Wednesday, April 2, 2008

Retail Marketing & Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market 'Should' Be Doing Now

Last week, Tesco Neighborhood Market chief marketing officer Simon Uwins posted in his corporate blog on the Fresh & Easy website that the small-format, convenience-oriented neighborhood grocery chain was taking a "pause" in its new store opening blitz, which has found Fresh & Easy opening 59 grocery stores in Southern California, Arizona and Nevada since November, 2007. [Read about the Fresh & Easy new store "pause" or "breather" here.]

Blogs such as Fresh & Easy Buzz were the first to report on Uwins' announcement, followed by a number of UK newspapers. The U.S. business press picked-up the story starting on Monday. And yesterday and today numerous major newspapers and news services like the

Associated Press, the Los Angeles Times, San Francisco Chronicle and many others are running stories on the retailer's three month new store opening "pause." Blogs of all sorts are writing about the three month new store opening moratorium and store sales' underperformance issue as well.

Most of these news stories and features (and likely those to come the rest of this week) aren't positive for Tesco's Fresh & Easy Neighborhood Market retail venture in the USA. The new store opening "pause" is the story news peg in all of the pieces, along with reports like those we offered months ago that the 59 Fresh & Easy grocery markets opened to date are seriously underperforming in sales as compared to Tesco's internal sales targets.

Uwins and company should have better prepared for this fact, which any experienced U.S. marketer or PR professional should have known would happen. It can happen to anybody though.

The reason any professional with experience with the U.S. business press should have known how the news cycle would have played out is because of the nature of today's media. First, because the newspaper business in the U.S. is doing so poorly, newsroom budgets and staffing has been lean for the last five years or so. As a result, today's U.S. business and popular press is a reactive rather than investigative enterprise in the main.

Business reporters at America's newspapers--with some exceptions of course--tend to report and write stories based on press releases issued by corporations, or based often times on news reports they find in blogs and other alternative media sources.

For example, the business section reporters who are reporting on the Fresh & Easy "pause" yesterday and today didn't read it on Mr. Uwins' corporate blog--even though it was there for blogs like Fresh & Easy Buzz to find, which reported it last Saturday. Rather, they either discovered the news from that blog, or from the British newspapers which started reporting the story on Sunday and Monday.

As a result though, Mr. Uwins' corporate blog post--which we think was a good idea but not complete as we will explain shortly--offered a news peg for the U.S. business press to generate stories about Fresh & Easy, which hadn't been much in the news in the last month. Since the "news" is that Fresh & Easy is taking this new store opening breather, originally reported by the grocery chain's marketing chief, and that the stores have been underperforming for sometime, based on numerous reports, put the two together and you've got the news peg the publications' went with; and rightly so--it's what is news, especially in the absence of any follow-up prepared by Fresh & Easy.

Mr. Uwins and the Tesco Fresh & Easy Neighborhood Market team should have been prepared for this news cycle however--and even used it to the grocery chains marketing advantage. And, based on the responses from a Fresh & Easy Neighborhood Market spokesman to the reporters in many of these stories, there hasn't been much preparation. His quotes to date have been on the order of: 'Things are going well, the stores aren't underperforming, we don't know where this data (the sales estimates) is coming from.'

Not good. Too boilerplate. Non-responsive. Sounds too much like spin. It's not the spokesman's fault either. He can only go with what he's provided with. It's not an easy roll.

What Uwins and company should have done before publishing the "pause" news in the corporate blog (a communication we agree with) was to be ready for the media before the post was made.

What do we mean by ready?

We suggest Uwins and company should have had three stories (news pegs) prepared and locked-and-loaded for the post "pause" announcement. Remember, today's business press, and even many bloggers, are a reactive lot in most ways.

We would have prepared three "news pegs" in the following areas:

First, we would have had one concrete change to be implemented in the Fresh & Easy stores. For example, a common complaint (which happens to be true) about the stores is that they aren't localized and customized enough to the demographics and character of the neighborhoods they are located in. We would have used this post-pause announcement period to announce a major initiative in which Fresh & Easy plans to start in May bringing in a substantial number of more local food and grocery products into its stores. Neighborhood-oriented merchandising.

For example, bringing in more Southern California-produced fresh produce and specialty products for its stores in that region. There are tons of such goods produced and marketed in the region. Additionally, how about a similar initiative for the Arizona Fresh & Easy grocery stores? An announcement that the grocer will stock many more Southwestern-style food and grocery products, produced in Arizona and New Mexico, in its stores. There are lots of those available as well.

Lastly, for both regions, and Nevada, an announcement that the small-format "neighborhood" grocery chain would be increasing the amount and variety of ethnic foods it merchandises in all 59 stores--Hispanic, Asian and other ethnic foods--based on the specific demographics of a given neighborhood. It's needed.

Such an announcement, say yesterday, would have generated lots of press, which in many cases would mean positive stories along with the more negative new store opening "pause" pieces. In some cases, such an announcement (local foods are big news in the U.S. right now) would have cut-short the "pause" story news cycle for the new "local foods initiative" cycle of stories.

But, if we were in charge we wouldn't have stopped there in our pre-publishing of the "pause" strategy, for the post-pause news cycle period.

April 22, just two weeks away, is Earth Day. Numerous grocery retailers, manufacturers and marketers are planning major Earth Day green marketing or green retailing promotions and activities for the day which celebrates the earth, conservation and environmental stewardship.

We haven't heard of any plans for Earth Day from Tesco's Fresh & Easy.

Our second, "locked-and-loaded" post-pause corporate blog post news peg would have been tied to Earth Day. For example, why not an announcement from Fresh & Easy that it plans to give away thousands of free reusable, canvass grocery tote bags at its 59 stores on Earth Day. Further, that as part of this give-away promotion, it will give one dollar for every free tote bag it gives away to shoppers to local environmental groups and charities in its market areas.

Green or environmental news from retailers is big news right now.

Or, the grocery chain could even go bolder. It could follow in the footsteps of Whole Foods Market, Inc.--which beginning on April 22 (Earth Day) will no longer offer single-use, free plastic grocery bags in its 270-plus stores in the U.S., Canada and England.

Fresh & Easy could announce it's decided to offer only paper grocery bags produced from 100% post-consumer recycled paper, along with reusable grocery tote bags in its U.S. stores. In fact, such an announcement would be even more powerful if it was done in conjunction with the free reusable tote bag scheme suggested earlier.

Either way, just doing one or both, we guarantee there would be a significant batch of news stories generated on the announcement in the U.S. media. [Just Google or Yahoo Search Whole Foods plastic grocery bags to get a flavor for what we are suggesting in terms of news coverage. Also, just wait until a few days before Earth Day for the Whole Foods plastic bag self-ban stories to come flowing in.]

Just as we mentioned above about the "local foods initiative" story, one or both of these Earth Day news pegs would result in considerable positive news coverage, along with the more negative "pause" and store sales underperformance stories currently all over the pages of newspaper business sections and in online editions. Further, just as with the "local food" news peg--and even more so because both that announcement and the Earth day one would be timed to be released fairly shortly apart--the "pause" and sales underperformance story news cycle would be shortened in our analysis, experience and opinion.

Lastly, we would have one more bullet in our "pre-pause" corporate blog post/"post-pause" post-publication strategic media arsenal. We might or we might not use it right away depending on the results of our above news pegs, by the way.

This third and last strategy would be to have Fresh & Easy CEO Tim Mason and his new, soon to be number two man, U.S.-born Jeff Adams who currently is the CEO of Tesco's Tesco Lotus retail division in Thailand, issue a joint-statement saying the retailer recognizes there are some sales underperformance and other format, operations, marketing and merchandising problems with the Fresh & Easy stores, which is why as CEO Mr. Mason ordered the new store opening "pause." [Mason hasn't issued a statement or said a word on the "pause" to date. Not a good communications strategy. Further, believe it or not, the press loves it when a CEO comes out and walks-the-walk and takes charge. It hurts a little at first. But starts to feel real good soon after.]

Further, in the statement, we would have CEO Mason state that in part this is why Adams, a U.S. native, has joined the senior executive team. That he's coming in, from his highly successful run as CEO of Tesco-Lotus, to provide a fresh mind (one that was formed in the U.S.) and a new set of eyes as Fresh & Easy enters a new phase, after the amazing task of opening 59 of the small-format basic grocery and fresh foods markets in a mere 150 or so days.

Further, in the statement Adams would offer his two-cents worth, not to mention talking about how happy he is to be returning to the USA, land of his birth, to be involved with what might just be one of the most interesting grocery grocery retailing ventures in the U.S. in the last five decades, which it is. This isn't spin, it's all factual--and real.

There's an old saying in politics and political campaigning: 'If you have a problem...hang a lantern on it.' We all know the converse: most corporations and politicians (and others) get in trouble not because they address an issue or mistake head-on, but rather because they deny it or even attempt to cover it up. Like its often said about Richard Nixon's Watergate fiasco: 'It wasn't the third-rate burglary that lost Nixon the Presidency; it was the cover-up.'

We aren't suggesting Tesco is covering anything up about Fresh & Easy. Nor are we naive enough to think or suggest any corporation should fully disclose its operational difficulties (first it has to know them though) completely if it chooses not to.

What we are suggesting though is two-fold: First, as we write this, Tesco's Fresh & Easy appears to have absolutely no strategy for dealing with the mostly negative stories that are appearing mostly in the business sections of U.S. and UK newspapers this week. As we have outlined above, there exists a strategy for doing so; one that should have been in place already.

Second, Tesco's Fresh & Easy has not just an image problem, but a real retail format, operations, marketing and merchandising one. But these aren't end of the world problems. They're "fixable," especially by one of the world's most innovative and successful retailers, which Tesco is. However, to fix these problems, those in charge first have to discover them; and do so despite personal pride or hubris. The suggestions we offer are part of hanging that lantern on these problems, as well as thinking strategically when it comes to marketing and media relations.

The story, of course, is still developing. Stay tuned. By the way, with some fast-moving and nimble work, Fresh & Easy could still launch a campaign like we describe above before the week is out.

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