Report: Tesco Revamps Fresh & Easy Advertising Model
El Segundo, Calif. Recent market research proves that Fresh & Easy shoppers are driven by price more than the chain anticipated. As a result, the chain is revamping its advertising model, according to a report in the Los Angeles Times.
Prior to the chain’s launch in Nov. 2007, Tesco conducted research to learn about the opportunities in the West Coast grocery marketplace. Shoppers not only shared their preferences, but invited Tesco representatives into their kitchens and pantries to learn “about food and shopping,” Tim Mason, head of Tesco’s U.S. business, said in the article.
Where the research failed, the report said, is that they overlooked shoppers’ garages, which housed freezers filled with meat that consumers bought in bulk when it was specially priced. Fresh & Easy did not create a model based on price discounts, “but that may have been a mistake,” he said in the article.
New research revealed that the recession and a lack of regular distribution of weekly promotions has hurt the chain. The point hit home during a focus group when a shopper revealed that he not longer shopped at the chain because he no longer received weekly fliers, the article said.
Following the meeting, “we said we had better make sure we hit everyone in the area with fliers,” Mason said.
The 113-store chain did not reveal how soon the re-emphasis on weekly fliers would begin. The chain has also pushed back its plan to expand to 200 locations for at least six months.
Wal-Mart job cuts begin
Rumors of additional layoffs at Wal-Mart circulated throughout Northwest Arkansas this morning as employees in the retailer’s information systems division and human resources group learned they were being let go. Wal-Mart spokesman David Tovar explained the jobs cuts were a continuation of announcement last week that Wal-Mart planned to eliminate 700 to 800 positions and did not represent additional cuts above that amount.
JCPenney beats 4Q earnings guidance, expects 1Q loss
PLANO, Texas JCPenney reported 2008 fourth quarter operating income of $389 million and earnings from continuing operations of 94 cents per share, compared to recent guidance for earnings to be in a range of 90 cents to 93 cents per share. For the full year, operating income was $1.13 billion, or 6.1%of sales, and earnings from continuing operations were $2.54 per share.
Total sales in the fourth quarter decreased 9.8% compared to last year, while comparable-store sales decreased 10.8%. The strongest merchandise results were in women’s apparel and family shoes and, geographically, the best performance was in the Southwest region of the country. The weakest results were in fine jewelry and in the Southeast region.
For the first quarter of 2009, JCPenney expects total sales to decrease 10% to 13% and a loss in the range of 20 cents to 30 cents per share.