Merchandising Features / Trend Features
Retailer Profile

A Fresh Approach

December 16, 2011
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Freshness and convenience are two of the most powerful perishables revenue drivers.

Time-stressed shoppers—many of whom also are wellness-oriented—are seeking quick meal solutions that are healthy and tasty.

And such consumers are the key target of Fresh & Easy Neighborhood Market, an El Segundo, Calif.-based chain of more than 170 stores in California, Arizona and Nevada that was launched in 2006 by Hertfordshire, England-based Tesco PLC, the United Kingdom’s largest retailer.

The outlets, which are about 10,000 square feet, emphasize private-label offerings with heat-and-serve and ready-to-cook meals prevalent in the refrigerated and frozen cases. Most of the selections are aimed at singles and smaller households.

There are no in-store butchers, bakeries or delis. Prepared foods are developed at Fresh & Easy’s central kitchen and distribution center in Riverside, Calif.

The concept began taking shape after Tesco research found that U.S. consumers were shopping more frequently, visiting a greater number of outlets and seeking fresher foods that are minimally processed, noted Simon Uwins, Fresh & Easy’s former chief marketing officer.

He said the need for a chain like Fresh & Easy became apparent when many shoppers indicated that they usually buy fresh and healthy items at specialty outlets, which led the company to determine there was a need for convenience, healthier foods and lower prices.

While the chain has reportedly lost hundreds of millions of dollars since its launch, Bill Bishop, chairman of Willard Bishop LLC, a Barrington, Ill.-based retail consulting firm, says that had more to do with poor site selections and marketing than product offerings.

“Fresh & Easy has two important things shoppers look for—good quality products and low prices,” he states. “It is a spot-on concept. In today’s world, value trumps brand, as we are seeing with the growth of private label.”

He adds that there also are many more small households and, as a consequence, fewer shoppers have the motivation to cook from scratch and do a lot of meal preparation.

“Fresh & Easy is a natural market for ready-to-eat and heat-and-eat meals,” Bishop states. “But not enough shoppers understand what they do. That particular market segment is underserved and there is a greater demand for what Fresh & Easy is selling than what they are actually capturing. They are not particularly effective in getting people to understand their concept.”

Nevertheless, Tesco reports that it plans to accelerate the rate of new store openings and, with improvements to the distribution center and manufacturing campus productivity, it expects Fresh & Easy to break-even with around 300 stores rather than the 400 that was originally anticipated.

“We have a strong plan for the business to break-even towards the end of the 2012/13 financial year,” Tesco notes.

In addition to offering convenient meals, Fresh & Easy also is pushing health and quality by noting, for instance, that its chicken is fresh and never frozen and hand-trimmed with no added salt; that its milk and butter come from cows that have not been treated with the rBST hormone; and stores' prepared foods have no artificial colors, flavors or added trans fat.

Perishables departments, meanwhile, also carry a wide range of organic selections.

The products, which vary by season and are not always available in all stores, include such private label produce as apples, broccoli florets, oranges, bagged spinach, carrots, Roma tomatoes, eggplant, avocados, grape tomatoes, green beans, peaches and nectarines.

Other organic offerings include varieties of milk, eggs, yogurt, frozen vegetables, boneless/skinless chicken breast and ground beef.

Store brands also emphasize health and wellness.

Fresh & Easy private label items that carry the chain’s Eatwell brand are marketed in boxes in the frozen case that state, “No added artificial flavors or colors; no preservatives.”

In addition, the front panel of Eatwell packages list the calorie, fat, saturated fat and sodium counts.

A Fresh & Easy outlet in Scottsdale, Ariz., merchandises a variety of frozen Eatwell selections that are available in 8- to 10-ounce packages and priced at $1.99.

Offerings include Turkey Lasagna, Spaghetti with Meatballs, Three-Cheese Ziti, Chicken Alfredo, Channa Masala, Beef & Broccoli, Chicken & Vegetable Pot Stickers, Kung Pao Chicken, Sesame Chicken, Chicken Enchiladas, Santa Fe-Style Rice & Beans, Tortilla Crusted Fish, Apple Cranberry Chicken, Beef Stroganoff, and Butternut Squash Ravioli.

A smaller refrigerated Eatwell section has selections in 10- to 12-ounce packages that are priced between $4 and $5.

Varieties include Vegetable Primavera, Creamy Tomato Basil Pasta, Maple Pork Tenderloin, Bruchetta Chicken, Roasted Apple Chicken, Herbed Chicken with Garlic Kale, and Chicken Chile Verde.

Another store brand, Goodness for Kids, features child-oriented foods with cartoons on boxes.

Items in 4- to 7-ounce packages and priced at $1.99 include Quesadillas, Broccoli in Cheese Sauce, Creamy Cheese Shell Pasta, Safari Pasta Bolognese, and Whirly Curly Pasta and Beef Meatballs. Cheese Pizza sells for $3.79.

Larger-sized Goodness for Kids meals in the refrigerated case include Mini Meatballs & Pasta, Chicken Bites & Mashed Potatoes, and Macaroni & Cheese.
Almost all items in the refrigerated meat case, however, carry the Fresh & Easy brand and many are value-added.

They include Carne Asada, Lemon Pepper Turkey Tenderloins, Beef Pinwheels, Bourbon Apple Pork Chops, Tequila and Organic Chicken Breasts, Chipotle and Mango Chicken Breasts, Garlic and Herb Chicken Breasts, Adobo Beef Steaks, Beef for Fajitas, Herb Crusted Chicken Eucalopes, and Chicken and Bacon Parcels.

Value-added seafood includes Herbed Parmesan Breaded Tilapia, Lemon Pepper Breaded Tilapia, Salmon Burgers, Salmon with Brown Sugar Glaze, Salmon with Misoyaki Sauce, and Eatwell-branded Lemon Paprika Salmon.

Signage above the meat and seafood cases stress health, wellness, convenience and taste.

Messages state: “Our beef is corn fed and aged for maximum tenderness and flavor”; “USDA Choice beef. Always fresh. Never frozen. Hand-trimmed. Selected for tenderness and flavor”; “Our pork is carefully selected with no added water or hormones”; “Fresh & Easy products contain no artificial flavors, colors or added trans fats”; “Fresh & Easy chicken is trimmed by hand”; and “Our fish comes from environmentally friendly and responsibly managed fisheries ensuring the finest quality product.”

Quality also is accentuated in the produce aisle.

A large sign over Fresh & Easy-branded packaged salads notes, “Any faster and this product would get a speeding ticket.”

The sign also contains a logo that states, “24 hours,” and reports that, “Produce packs with this sticker have been packaged and shipped within 24 hours to ensure freshness.”

Indeed, the most prominent brand is “Fresh & Easy,” which dominates most sections throughout the store.

Categories include desserts, which features more than a dozen types of store-branded ice cream that are marketed in 56-ounce containers for $3.99.

Selections include Mint Chocolate Chip, Rocky Road, Butter Pecan, Pumpkin Spice, Coconut Pineapple, and Cherry Chocolate Chunk.

Other desserts include Chocolate Chip Fillookie (chocolate chip cookies with a chocolate cream center); Apple Caramel Blossoms (pastry filled with apples and topped with caramel); Pineapple Upside Down Cakes, four types of cheesecake (Lemon Swirl, Banana Toffee, Strawberry Swirl, and New York); Strawberry Layer Cake, Coconut Mousse Cake, and Carrot Cake.

Another frozen case contains many ethnic-oriented and seafood selections.

Varieties include Shrimp Shomari, Pork Pot Stickers, Shrimp and Seafood Mini Dim Sun Platter, Southwest Chicken Empanadas, Breaded Calamari Rings, Coconut Breaded Shrimp, Crab Filled Puff Pastries, Maryland Style Crab Cakes, and Tempura Shrimp.

Yet another frozen section holds packages that sit in cardboard boxes that proclaim, “Quick & Easy Meals. No added artificial flavors or colors. No preservatives.”

The items, which are sold in 10-ounce packages and priced at $1.99, include Lasagna with Meat Sauce, Cheese Ravioli, Macaroni & Cheese, Chicken Tikka Masala, Chicken Alfredo, Chicken Fettuccine, Chicken Parmesan, Sweet & Sour Chicken, Teriyaki Chicken, Stir Fry Chicken with Brown Rice, Beef Tamale with Tomatillo Chili Sauce, Ancho Chili Chicken with Cilantro Rice, and Turkey Medallion with Stuffing.

A large refrigerated section, meanwhile, contains close to 50 grab-and-go meals that are merchandised in plastic clamshell containers.

Items include Baked Ziti, Mango Chicken, Thai Style Beef Noodles, Chicken Broccoli Alfredo, Buffalo Wings, Beef Sliders, Chicken Parmesan, Shrimp Alfredo, Chicken Cacciatore, Burrito Bowls, Meatloaf & Mashed Potatoes, Breaded Chicken Tenders, Potato Gratin, Southern Fried Chicken, Popcorn Chicken, Beef Stew, Cheese Tortellini, Thai Red Curry Chicken, Kung Pao Chicken, BBQ Boneless Wings, and Thai Style Beef Noodles.

“Many shoppers, such as singles, are looking for the most convenient products to bring home and get on the table as soon as possible,” Bishop notes. “Fresh & Easy is more of a kitchen than a traditional retail store. People are looking for prepared meals.”  

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Recent Articles by Rich Mitchell - Perishables Buyer

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