaging for stocking its shelves, eliminating the need (and labor intensiveness) of putting products on the shelves one item at a time. All the grocery products delivered to its stores from the retailer's Riverside, California distribution Center will be in these "case-ready" ready-to-stock cartons. Tesco says all of these cartons will either be recycled or reused.

Further, all Fresh & Easy grocery markets will receive deliveries of fresh meats, produce, prepared meals and other perishables daily. Fresh products will be delivered to the stores in reusable containers. The retailer says these daily deliveries will allow for cost-cutting because there will be little or no product spoilage at store level, and inventory will be kept to "just in time" standards.

Another significant cost-cutting measure, which will allow for competitive, every day low prices, according to Tesco, is that all of the Fresh & Easy stores are being built in a way that should allow for about a 30% reduction in energy use compared to a typical-sized grocery store in the U.S.

To demonstrate what it says are its competitive, everyday low prices, Tesco released some everyday retails for a selected number of products today. Below are a few examples:

Fresh, Prepared Foods:

~Fresh & Easy brand heat & serve Mac & Cheese entree. 17oz. $2.99
~Fresh & Easy Mashed Potatoes with Cheddar Cheese and Bacon,17oz, $2.99
~Fresh & Easy Cooked, Sliced Breast of Chicken, 16oz, $4.99
~Fresh & Easy Chicken Teriyaki Bowl, 10oz, $1.99
~Fresh & Easy Field Greens Salad with Balsamic Dressing, 9oz, $1.99

Basic and Organic Grocery and Perishable Items

~Fresh & Easy Milk, gallon, $1.98
~Fresh & Easy Cage-Free Brown Eggs, 1 dozen, $1.98
~Fresh & Easy Organic Breakfast Blend Coffee, 12oz, $4.99
~Fresh & Easy Diced Tomatoes, 14.5oz can, 61 cents

As you can see, Tesco is putting a major focus on its private label Fresh & Easy brand, which is a variation on their long-time Tesco private label brands in the UK and throughout the world. Fresh & Easy stores also will carry a selection of national brand groceries, specialty, natural and organic groceries and perishables. The retailer says all of its Fresh & Easy brand food products are free of trans-fats, artificial colors and flavors, and only use preservatives "when absolutely necessary."

In addition to the six Fresh & Easy Neighborhood Markets opening in Southern California on November 8, five stores will open in the Las Vegas, Nevada metropolitan region on November 14. On November 28 a third store is set to open in Southern California's Orange County, in the city of Laguna Hills. Fresh & Easy stores will open in Arizona--as well as more in Southern California, including in San Diego, and in Nevada--before the end of the year.

We've also reported here that Tesco has secured its first location for a Fresh & Easy store in Northern California in San Jose. The retailer also is looking throughout Northern and Central California for store locations, including Bakersfield in the Central Valley, where it has a specific location picked out.

Tesco plans to have at least 100 Fresh & Easy Neighborhood Markets operating in California, Arizona and Nevada by the end of 2008.

Tesco Fresh & Easy Roundup: What Others Are Saying

Tesco's Fresh & Easy Neighborhood Markets' format and impending store openings are garnering lots of media attention. Below we bring you a few stories we found informative and interesting on the eve of the Fresh & Easy store launch:

A Second American Revolution? Maybe:
In a piece titled, Big-Headed Tesco May Start A Retail Revolution, Sarah Mahony of Marketing Daily interviews retail consultant Herb Sorenson, global scientific director of shopper insights for the firm TNS North America, about Tesco's coming to America, its Fresh & Easy format, and what impact it and the retailer may have in the U.S. Read the article here.

Tesco Raises $2 billion for U.S. Fresh & Easy Markets:
Tesco has raised $2 billion in a bond issue in the United States just a week before it launches its first U.S. retail venture--the Fresh & Easy Neighborhood Markets convenience-oriented food retailing chain. Tesco said it raised the large sum as a way to broaden its investor base in the U.S., according the the London Times.

The bond issue is Tesco's first ever in dollars rather than the British Pound. The retailer told the Times it would use the $2 billion for general purposes, including it's aggressive store building program for the Fresh & Easy chain in the U.S. Tesco has thus far said it will spend $250 million per year to develop the Fresh & Easy chain. The company has said it wants to build a $6 billion dollar-plus franchise in the U.S. with Fresh & Easy. Read more here.

(Note: As we reported here billionaire Warren Buffet is one American investor who is bullish on Tesco and Fresh & Easy. Over the last two years Buffet has been buying Tesco stock, and currently holds shares worth about $1 billion.)

Corporate Giving: Tesco Donates to Charities For Each Store Opened:
Today's Whittier News reports that Tesco will donate $1,000 to a charity chosen by store employees each time a new Fresh & Easy Neighborhood Market is opened. The first charity selected to receive a $1,000 donation is Foothill Unity Center in Arcadia, California. The Arcadia store is one of the first six set to open on November 8. Read more about the donation and the program here.

Southern California Grocers Not Standing Still For Fresh & Easy Stores
Tesco may be opening as many as 75-80 Fresh & Easy grocery markets throughout Southern California over the next two years, but that's not stopping food retailers in this highly competitive, multi-format market from going forward with building new stores and wringing every last merchandising effort out of their existing units.

Today's Los Angeles Times has a feature article that describes how food retailers like Whole Foods, Safeway (its Vons and Pavilions banner stores), Ralph's Supermarkets and Sprouts, a natural foods retailer, are building new, big upscale stores featuring lots of natural, organic, specialty and gourmet foods, in Southern California.

Chief among these grocers is Whole Foods, which will open it's largest store (at almost 80,000 square-feet) in the Western U.S. next week in Pasadena. The huge, two story store is packed with natural and organic groceries and non-foods, has three restaurants in-store, and more special lifestyle features than nearly any other store Whole Foods has built to date.

Phoenix, Arizona based Sprouts, which currently has only two stores in Southern California, plans on opening a number of new stores in the region in the next two years, in addition to its new store, which will open soon in the Orange County city of Irvine.

Grocery industry giants Safeway Stores and Ralph's (owned by Kroger Co.) have their own upscale format stores that feature fresh prepared foods, natural, organic and specialty foods, expanded perishables departments, and features like in-store cafes, upscale bakeries, wine departments and other amenities. Safeway's upscale banner is called Pavilions and Ralph's version is named Fresh Fare. You can read more here.

Fresh & Easy Central California Update:
On Saturday, October 27, we reported here that Tesco was in negotiations with a shopping center owner in Bakersfield, California to locate a Fresh & Easy Neighborhood Market in his center in this Central Valley city. Bakersfield would be the first city in California's agricultural-rich Central Valley to get a Fresh & Easy grocery market.

As we reported, the only hitch was that the shopping center wasn't zoned for retail food stores for some reason. That's changed as of yesterday, however, reports today's Bakersfield Californian newspaper. The city's Planning Commission has approved a petition from the shopping center's owner to change the center's zoning to allow retail food stores, paving the way for Tesco to locate a Fresh & Easy store there. Read more here. The Bakersfield City Council has to give final approval on the zoning change but they generally go with the Planning Commission's vote.
Bakersfield is far from an upscale city. It's a working class urban region, surrounded by rural communities. It's economy is primarily based on agriculture and services. If Tesco locates one or more Fresh & Easy markets there, it will further demonstrate the grocer's stated plans to build and operate stores in what it has called "food deserts," regions where other upscale-type grocers won't locate stores.

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