Fresh Takes on Food
As we begin the new year, let me suggest a central lesson from last year that all retailers—especially food retailers—ought to carry into 2008:
There is more than one way to define “fresh” and “easy.”
During the last couple of months of 2007, it seemed that much of the retail world was captivated by British retailer Tesco’s opening of its first stores in the United States—Fresh&Easy Neighborhood Markets, which have been rolling out across Southern California, Arizona and Nevada. Several hundred are planned in the short term, with some experts suggesting that if they are successful, there could be thousands of these things around the country in just a few years.
To be sure, the new Tesco stores are unique and innovative, especially for the U.S. marketplace. But they also reflect a very specific view of the marketplace, one that—while entirely valid—certainly isn’t the only way to approach the same basic consumer needs.
The Tesco vision is, in some ways, consistent with the one used by the company to dominate the U.K. market, where close to a third of all grocery dollars are spent in Tesco stores. Rather than being a repository for other company’s brands, the Tesco brand—or, in the United States, the Fresh&Easy brand—is front and center. More than 50% of the products are private label, and I would guess that as consumers get used to this approach, that percentage is almost certain to go up. At the same time, the grocery selection is tightly edited—there aren’t numerous sizes of a wide variety of brands. In rice, for example, there is one size of “boil in a bag” white rice, and one size of “boil in a bag” brown rice. Both are private label. And that’s pretty much it.
That covers the “and easy” part. But what so far has proven to be disappointing about Tesco’s U.S. stores is that I’m not sure they’ve gotten the “fresh” part right—too many people with whom I have spoken have found the prepared ready-to-heat meals to be mediocre in taste, which can kill any consumer buzz that might have translated into a kind of advocacy for the Fresh&Easy concept. Now, I’m not giving up on Tesco. Almost certainly, this is just the first iteration of the Fresh&Easy format, and the company is trying something different—a small-store (10,000 sq. ft. to 15,000 sq. ft.) format that redefines what convenience means. All by itself, that is a notable effort, and I’m eager to see how it evolves.
However, at about the same time as the Fresh&Easy stores were opening on the West Coast, Delhaize-owned Hannaford Supermarkets in New England was putting its own distinctive spin on what “fresh” and “easy” can mean to consumers with a new, 35,000-sq.-ft. store in Dover, N.H.
The first thing that customers see when walking in the front door is a large display case featuring Hanna-ford’s “Cooking School To Go” program. Hannaford has pre-cut and pre-measured every ingredient that goes into more than 50 recipes, and rotates them through the case on a regular basis so that consumers never get bored. And not only are the ingredients pre-measured—right down to a teaspoon of canola oil or a quarter teaspoon of cumin—but they are packaged in small, numbered containers that make it elementary for virtually anyone to follow the directions. They are sold in meals-for-two and meals-for-four packaging, at $12 and $20 respectively.
And here’s the really important thing—they taste great. Not at all “lowest common denominator” food, the chipotle sirloin fajitas that we brought home and cooked up were sharp and tangy, and clearly established what the possibilities are when a store really wants to make a fresh product easy to use.
The store has been remerchandised so that “family groupings” of products are used wherever possible. This means that within almost every category, everything is integrated—you can find chilled, gourmet, organic, ethnic, bulk and mainstream versions of almost all items grouped together, with chilled cases scattered throughout the aisles to make it easy for customers to find things. Adjacencies also are taken very seriously. When was the last time you were in a store that had the cream and half and half located right next to the coffee section?
Of course, this may take a little time to get used to—one customer couldn’t figure out where the granola bars were, only to be pleasantly surprised when a staffer told her that they were located right next to the bulk granola. Go figure.
And then there is the front end, which redefines the notion of “easy.”
To begin with, there is a single bank-style line that feeds into the five checkout lanes; it is early yet, but from all indications it seems to be moving traffic exceedingly well. But the big idea answers the age-old problem of how to make it easier for high-volume customers to check out. In most stores, it is the people with a few items who get the express treatment—but not at this new Hannaford store.
Here, customers with 25 items or more are able to use the “Go Cart Curb Service.” They simply leave the cart with store employees, who scan the groceries, bag them and then carry them out to the customer’s car, which the shopper can drive up to a covered bay. The customer can use a wireless unit to pay for the groceries, and drive away.
During the opening week, shoppers could be seen grinning in dis-belief at being offered this service—and they all agreed to use it. And, one can expect that a lot of shoppers will look to buy extra products just to qualify for the Go Cart service—which is all good news for Hannaford.
This isn’t to suggest that the Delhaize/Hannaford approach is right, and that the Tesco/Fresh&Easy approach is wrong. Far from it. They are two distinct and entirely legitimate views of what consumers mean when they talk about “fresh” and “easy,” and I won’t be at all surprised if both visions work and continue to evolve.
In doing so, they set out the central challenge for their competitors and brethren—to continue to be innovative, to look for new solutions for old problems, and to define the food-shopping experience in entirely new ways.
Kevin Coupe is the founder and “Content Guy” ofMorningNewsBeat.com , Darien, Conn., [email protected] .
Borders to offer free resolution workshops
ANN ARBOR, Mich. Borders said Thursday that it is offering customers free in store events throughout the month of January to help them kick start their new year’s resolutions and learn how to keep them through the year. Programs include wellness fairs, yoga classes and diet seminars.
Borders reported that local organizations and community groups will be featured in activities and events at its stores across the country ranging from fitness centers and hospitals to singles groups and retirement centers.
Schulze sells 440K shares of company stock
MINNEAPOLIS Best Buy chairman and founder Richard Schulze sold 440,000 shares of Best Buy stock last week valued at $22.4 million. Schulze sold the stock at prices ranging from $50.71 to $51.18 per share. Earlier this month, Schulze sold 2.35 million shares valued at more than $120 million.
While Schulze’s stock sales are considerable, they represent just a fraction of his holdings at Best Buy. He’s estimated to still hold more than 68 million shares of stock amassed during 41 years with the company.