Unmasking L.A.’s Fresh Face
By Renee Covino
Shoppers have detected a new “neighborhood” store out West. Just who is this hyped-up retailer? Here’s a clue: It’s owned by Britain-based Tesco.
I love a good mystery, but
I never expected to find such a compelling one in the new Fresh & Easy
Neighborhood Market concept. And I’m not alone. Many analysts with
more retail wisdom than I have been stumped by how this British-owned
newcomer is catering to, and being received by, the Western U.S. market.
For starters, in roughly 10,000 sq. ft. of space, with
3,500 stock-keeping-units (SKUs), Fresh & Easy seems to take elements
from the supermarket, convenience store, organic market, and deli, and roll
them all into one. And contrary to what many expected, the ambiance and
selection is very basic, sporting “everyday low prices”
(apparently, 20% lower than a “regular” supermarket). Yet, it
is considered the new food chic way to shop.
Even before Fresh & Easy landed on U.S. soil, some
predicted that it would revolutionize American retailing. Now that
it’s here, the store has received some good and some bad reviews,
with many more of the wait-and-see variety. Why not just admit it:
We’re all a little confused by the format. The key question is, are
the customers confused?
All this speculation and industry hype is
understandable, but Fresh & Easy is a formidable player worth
investigating. After all, it’s owned by Tesco, which is not only
Britain’s largest retailer, but the third-largest in the world
(behind America’s own Wal-Mart and France’s Carrefour).
Another thing Fresh & Easy clearly has going in
its favor: it touched down on the right side (well, technically, the West
side) of the American turf. Consider these California-friendly features of
the Brit-built retailer:
Environmentally
conscious operations, including reusable, recycled plastic crate shippers
and cardboard shelf stockers (holding almost everything in the store,
including produce, in place)
Private label
brands (which make up half of the SKU count), touted loudly throughout the
store as containing “no artificial colors or flavors and no added
trans fats;” preservatives are used only when “absolutely
necessary,” according to the company
“Fresh from
the kitchen” prepared foods, all date-coded and packaged as complete
cooked meals; they include chicken fajitas and bleu cheese burgers
Lunch
“boxes” with fruit and cheese, sushi, and all kinds of
sandwiches and wraps
An aisle-long array
of wines (some made in California) and alcohol
It makes perfect sense that this Western trailblazer
was born unto Orange County and the city of Los Angeles, with its first
eight stores open as of last November. And it seems to be multiplying like
bunnies in springtime, subsequently spreading throughout Southern
California as well as the additional Western markets of Nevada and Phoenix.
There were 59 Fresh & Easy stores at press time; plans are to reach 200
by the end of the year. Tesco reports that it will invest $2 billion over
five years on its U.S. locations.
Facts aside, what would a retail journalist make of
her first Fresh & Easy experience? I had to fly out to Orange County
and rent a car to find out first-hand. In no time, I got in touch with one
of the town’s notorious traffic jams — not only on the freeway,
but right in the parking lot of my chosen Fresh & Easy store. It was
lunchtime ... and the place was packed.
Before I even got to the door, I witnessed five
“professional types” — both men and women — chowing
down on their just-purchased “fresh” and “easy”
lunches. They were standing, huddled together, off to the side of the
store. Naturally, I asked them how they liked their selections.
The reviews were all good — the sushi, the
Southwest wrap, the fruit and cheese box, and the pasta salad. But what was
that big, brown block?
“Oh, yes,” one woman told me, “I
couldn’t resist eating my dessert first.”
Upon closer inspection, I discovered it was Fresh
& Easy’s “One Huge Hunk,” the chain’s own
private-label Belgian chocolate bar. (The customer I spoke with had
selected the Belgian Milk Chocolate Bar; I later discovered there were two
other varieties: a Belgian Milk Chocolate Bar with Almonds and a Belgian
Dark Chocolate Bar). A whopping 17.64 oz. sells for a mere $3.49. And how
could you not love that hunky name?
Judging from that first impression, I started liking
this Fresh & Easy place immediately, and I hadn’t even stepped
inside.
Entering the store, I have to admit, felt foreign to
me. It was what I would have expected in some European neighborhood —
small, crowded, loud and green (the walls, that is). But I could actually
smell the freshness. I saw lots of nice, pure colors (the produce), and the
customer buzz was very enthusiastic.
Now that I had chocolate on the brain, I decided to
blow past all that was up front and fresh-food focused, and do a quick
assessment of the confection selection. We editors have our priorities,
after all.
The candy aisle was hardly that — confectionery
items shared limited space in the second-to-last row of the store with
cooking oil, pasta, baking needs and salad dressing.
Familiar with the vast specialty appeal of private
label candy at Trader Joe’s (which Fresh & Easy initially was
compared to), I found the selection to be much more limited and basic, and
not prominently dispersed throughout the store like Trader Joe’s.
There was one small house-branded candy section in one small aisle. A fancy
gourmet candy attraction, Fresh & Easy was not.
But like all good sleuths, I was willing to seek out
more and voila! —
there were, indeed, delicacies and deals to be found beyond One Huge Hunk
(which I now was clutching in the dark chocolate variety for my very own).
Fresh & Easy also offers a line of organic chocolate, including such
varieties as Dark Chocolate with Ginger. The bar packaging is basic, but
elegant enough, featuring thin vertical stripes of light and dark brown.
Beyond the bars, there are tubs and containers of
Fresh & Easy Dark and Milk Chocolate Covered Almonds, Pralines, Yogurt
Covered Raisins, etc. They come mostly in the 8-12-oz. size range, and they
vary in price from $2.58 to $4.48 (Fresh & Easy is fond of ending its
prices in “8”s). Clearly, these were good candy offerings,
despite the fact that they lay buried in the back of the store.
There also were lay-down bags of branded candies
— M&M’s, Reese’s, Nestle Crunch and the like — in the same aisle, but merchandised in
cardboard shippers (a labor-saving stocking technique for most grocery
items merchandised in the store). There were no bars or single pieces of
candy in sight.
For that, there was an impulse display, much like you
see at the checkout in most supermarkets. Fresh & Easy has a unique
self-manned checkout program (customers can get assistance or not or some
combination thereof at each station). There were magazines, candy, gum,
mints and chip bags all available in a half-wall display just before the
stations. I bypassed that and headed straight for a long, but moving, line.
I finally checked myself out, purchasing just one
confectionery item. I knew I needed to go back and make a full-assessment
of the store, not to mention pick up a real lunch. But I decided it was my
time to stand outside and scarf down a treat. It was while doing so that I
finally got a taste of how consumers could be won over by this innovative
retailer with just One Huge Hunk. Mystery solved ... for now.