STORES Magazine - April 2008 - (Page 38)

EXECUTIVE SUITE / GROCERY Food for Thought Early returns show Tesco’s U.S. entry is fresh, but not everything has been easy BY LEN LEWIS CEO Chris Ohlinger, whose firm also interviewed eight supermarket executives who had visited the stores. “They all felt it would not be a threat because it was a convenience store. Unfortunately for them, over 50 percent of consumers view Fresh & Easy as an actual supermarket.” Tesco officials have said they plan to invest more than $2 billion in the concept over the next esco’s Fresh & Easy Neighborhood Market, which generated more pre-opening publicity than just about any other concept in the history of the supermarket segment, has met with encouraging consumer response and fairly good grades when compared with both convenience stores and supermarkets. But the chain will need to re-evaluate product variety, pricing and even store hours to become a financial success, according to a customer survey. T SIRS, a Fort Mitchell, Ky.based marketing and research firm, interviewed about 300 primary food shoppers at the first Fresh & Easy store, in Hemet, Calif., about 10 weeks after it was opened. (As of late February, Tesco has about 55 Fresh & Easy stores in Southern California, Arizona and Nevada.) The survey results are “going to surprise a lot of traditional retail food people,” says SIRS 38 STORES / APRIL 2008 five years. However, “Fresh &Easy is in the process of really redefining how people shop and the people who are shopping the store like it. The concept really dominates when compared with other convenience stores and is in the ballpark when it competes against traditional supermarkets,” says Ohlinger, citing consumer comments. Fresh & Easy rates strongly in several major measures — convenience, overall as a place to shop, perishables and people. And, while it doesn’t excel in price, it does perform well in terms of total value; respondents cited the time-saving factor of a 10,000-sq.-ft. store. Fresh & Easy also received high scores in the area of trust — even though customers were not that familiar with the name or even that of its parent company. “The concept really dominates when “It’s amazing because they have compared with other convenience a lot of private label and this can be a difficult sell in terms of stores and is in the ballpark when trust,” Ohlinger says. “Frankly, it competes against traditional trust is something very few retailers have as a strength.” supermarkets.” — Chris Ohlinger, SIRS WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - April 2008

STORES Magazine - April 2008 Contents Executive Editor's Page President's Page More Retailers Bagging Monthly Comp-Store Reports Time-Warner Center's Economy-Defying Results What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Eating Locally Grocery Concept2Watch Restaurants Online Services Marketing Human Resources Product Lifecycle Management E-Commerce: Peer Reviews Drive Online Buyers Kiosks Recycling Operations Payment Systems POS Logistics E-Commerce: Getting Personal Website Management LOEB Retail Letter Arts Update Point of View NRF News Retail Industry Calendar Last Laugh

STORES Magazine - April 2008

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