Retail Memo Special Feature: New Multi-Supercenter and Multi-Format Strategies Are Showing Wal-Mart to Be A More Agile Grocery Retailer in the U.S.

The new Supercenter in Austin, Texas (above) isn't your 'father's' Wal-Mart Supercenter

Mega-retailer Wal-Mart may have found a solution (or two) to all the community-based opposition in many parts of the U.S. to the retailer's building of its Supercenter stores.

Last month, the brawny big-box bruiser from Bentonville (Arkansas) decided to kill 47 new Supercenter store projects it had on the books for a variety of reasons, all having to do with either opposition to the stores from city and country governments or community-based groups in the cities and neighborhoods where the respective stores were to be built.

Don't feel sorry for Wal-Mart though. The world's and United States' largest retailer will still open at least that many (47) new Supercenters in the U.S. this year, plus a handful more.

The municipal government and community-based group oppostion is a serious impediment to Wal-Mart's Supercenter growth plan in the U.S. however. But it's not a new problem. It's been going for for years.

However, what is new is Wal-Mart's response to the oppostion, which historically has only been one-dimensional: To lobby city governments and community groups, trying to change their minds, or to fight the oppostion in court.

Until now, that is.

The Modesto Supercenter Strategy

In the Central Valley city of Modesto in Northern California, Wal-Mart is gutting an old 105,000 square foot long-empty big-box retail building, which most recently was divided in half and housed a store belonging to the now gone local discount warehouse grocery chain SavMax in one half of the building and a Rite-Aid drug store in the other half.

Wal-Mart is turning the 105,000 square foot building into a scaled-down version of its Supercenter format store. The Modesto Supercenter, which is located at 3848 McHenry Blvd. a popular shopping street in the city of about 210,000, will have all the departments--fresh produce, meat, perishables, dry grocery and the like--that its larger Supercenters have, which average about 185,000 square feet and run as big as 225,000 square feet.

The only difference between the more petite Modesto Supercenter and nearly all of the retailer's other, larger Supercenters, is that those departments will be scaled down and the store's overall product selection will be a bit less expansive than in the traditional Supercenters.

To compare the size difference of this new Supercenter in Modesto to Wal-Mart's other stores of the same format, lets compare it to the retailer's Wal-Mart discount store format stores, one of which the retailer has in Modesto. That store, like all the Wal-Mart disount format stores', carries only a limited assortment of grocery products in a few aisles plus some basic frozen and perishable foods. However, it's still 115,000 square feet without the supermarket inside, which is 10,000 square feet larger than the new full food and grocery Supercenter set to open early next year on Modesto's McHenry Avenue.

The Modesto Supercenter scheduled to open early next year isn't first smaller-size Supercenter Wal-Mart has opened, nor the first it's located in an old big-box building it's gutted and completely remodeled. Last year, the retailer opened a Supercenter in Sanger, California that's just a bit larger than the Modesto store. Sanger is a suburb of Fresno and is about 100 miles south of Modesto in the southern Central Valley.

The main reason Wal-Mart is doing this Supercenter scaling-down in California, and especially in the Central Valley, is becuase the state as a whole, and the region particularly, has been one of the most difficult places in the U.S. for the mega-retailer to get approval to build it's 185,000 -to- 225,000 square foot new, from the ground-up Supercenters.

For example, Wal-Mart planned to build a roughly 200,000 square foot Supercenter in a shopping center in Modesto in 2001. However, after a couple years of rangling with the city planning commission and city council, as well as opposition from numerous small business groups, it abandoned those plans.

In 2004, Wal-Mart proposed building a brand new 225,000 Supercenter in Turlock, which is a city of about 75,000 residents located just 10 miles from Modesto. The Turlock City Council not only rejected Wal-Mart's proposal--even though the retailer already had a Wal-Mart discount store in the city and promised to keep it open along with the new Supercenter--it ended up passing a big-box ordinance which prohibited any retailer from opening a store of at least 100,000 square feet that devoted at least 5% of its floor space to grocery items.

The Supercenter ban was specifically designed to prevent Wal-Mart from locating a Supercenter in the city. However, through its language it left the door open for big box retailers like Costco Wholesale and even Wal-Mart's Sam's Club

Wal-Mart filed a law suit against the city of Turlock in February 2004, one month after the city council passed the ban legislation. The case was in the courts for two years. In 2006 the court ruled in favor of the city and Wal-Mart announced it would no longer try to build a Supercenter in the city.

Big box bans like Turlock's are common in California. Two other cities in the area, Oakdale which is next door to Modesto, and Patterson, which is about 25 minutes away from Modesto, have both passed laws similar to Turlock's, designed specifically to keep Wal-Mart Supercenters out of their respective cities.

Wal-Mart pulled the plug on a Supercenter in another nearby city in 2006, when the city of Ripon, just a few miles from Modesto, fought against the retailer's proposal to locate a Supercenter in the community. At the time the issue of contention was over where the Supercenter would be located in Ripon. Wal-Mart announced it would not build on the site but would look for a more suitable location in the city. That was two years ago and the retailer is yet to announce a site in Ripon.

Last year Wal-Mart did get approval to build a 225,000 square foot Supercenter in Ceres, which is right next door to Modesto. However, the community of about 45,000 was far from the retailer's first or second choice in the region. But since the city is aggressively seeking retail and streamlines the permit process, Wal-Mart went forward with the proposal. The Cerers Supercenter is currently being built--not without community protest of sorts--and is scheduled to open later this year.

Bay Area and SoCal also tough for Supercenters

Its not just the Central Valley that opposes Wal-Mart Supercenters so strongly. In fact, the nine county San Francisco Bay Area, which is about 90 minutes from Modesto, opposes the mega-stores as much or even more than the Valley's municipalites and communty groups.

Wal-Mart has only a couple Supercenters in the 7-million population strong Bay Area. Those stores are out in the fringes of the region where opposition and the need for tax dollars of any kind are far more desired than in the major Bay Area cities and suburbs. As a result, opposition to the Supercenters is less intense.

Try as it might, Wal-Mart has failed to build numerous new Supercenters its proposed in many of the most desirable Bay Area cities; cities where it wants to be with that format.

Wal-Mart hasn't had much better luck in the Southern California region, where more than half of California's residents live. It has some Supercenters in the region, but nowhere near the number it wants--or has tried to get approval for.

In fact, it's in Southern California where Wal-Mart has come up with phase two of its plan to open more Supercenters in the Golden State, albeit somewhat smaller than average like the Modesto and Sanger stores, and of a somewhat hybrid nature

The retailer just announced plans to add an additional 25,000 -to- 50,000 square feet on to a number of its Wal-Mart discount stores in Orange County, therby turning them into hybrid Supercenters.

According to John Mendez of Wal-Mart, the stores--like the Modesto Supercenter--will have all the same departments and sell the same food and grocery products that a standard, larger Supercenter does. The departments will just be scaled-back and have a more limited overall product assortment.

Wal-Mart's discount stores sell perishable items like milk, juice and eggs, have some frozen foods, and contain aisles where a limited assortment of grocery products is offered.

The expanded discount stores would still retain all the non-foods departments they currently have but would add a smaller-version of a full-fledged Wal-Mart Supercenter supermarket inside.

Wal-Mart becoming more agil

These two developments, along with Wal-Mart's new, small format (about 15,000 -to- 20,000 square feet) Marketside grocery markets which will make their debut this summer in the Phoenix, Arizona Metropolitan region, are showing that a mega-retailer can also be a nimble one when it comes to format adjustments and creations.

By choosing a Supercenter strategy which includes remodeling existing, smaller buildings like in Modesto and Sanger, and adding on square footage to Wal-Mart discount stores like the retailer plans to do in Orange County, Wal-Mart is showing a new adaptability after years of sticking with the single Supercenter mind set and format.

As a result, the retailer will be able to garner much more of the grocery dollar market share in states like California where the opportunity is there but the jumbo sized singular Supercenter format has proven a barrier to entry.

Additionally, the small-format Marketside stores will give Wal-mart an urban strategy for city's like San Francisco, Oakland, San Jose and Sacramento in Northern California, and Los Angeles and San Diego in Southern California, if it chooses that strategy.

For example, it's impossible for Wal-Mart to get approval, even if it found the space, to built a Supercenter in politically-charged San Francisco. However, it's likely it could get approval--with a bit of a fight still--to buildl a 15,000 -to- 20,000 square foot Marketside store, or two or four in the highly dense city.

The same is the case in urban Los Angeles and San Diego. In terms of the Modesto model of locating a Supercenter in a smaller, existing building, doing so makes it difficult for a city to stop Wal-Mart because the application and permiting process is much different than when building a new store from the ground up. Essentially, a city like Modesto can't prevent Wal-Mart from putting whatever type of store it desires in an existing building like the 105,000 square foot former combined supermarket and drug store location on McHenry Avenue, as long as it files the proper paperwork and meets existing city laws.

The same is the case for the square footage additions the retailer plans to do with some of its Orange County Wal-Mart discount stores. Should the respective cities in Orange County try to hold up or prevent Wal-Mart from adding the additional square footage to those stores, the retailer would easily win in court, since such additions are done by retailers of all types regularly, and preventing Wal-Mart alone from doing it would likely be ruled descriminatory.

Localizing and shrinking new Supercenters

Another strategy Wal-Mart is employing is to design its Supercenter to fit in with a local communities geographic location, setting, culture and history. For example, the brand new Wal-Mart Supercenter in Austin, Texas pictured at the top of this piece, sure looks a bit different than the typical Wal-Mart square, big box Supercenter, doesn't it? It's designed to fit into the more hip, upscale style that is Austin.

The retailer has designed similar "local" Supercenters in Colorado that fit in with the regions rugged mountains and woods, using different roofing and siding on the buildings, in addition to numerous other local touches. One Supercenter in Colorado even has a complete bicycle shop in the store, and Wal-Mart built and paid for bike paths and bike racks on land around the store because the communtiy is a major bicycling area.

These localization design strategies also include shrinking the Supercenters a bit if need be. Wal Mart has built a couple of the mega-stores so far that are in the 130,000 sqaure foot range rather than the average 185,000 size

Marketshare is key regardless of format

Last year, Wal-Mart overtook Kroger Co. as the number one grocery sales market share leader in the U.S. It's a close race between the two retailers though.

What Wal-Mart seems to have finally figured out with its new format flexibility as detailed in this piece, is that grocery marketshare is king, and it doesn't have to just come from a 185,000 -to- 225,000 square foot Supercenter.

In addition to putting the scaled-down Supercenters in the old bg-box buildings like the retailer is doing in Modesto and Sanger, adding the additional square footage for groceries onto the existing discount Wal-Marts in Orange County, and introducing the new, small-format Marketside grocery stores this summer in Arizona, Wal-Mart also is building more of its average 45,000 sqaure foot Neighborhood Market supermarkets this year and next than it has in many years.

This new, muti Supercenter and multi grocery store format strategy should give Wal-Mart additional market share, allowing it to increase its lead over Kroger. The main reason this should be the case is because these strategies will allow it to increase its grocery sales square footage in places like California where it currently has a minimal food and grocery retailing presence because of the inability to open any where near the number of traditional, new Supercenters it has wanted to for over a decade.

The mega-retailer plans to use it hybrid Modesto Supercenter strategy and the Orange County add-on discount store strategy in other parts of the U.S. in which gaining approval for new, built from the ground up Supercenters is a problem.

The Modesto Supercenter strategy also will be used in places like urban areas, where space is of a premium and the idea of acquiring an empty big box building and turning it into a Superstore is a good option.

Further, expect to see Wal-Mart add additional square feet on to other discount stores in other parts of the U.S. this year and beyond. Food and grocery sales are what's allowing the retailer to post strong sales and profit gains like its recently released quarterly profits.

Wal-Mart wants to be able to sell more food and grocery products in all categories in all of its stores--as well as in more places in the USA. As a result, the strategies detailed in this piece will be implemented, along with the buolding of new Supercenters, wherever the brawny big box retailer from Bentonville thinks they make sense.

Retail Format Innovation Memo: The United Kingdom's 'Best' Cybercafe Just Might Be Inside Whole Foods Market, Inc.'s Huge London Flagship Store

Austin, Texas-based supernatural grocery chain Whole Foods Market, Inc. decided to go where few American grocery chains go--overseas, and specifically to the United Kingdom--about a year ago.

Why do we say, "where few U.S. grocery chains go?"

Because it's true. American-based supermarket chains tend to be domestic rather than global enterprises, which is generally the opposite of most other large U.S. corporations, in business sectors ranging from oil and high tech, to automobiles, pharmaceuticals and agribusiness.

For example, the three-largest supermarket chains in the U.S.: Kroger Co. (about $69 billion in annual sales), SuperValu, Inc. (about 44 billion in gross sales per year) and Safeway Stores, Inc. (annual sales of about $42 billion) have no stores outside North America. In fact, Safeway is the only one of the three chains with stores in Canada. Kroger and SuperValu do all there business in the Continental U.S.

The same is the case with nearly every other American supermarket chain. Crossing the Atlantic or Pacific oceans to open stores or acquire foreign-based food retailing companies isn't the industries cup of tea.

Of course, Wal-Mart is a different animal. The world's largest retailer is just that: a global retailer. It owns the Asda chain in the UK, which is that nation's second-largest retailer after Tesco, and has operations in Asia, including Japan, India and China, and in Mexico, as well as Canada. Wal-Mart also is preparing to enter the retailing market in Russia and elsewhere globally.

Wal-Mart however isn't a supermarket retail company. Rather, it's a broadline retailer which sells everything from food and groceries, to books, electronics, garden supplies, clothes, furniture and more.

Austin, Texas-based Whole Foods Market, which also has stores in Canada, decided to break that general U.S. food and grocery retailing parochialism last year however when it opened it's huge, three-story flagship food emporium on Kensington High Street in London, England in the UK.

The store is nearly 75,000 square feet, huge by UK standards, and features an extensive selection of natural, organic and specialty fresh foods and groceries, along with natural and organic health and wellness products, a mega-natural body care department, a fresh produce department itself as big as many London supermarkets, numerous in-store restaurants, and more.

Part of that "more" is an in-store feature that's been getting raves among London's high-tech community as well as just plain folks in the cosmopolitan city which is rivaling New York City as the world's financial capital these days.

On the third-floor of the Kensington High Street Whole Foods mega-market sits a fully-equipped cyber or internet cafe. Cyber cafe's aren't a new development in London--they're located over the city. However, the Whole Foods-London flagship natural foods market's cybercafe is attractive, spacious and rapidly becoming the most popular of the many located in the urbane city.

The open-style, third-floor Whole Foods Market cyber cafe has seating for about 25 people. There are comfortable tables in the open-style cafe as well. Electrical power outlets are in abundance--and the use of the high-speed Wi-Fi internet network is completely free of charge, which isn't the case in many of London's cyber cafes.

The other thing Londoners' are loving about the cyber cafe is that unlike many located in the city, Whole Foods' third floor, in-store operation doesn't put any restriction on how much time a person spends in it using the free Wi-Fi connection. No hassles, not even dirty looks if you spend a full eight hour work day using the internet cafe's free connections and workspaces.

There's not even a restriction that cybercafe users have to purchase anything to eat or drink in order to use the facilities. However, the Whole Foods store offers such a variety of prepared foods and beverages, that one seldom sees a third-floor cyber cafe patron without food or drink of some kind while surfing the net on their laptop computers.

The store has a gourmet pizza station, sushi restaurant, a wine and cheese bar, meat and veggie grilling station, a gourmet sandwich shop, offers fresh coffees and baked goods in the cafe/pastry shop, prepares fresh-squeezed fruit juices and makes smoothies at a separate bar, and has in-store prepared foods ranging from American classics, to British foods, Indian, Thai, Japanese, Chinese and other ethnic cuisines And, this list is just for starters.

Cyber cafe patrons can purchase whatever foods they desire and take them up to the third-floor cafe. All that's missing is being able to wear ones pajamas when using the internet cafe's free high-speed Wi-Fi connections and attractive space.

The Kensington High Street flagship Whole Foods had a bit of a rocky start in the months following its opening about a year ago. However, it's gradually been winning over the stomachs and pocketbooks of Londoners, who marvel at the massive selection of food, grocery and related products the store offers. Both customer count and store sales have been climbing dramatically over the last six months, according to nearly all of the UK analysts we've talked with or who's reports of the store we've read.

In fact, business has improved so much in the last six or so months Whole Foods Market, Inc. recently hired two commercial retail real estate firms in the UK to search for additional sights in London and throughout the UK for the retailer to open more Whole Foods Market supernatural grocery stores. [Read our piece on that search here.]

the inclusion of the spacious third-floor cybercafe in the store is turning out to be a very smart and savvy move by Whole Foods. Even though it isn't a money maker, after all the Wi-Fi connection is free and cafe users aren't even required to purchase anything to use the connection and the space, it's becoming a gathering place, used regularly by everyone from local entrepreneurs and business people to students, as well as people visiting London from elsewhere on business.

We think the popular, and rapidly becoming famous, Whole Foods cyber cafe in its London flagship store is a perfect example of what grocery retailers need to do in order to create brand in a new market--and even in existing ones.

In-store features like the internet cafe also create a "sense of place" in a supermarket, which results in encouraging shoppers to linger and buy more when in the store and to return more often and become primary shoppers of that store.

Not every feature a grocer puts in its stores will be a money maker. However, features such as the Whole Foods-London third-story cyber cafe will make a grocer more money throughout the store. Not a bad trade off.

Food & Grocery Legislation Memo: California Assembly Natural Resource Committee to Consider Second Plastic Bag Bill Along With Original Today

On Friday we wrote this piece about the 25-cent per single-use plastic carrier legislation that the California State Assembly Natural Resources Committee is debating and voting on in a hearing today at the California State Capital in Sacramento.

We've learned in addition to the 25-cent per plastic grocery bag legislation authored by Assemblyman Mike Davis, D-Los Angeles, which would impose a 25-cent per-bag fee on consumers at large supermarkets and drug stores in the state starting July 1, 2009 if passed by the full Assembly and State Senate and then signed by the Governor, the Natural Resource Committee also will consider a second bill in committee today.

That bill, authored by Assemblyman Lloyd Levine, D-Sherman Oaks, would levy a 15-cent per single-use plastic carrier bag fee on shoppers as a way to discourage supermarkets and large drug stores from offering the plastic bags, as well as discouraging consumers from asking for them.

However, the 15-cent per-bag fee would only go into effect if California supermarkets and drug stores failed to meet two plastic bag-use reduction benchmarks which are a key part of the bill.

Assemblyman Levine's bill, which the Natural Resource Committee is considering along with the direct 25-cent per-bag bill, would require the state's large supermarkets and drug stores (those already in the state's mandatory in-store plastic bag recycling program) to cut their current plastic bag use by 35% by the end of 2010, and by 70% by the end of 2012. If the retailers don't meet these goals, then the 15-cent per plastic bag consumer fee would automatically kick-in and the stores would have to levy the per-bag fee to shoppers who ask for the plastic bags.

Both bills if passed would use the money collected from the per-bag consumer fees to combat plastic bag litter and further reduce consumer use of the single-use plastic carrier bags in the state, according to the language in each of the bills.

Assemblyman Davis' 25-cent per plastic bag fee bill however would allow supermarket and drug store retailers required to charge the fee to consumers to keep 3% of the total per-bag fee to be used to help recover the in-store costs that will be required to collect the fee on each plastic grocery or shopping bag requested by consumers.

Assemblyman Levine's benchmark recycling bill, with the 15-cent per-bag fee kicking-in only if the above described goals aren't met, would use all of the money collected from the per-bag consumer fees for plastic bag litter cleanup in the state, along with being used to promote recycling. There's no 3% provision for the retailers' like in the Davis bill.

Last year California enacted a law which requires all large supermarkets to place plastic bag recycling bins in their stores and to arrange with a recycling company to have the bags picked up at the stores on a regular basis. The law also required the stores to offer reusable shopping bags for sale.

According to the California Grocer's Association and the environmental group Californians Against Waste, which was heavily involved in helping to implement the in-store plastic bag recycling law, the number of plastic bags in the state being recycled since the law was enacted last year has doubled, which is a strong sign since the recycling has has been in effect for less than a year.

However, before the law went into effect the plastic bag recycling rate in the state was only 2%. So, even though it's doubled, most of those supporting one or the other of the two bag-fee bills say they're needed since even at a doubling of the recycling rate from 2% -to- 4% that means 96% of the single-use thin plastic carrier bags are still not being recycled in California.

The state government estimates about 19 billion of the single-use plastic carrier bags are used in California each year. Since only 4% are recycled, that means the majority either go into landfills, litter the state's towns and roadsides or are washed into lakes, streams and the ocean.

According to research conducted by Assemblyman Levine's Sacramento office, the plastic bags generate about 147,000 tons of trash a year in the state's dumps and landfills. Levine was the author of the mandatory in-store plastic bag recycling bill which went was implemented last year.

The Assembly Natural Resource Committee is expected to choose between the two bills by the end of the day. However, as political deliberation goes, its possible they could table the vote for a later date.

Both bills allow the supermarkets to continue offering shoppers free paper grocery bags to package their purchases in. Additionally, nearly every supermarket and many drug stores of all sizes in the state are currently selling various varieties (ranging from 99-cents each to higher) of reusable shopping tote bags in their stores.

We will keep our readers posted on the outcome of today's Assembly Natural Resource Committee hearing on the two single-use plastic carrier bag bills.

Green Retailing Memo: California State Assembly Committee to Vote on Plastic Bag-Fee Measure Monday; Many Grocer's Support Bag-Fee Legislation

On Monday (April 14) the Natural Resource Committee of the California State Legislature is set to vote on a measure that would impose a mandatory fee of 25-cents per-bag on the use of free, single-use plastic carrier bags at all grocery stores and pharmacies in the state, regardless of the stores' size.

According to the legislation, which if passed will then go to the full California State Assembly for a binding vote, the money raised by the 25-cent per single-use plastic carrier bag fee would be divided-up using a per capita formula between the state's local governments to be used for litter prevention and reduction efforts and programs.

If the bill makes it out of committee to the full California State Assembly and then passes that body with a majority vote, it would be the first statewide mandatory per-bag fee law in the United States.

There has been very little media attention in the Golden State regarding the proposed statewide 25-cent single-use plastic carrier bag legislation. This is largely because the vote on Monday is only a committee vote. While in committee, legislation can still be amended and changed, although since the bill is coming to a vote on Monday that's generally a signal the committee majority party chair (Democrat) and the ranking member (Republican) have agreed most of the amendments to the bill if any have been made and it's time for a full committee vote.

Our California state government sources tell us the chances for the 25-cent per-bag fee legislation to pass in the Natural Resource Committee on Monday are pretty good.

One interesting aspect of the proposed legislation is that to date there has been very little if any opposition from either the state's supermarket and pharmacy retailing trade associations, such as the California Grocers' Association, or individual grocery retailing chains or independents in the state.

In part this is because as we mentioned earlier, the legislation is still in committee rather than being up for a binding vote in the full state assembly.

However, that's only a small part of the reason for the lack of any significant opposition to the proposed law.

The more interesting aspect of the story is that numerous supermarket chains and independent grocers in the state agree with the 25-cent per plastic bag fee legislation, or are at least not inclined to oppose it. Part of the reason these grocery retailers might agree with the proposed statewide law is they see either outright bans or per-bag fee laws coming on a city-by-city piecemeal basis anyway.

As mentioned above, San Francisco passed a single-use plastic carrier bag law last year, which has now been in affect for about eight months. The law is limited in that only grocery stores and retail pharmacy's which operate stores over 10,000 square feet are banned from offering shoppers the free plastic bags to pack their purchases in. Department stores and mass merchandisers regardless of size are exempt from the law, as are the city's hundreds of small mom and pop grocery stores, convenience stores and green grocers, among others.

Across the Bay, the city of Oakland has passed a similar law. However it's currently in the courts because an association representing plastic grocery bag manufacturers has challenged the ordinance.

Other California city's, ranging from nearby Bay Area cities Berkeley and Palo Alto, to tiny Willits in the north coast, Davis in the Sacramento region, and Santa Monica and others in Southern California, are proposing outright bans on the single-use plastic carrier bags.

Huge Los Angeles County also is getting ready to propose legislation that would either ban the bags completely or impose a per-bag fee.

The state of California also passed a law last year which requires all supermarket chains and independents with stores over a certain square footage to place plastic grocery bag recycling bins in their stores and to sell reusable shopping totes in each store.

It's this climate which we believe is the reason there hasn't been any significant industry opposition to the proposed per-bag fee legislation thus far. In fact, numerous California grocers seem to be just fine with--and in some cases even supportive of--the proposed bag-fee law which will be voted on in committee on Monday.

Bay Area grocers voice support for per-bag fees at meeting

For example, at a meeting of grocery industry leaders and grocers held yesterday morning by the Palo Alto Chamber of Commerce in the San Francisco Bay Area city of Palo Alto, a number of grocers attending the gathering voiced their support of a single-use plastic carrier bag fee rather than seeing outright bans happen on a city-by-city piecemeal basis, which is occurring.

The city of Palo Alto is planning to implement a law on April 28 which will ban plastic grocery bags from being used in the city's 13 largest supermarkets and pharmacy's.

The grocers at yesterday's meeting said they oppose the Palo Alto plastic bag-ban. But not perhaps for the reasons you might think.

Although the grocers oppose the city ordinance, they said it isn't because they have a fondness for the single-use plastic bags. Rather, they argued since laws like the San Francisco bag ban have been implemented (some of the grocers at the meeting have stores in San Francisco as well as in Palo Alto) what they've seen is a surge in shoppers requesting paper bags, even though all of the stores are selling reusable shopping bags for as little as 99 cents each, and have even held free reusable bag giveaway events to encourage shoppers to bring their own bags to the stores.

Dave Bennett, President of local upscale supermarket chain Mollie Stone's, which has a store in San Francisco, along with a number of stores in the region, told the group since the plastic bag ban was enacted in San Francisco "our paper bag usage (in that store) has shot through the roof."

Dan Conway, the corporate director of state and local governmental affairs for supermarket chain Safeway Stores, Inc. which is headquartered in the Bay Area, said paper bags cost grocers about 10 times as much as the single-use plastic carrier bags. He didn't say if Safeway is opposing or supporting the plastic bag fee legislation set for a committee vote on Monday.

The consensus among the grocers at the Palo Alto Chamber of Commerce meeting yesterday was that they would go along with some sort of per-bag fee, including putting a surcharge on paper grocery bags as well as plastic carrier bags.

They further said they are in support of an aggressive campaign, which they would help support financially and materially, that would launch an educational program in the city, which is home to Stanford University and many high-tech companies, designed to encourage shoppers to use reusable bags, including holding frequent free reusable bag giveaway days in their stores.

The grocers, along with Tim James who is with the California Grocers Association trade organization and was at the meeting, also said they want all retailers to be included in any law which puts a fee on plastic and paper bags, not just supermarkets and pharmacies.

"Allowing consumers to use plastic bags at some stores, but not at others (types) sends a mixed message," James told the group at the meeting.

Another grocer, John Garcia of the local multi-store independent JJ&F Fine Foods, agreed with James. He said, "My personal feeling is you just make this big bang (a law imposing a fee on both plastic and paper carrier bags) and then there is no confusion. Everybody does the same thing, and it's done."

Safeway's Conway told the group instead of banning the plastic bags, the city council should create a per-bag fee scheme, perhaps indicating that Safeway will support the statewide plastic bag-fee scheme set to be voted on in the Natural Resource Committee on Monday?

"Adding a fee would literally solve the problem with single-use bags," Conway said. "You (the city of Palo Alto)would see the swiftest and most dramatic decline in single-use bags in the entire country, hands down," he added.

Other representatives of Bay Area supermarket chains and independents joined in the chorus saying they too would likely support a single-use plastic carrier bag fee like the one set to be voted on by the Natural Resource State Assembly committee on Monday.

A spokesman for upscale Bay Area-based grocery chain Andronico's Market, which has one store in Palo Alto and others located throughout the Bay Area, said he supported charging a fee for the now free plastic grocery bags.

"You (the city of Palo Alto) need to take it (plastic bag ordinance) to the next step," he said. "If we've been giving these (plastic grocery bags) away since the 1970's and not getting reuse out of them, it seems like the fee would be the most effective; you might even get national attention," he told the Palo Alto city officials who were present at the meeting.

Local independent grocer Steve Piazza, who owns the 3-store upscale Piazza's Fine Foods chain in the area, said he too would go along with a law that imposes a per-bag surcharge on the now free plastic bags, as well as on paper grocery sacks.

The city officials at the meeting, along with the grocers present as well as the local business leaders who are members of the city's Chamber of Commerce, said at the meeting they felt it was an historical morning. The grocers' commented it was the first time they could recall being able to sit down with city officials as a group and be able to give input and perhaps shape or change a policy that effects them directly.

Palo Alto is set to enact its single-use plastic carrier bag ban on April 28. The law will only ban supermarkets and pharmacies over a certain square footage from offering the free, single-use plastic carrier bags in their stores. That's why only 13 local supermarkets are affected by the ban. All other types of retailers, along with smaller grocery and convenience stores will still be able to use the single-use plastic carrier bags.

After the meeting, Phil Bobel, the city's environmental compliance manager who is responsible for making the ban happen on April 28, said he was willing to work with the grocers on the issue, and would consider recommending to his bosses in the city that the upcoming ban perhaps be postponed until September, so the city and grocers could work together on the issue.

Further, he said if the grocers' seriously supported and worked on gaining support in the next few months for a per-bag fee instead of the ban, he might consider suggesting his bosses take that matter to the city council for review before September.

After the meeting however, a number of city officials and others in the audience told us they believe the city will go forward with the single-use plastic carrier bag ban on April 24 because such a large majority of Palo Alto voters are in favor of it.

A number of these actors and observers told us it would be a good idea to impose an across the board per-bag fee for every type of retail store in the city; but not instead of the upcoming April 28 ban, but rather in addition to it.

The argument from many in the city is that these 13 largest supermarkets and pharmacies (especially the supermarkets) account for a much higher percentage of plastic carrier bag use because of the nature and volume of the businesses. As a result, they believe by starting with the largest supermarkets and pharmacies, then moving on perhaps later to other retail classes of trade, they will see an immediate decrease in litter for example, from the bigger-store plastic bag ban.

SoCal grocers not as vocal on the issue...yet

We haven't heard similar support for local or a statewide plastic carrier bag fee law from grocers in Southern California, although since numerous cities in that region have bag-ban laws set to be voted on by city councils soon, they may feel the same way as their Northern California cousins do.

Additionally, Safeway is a major supermarket industry player in Southern California (as in northern) where it operates the Vons' chain. Therefore, if California's leading grocery chain were to support the statewide bag-fee legislation in committee that would go along way to not only gaining similar support from other grocery chains but from the California Grocers Association as well.

Further, as mentioned early in this piece, Los Angeles County is working on passing a law that would impose a charge on all single-use carrier bags used by supermarkets in that highly populated Southern California county.

This means grocery chains like Vons, Ralphs and many others which have stores in Los Angeles County and in numerous other counties in the region, will be able to offer plastic bags in their stores outside Los Angeles County but not in those stores in the country. Piecemeal laws like this can cause havoc for retailers.

In addition, if many of the cities pass their own pending plastic grocery bag bans, that means the region's grocers will end up with a further piecemeal system--some stores in some counties and cities offering plastic bags, while those in the cities with the bans won't be able to.

Most of Southern California's supermarket chain and independent retail companies are likely to come to the same conclusion the grocers at yesterday morning's Palo Alto Chamber of Commerce meeting have we think: that a uniform, statewide single-use plastic carrier bag fee (of say 25 cents a bag) might be far better than either county-by-county or city-by-city outright bans or piecemeal bag fees.

Whole Foods Market to stop using plastic grocery bags on Earth Day

One major event that's going to put single-use plastic carrier bags in general, and the legislation to be voted on in committee on Monday specifically, in the spotlight in California is that on April 22, Earth Day, Austin, Texas-based Whole Foods Market, Inc. will voluntarily stop using single-use plastic carrier bags in all of its stores in the U.S., Canada and the United Kingdom.

Whole Foods' has numerous stores, and is building many more, in California. The supernatural grocer also garners lots of publicity in general in the California media, and will garner even more in the days leading up to the Earth Day self-imposed plastic bag ban.

All of Whole Foods' California stores (and most of those throughout the U.S.) are planning major events on Earth Day, including celebrating the retailer's voluntary plastic bag ban. Whole Foods stores will be giving away free reusable shopping tote bags, selling others at discount and holding major in-store promotions celebrating the earth, environmentalism and sustainability.

No other grocery chains in California have yet to announce that they, like Whole Foods, plan to stop using the single-use plastic carrier bags in their stores.

We expect Earth Day (April 22) and the days leading up to the event and after, to be a watershed moment in terms of the single-use plastic carrier bag issue internationally, nationally in the U.S., and particularly in California if the Natural Resource Committee passes the plastic bag-fee legislation on Monday and sends it to the full California Assembly for a binding vote. Even if passed by the full State Assembly, such a bill would still have to be signed by the governor in order to become law.

Further, if the bill is killed in committee on Monday, that will increase and intensify the local county and city bag-ban legislation efforts in California, which is the focus at the local level rather then per-bag fee legislation.

This story is just beginning. We will be following closely, starting with bringing you the results of the Natural Resources Committee vote on Monday.

The issue is a global one. Single-use plastic carrier bag bans are happening all over the world. Earlier this year the world's largest country, China, banned every retail store in the nation from using the bags. Other Asian countries and numerous African nations are doing the same.

Additionally, the United Kingdom's Parliament is currently debating the enactment of either an outright bag ban or a per-bag charge in that nation. Prime Minister Gordon Brown has already said he is in favor of passing either an outright ban or a per-bag fee scheme before the end of this year.

Ireland has already passed a nationwide law which puts a charge on every single-use plastic bag used by every retailer in that country. The law has been in effect for about two years. The country's government says plastic bag use has been reduced by nearly 90% since the law was passed.

The European Union is discussing a nationwide ban or bag-fee scheme as well. In addition, there is legislation pending in Australia on either a ban of per-bag fee, as there is elsewhere in the world. It's a global issue--and it's heating up.

If the California 25-cent per bag fee legislation does pass, it will have global influence. Not only is California the largest state in the U.S., but it has the world's fifth-largest gross domestic product, which makes its economy even bigger than those of a number of European nations.

The state also is a trend setter in the grocery industry. If the Golden State's grocers and grocery trade associations do support the bag fee legislation, that could open the door for grocers all over the U.S.--and elsewhere like the UK--to do the same. Stay tuned. We will be.

Marketing Memo: Marketer is 'Dancing Close to the Edge' With its Postioning of the Super-Strong Breath Mint 'Antipoleeze'

Move over "curiously strong" Altoids, A Brooklyn, New York-based division of a Swiss company named RNY Group recently introduced a new breath mint it says will eliminate bad breath odors caused by alcohol, smoking and food.

The super-strong bad breath-elimination mint is made in Switzerland and in being sold under the interesting name of "AntiPoleez" (yes, as in police). The product's package features a picture of an attractive blonde-haired woman in a police uniform, tipping the brim of her policewoman's cap, with the name of the brand, "AnitiPoleez" right below. To the immediate right of the brand name is the subheading "Eliminates alcohol and tobacco breath."

Although the booze-breath-busting mints were only recently introduced, and are currently being sold primarily online through the company's website and in a few bars, restaurants, convenience and grocery stores in the East Coast and a few other parts of the U.S., critics of the product are starting to emerge.

These critics are saying the product's name and how it's being marketed (see our description of the package above) could lead consumers to believe they can drink, take the mints, and then pass a roadside alcohol breath test if stopped by a police officer for suspected driving while intoxicated.

The critics also say the product and its marketing positioning might promote alcohol abuse and smoking, especially among underage kids who when they discover the booze and tobacco breath-busting mints could feel its the solution to covering-up such behaviors as drinking and smoking from parents.

RNY Group, the marketers of "AntiPoleez," say the above concerns don't reflect the intention of the company or its marketing positioning for the new super-strong breath mint line, despite the product name and picture of the sexy policewoman on the package.

On its "AntiPoleez" website--which offers a brief background about the product and merchandises a number of different packaging options for the super-strong breath mints, including the 48-serving "Fiesta Pack" ($14.99) and the even larger 96-serving "Frat Pack" ($28.99)--the company has a constantly moving banner which reads: "Don't Drink and Drive," as a disclaimer.

The website's home page also has two boxes containing text, one which explains how the super-strong breath mints work, and the other explaining what the booze and cigarette breath-busting product is for. There is no direct mention on the website about using the mints to mask alcohol breath while driving.

The corporate story is that the president of Switzerland-based RNY Group needed a solution to a personal breath problem. That problem is he likes to drink alcohol. However, his girlfriend is totally against it. Therefore, he created the super-strong breath mints as the solution, allowing him to enjoy his drinks but mask the odor when he's around her. There's no mention about whether or not the scheme worked.

The "AntiPoleeze" brand mints contain a mixture of various sweeteners and ammonium chloride, which is perhaps the product's secret alcohol and tobacco breath-busting ingredient.

the company claims (and offers to give consumers their money back if they disagree) the super-strong breath mints don't just mask food, tobacco and alcohol breath odors, but eliminate them, based on the combination of ingredients contained in the breath mints.

The company's marketing message with the breath mints is clear: They will "eliminate" the smell of alcohol on a person's breath. The elimination of cigarette and food odors is secondary.

Further, the picture of the attractive blond dressed in a police uniform on the package--along with the name of the product itself--sends a clear message as to what the primary use of "AntiPoleeze" breath mints is: to eliminate that boozy-breath smell in general and also so the cops won't smell it on you if you get stopped.

As far as we know, and we did ask a lawyer friend, the company is doing nothing illegal in its marketing of the product. Unethical? Perhaps? Dangerous? Maybe? We leave that up to our readers to decide for yourselves. We do however believe from a marketing standpoint the company is dancing dangerously on the edge in terms of the breath mints positioning.

The name of the breath mints largest packaging offering, the "Frat Pack," also sends a clear signal to college students that they're part of the target market. Although we always thought having a slight alcohol-tainted breath was somewhat of a rite of passage for college students. By the way, we've heard the super-strong mints are beginning to gain a consumer base among students at a number of New York City colleges and Universities.

Even though "AntiPoleeze" currently has only limited distribution--something the company is trying to change by searching for distributors who will gain distribution in more convenience stores, supermarkets, drug stores and other retail venues--we think the controversy over the product and its marketing positioning also is just getting started.

We anticipate perhaps you will soon be hearing from the group Mothers Against Drunk Driving on the use of the mints to mask alcohol breath and driving issue, police departments and associations, conservative political groups and others, once the product starts to gain increased publicity and awareness.

Of course, the fact is consumers can always use a better breath mint in general. It's not just alcohol and tobacco breath that's a problem, is it? If the "AntiPoleeze" breath mints work as good as the makers and marketers say, they might just be missing a far bigger market, which are the hundreds of millions of Americans and others across the globe who just want to eliminate bad breath in general, and have yet to find a breath mint on the market that does so to the degree they desire.

Think about it. In marketing, sometimes positioning a product as too niche-oriented can lead to less rather than more sales. In the case of bad breath--and solutions to the problem--consumers from all social, economic and ethnic groups see it as a problem and spend lots of money every year trying to solve it.

In other words, consumers in mass are constantly looking for "the next new thing" in bad breath solutions. If "AntiPoleez" is that better solution, we think the marketer might want to consider broadening its market positioning for the product.

After all, when was the last time you heard anybody say they felt their breath was perfect?

Wine, Beer & Spirits Memo: Organic and Biodynamic Swiss Beer Vollmond is Only Brewed When There's A Full Moon

Appenzell, in North Eastern Switzerland, is a picture-perfect rural setting. There are rolling hills with steep mountains in the background. The region contains scores of neatly-tended small farms, along with postcard-perfect wooden Swiss chalets, each with its own well-manicured flower beds and vegetable gardens.

The town (or canton as the Swiss call it) is the smallest of all the cantons in the area. Important civic decisions aren't decided by a city council in Appenzell. Rather, if you can believe it, such matters are decided by an assembly of the canton's residents in the town square, who then vote on the issue at hand by just that: a show of hands. The vote wins the day.

The North-Eastern canton of Appenzell also has a recent history of gender discrimination and is very masculine in its approach to most things. For example, the canton's official seal is a huge coat of arms depicting a giant and ferocious black bear, sporting...a massive erection. Yes, that type of erection, we kid you not.

Further, the tiny Swiss canton of Appenzell was, until 1991, a bit behind the times in gender equality as well--to say the least. It was only in 1991 that the woman of Appenzell were allowed a vote during those town square majority takes-all hand raising votes.

With this bit of background about tiny, rural Appenzell, it shouldn't surprise those who have read thus far then to learn that one of the dominant enterprises in the male-dominated culture of the Swiss canton is beer (beir) making.

But, not just regular old beer making mind you. Rather, Appenzell is home to an artisanal beer called Vollmond, made by the Locher family brewery. Vollmond beer is produced using 100% organic hops, barley and yeast, along with pure spring water from a local natural mountain spring.

but that's not all...The organic and biodynamically-produced Vollmond beer (beir) also is only brewed when there is a FULL MOON. (Notice the dog barking at the moon on the beer's label at left.)

Yes, you read that last sentence correctly.

So, why brew Vollmond beer only when there's a full moon? And isn't that form of production difficult in terms of inventory control? You know, Meeting supply with demand and all that logistical stuff.

Well, listen to the explanation Karl Locher, the owner and president of the Locher family brewery which produces Vollman, has for the full moon-only brewing process, and you will soon learn the reasons why it's essential to the process:

"The moon is like a watch," Locher says. "It doesn't make time, it marks time, telling us when to do something, such as eat or sleep. It governs the tides and the way things grow. I cut my hair, for example, on a waxing full moon. There's simply a right time to so everything," entrepreneur and brew master Locher says.

See what we mean? Absolutely essential and integral to the biodynamic process:)

Among the unique aspects of the organic ingredients that go into the full moon only-brewed beer is the fact the barley that goes into Vollmond beer is grow at an altitude of nearly 5,300 feet. As a result, this "sky high" barley crop has no need for fungicides because the insects and other pests die at that altitude.

Appenzell and Locher's isn't famous just for its Vollmond beer. In fact, the tiny canton--and Locher's --is so famous for the premium quality beers it produces it has it's own appellation: Beers produced in the canton are called Appenzeller beer.

Locher family brewery also produces such beer varieties as Weizenbier (wheat beer), malty-tasting, oak-aged Holzfassbier, Schnuggebock, which is a unique beer infused with pine needles, a chestnut-flavored beer named Castegna, and last but far from least, the brewery's famous Hanfblute, which is a beer made from hemp.

Regarding the latter specialty beer, Karl Locher says it happens to be one of the brewery's current best selling specialty varieties, among the many it produces.

"Our customers love it for its soporific, relaxing, health-inducing qualities," he says with only a slight grin. "In fact," Lochner adds, "insomniacs absolutely crave it."

Least you think because the Locher family brewery is located in the smallest canon among lots of generally small canons in North-Eastern Switzerland, and as a result is merely a tiny mom and pop brewery, think again dear readers.

It's currently either the third (depending if you count Heineken and Carlsburg) or the fifth-largest brewery in Switzerland. Locher produced about 1.54 million gallons of its various varieties of beer last year.

Not only is the brewery one of the country's largest today, but it's believed to be the nation's oldest as well. Karl Locher's distant relatives bought the Appenzell canton-brewery in 1886. It's been operating continuously since then. He and his cousin Raphael are the fifth generation of the family to operate and make beer at the brewery.

Further, Karl Locher says he has evidence and documentation the brewery was in operation as far back as 1712, which would make it far and away the oldest established brewery in the nation.

The tiny canon of Appenzell, with its pristine farms, rolling hills and lush green pastures, is famous for artisanal foods as well as the fresh-brewed products made at its famous Locher brewery.

For example, dairy farming is one popular form of agriculture in the region. As a result, because of the abundant supply of fresh, high-quality milk available, Appenzell has become a famed center of artisanal cheese making.

Appenzeller cheese, which is produced in small batches by numerous entrepreneurs in the canton, is considered one of the best artisanal cheeses, not just in Switzerland, but throughout Europe and in the U.S. as well.

Additionally, because of the rural and agrarian nature of the region (including lots of organic, sustainable and biodynamic-based farming) numerous other foodstuffs are produced in Appenzeller and the general area by small, quality-minded artisanal food producers.

Unlike Karl Locher and his team at the brewery however, who only make Vollmond beer when there's a full moon, these other quality food producers prefer to work primarily during daylight hours.

Vollmond organic and full moon only-brewed beer is being marketed in the United Kingdom and other parts of Europe, as well as in Switzerland. We're told it should hit the United States soon, if it's not currently already in the states at limited retail outlets in limited quantities.

One of the beer's distributors in the UK is that country's division of U.S.-based (St. Augustine, Florida) Tree of Life, Inc., which has distribution facilities located throughout the United States. Vollmond beer is primarily being distributed by natural and health food distributors in Europe. Tree of Life is owned by the Dutch food company Royal Wessanen NV, which also distributes natural and specialty foods and beverages throughout Europe.

As they say in Appenzell: By the light, by the light...of the silvery moon...We will drink, we will swoon. And, if you drink too much "full moon only-brewed" Vollmond beer tonight...We won't see you tomorrow until at least noon.

Retail Marketing & Public Relations Memo: Was Tesco's Fresh & Easy Neigborhood Market 'Listening' to Our April 2 Memo?

NSFM Editors Note: Below is a Tesco Fresh & Easy Neighborhood Market corporate press release distributed by PR Newswire. It just landed in our email box a couple minutes ago (April 8, 2008)

We suggest you read the press release which we've reproduced in its entirerty below. Then read our piece, "Retail Marketing & Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market 'Should' Be Doing Now," which we wrote six days ago on April 2, 2008, and have reproduced directly below the Tesco Fresh & Easy corporate press release. First the Fresh & Easy press release below:

Fresh & Easy to Give Away Free 'Bag For Life' For Earth Day

Grocer offers free reusable bags on April 22nd

EL SEGUNDO, Calif., April 8, 2008 /PRNewswire/ -- In celebration of Earth Day, Fresh & Easy Neighborhood Market today announced its 61 stores will bag groceries with free reusable "bags for life" for customers on April 22nd. The company encourages customers to reuse these bags and lessen their impact on the environment.

(Photo: http://www.newscom.com/cgi-bin/prnh/20080408/AQTU198.)

Fresh & Easy offers its customers two different types of reusable bags, including a $2.50 canvas bag and a plastic reusable "bag for life," which retails for $.20. The "bag for life" is larger and more durable than standard grocery bag and, if damaged, Fresh & Easy will replace the bag for free, forever. These bags are made with recycled material and are 100% recyclable.

"We want to make it easier for our customers to make more environmentally friendly decisions," said Tim Mason, Fresh & Easy CEO. "If everyone in the neighborhood shops with reusable bags, we can really make a difference."

Fresh & Easy has made a considerable effort to be a good neighbor and steward of the environment. For example, the company only sells energy efficient light bulbs, uses LED lighting in external signs and freezer cases, offers plastic, aluminum and glass recycling, and provides preferred parking for hybrid vehicles.

More broadly, Fresh & Easy has committed to build LEED (Leadership in Energy and Environmental Design) certified buildings and voluntarily joined the California Climate Action Registry to disclose its greenhouse gas emissions. At its distribution center in Riverside the company invested $13 million in a solar roof installation, which is one of California's largest
at 500,000 sq. ft.

More information regarding Fresh & Easy Neighborhood Market can be
found at http://www.freshandeasy.com/.

###

Below is our April 2, 2008 piece. Please pay special attention to the text highlighted in green.

Retail Marketing & Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market 'Should' Be Doing Now.
By Natural~Specialty Foods Memo: April 2, 2008

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, Fresh & Easy has not just an image problem, but a real retail format, operations, marketing and merchandising one as well. 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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NSFM Editor's Note: We think Fresh & Easy's Earth Day-themed resusable "bags for life" giveaway is a decent first step towrds the comprehensive program we outlined above in our April 2 piece--if it's followed up rapidly with more action.

Although the "freebie" Earth Day reusable carrier bags aren't the canvass type (or even the type we describe below which Fresh & Easy should sell in addition to the two types of reusable carrier bags it already sells), but rather the cheap, 20 cent bags--it's still something--and far better than no giveaway at all.

Further, the fact Fresh & Easy will replace these free "bags for life" (hence their name) as part of the promotion is fantastic. An excellent concept in our opinion. Why? It offers a good deal for consumers, as well as suggesting in a small way Fresh & Easy wants you to be our customer "for life." Lots of little things designed to create primary shoppers can add up to a "big thing"-- eventually gaining more primary shoppers.

[Note to Fresh & Easy: Supermarket chains all over the U.S.--and Wal-Mart and target too--are selling very attractive reusable carrier bags made out of a light cloth material for 99 cents or one dollar each. Check out Wal-Mart's current advertising circular, for example. There is a picture of its dollar reusable shopping bag in the promo flier

In terms of the type of plan and program we laid out for Fresh & Easy in our April 2 piece, there's much more for the retailer to do to make it an overall comprehensive plan. Good starts become better with the next step.

By the way, we aren't suggesting causality between our April 2, 2008 piece and tonight's (April 8) press release from Tesco's Fresh & Easy. We were trained in the scientific method far to well to think that "correlation equals causality."