Unmasking L.A.'s Fresh Face
March 1, 2008
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.