Tuesday, September 27, 2011

"It may be fresh, but it won't be easy"

Cleanup in aisle 8--Fresh and Easy CEO sold $1.3 million worth of company stock in 2008.

Fresh and Easy is at the cutting edge--of a declining trend, according to Associated Press.

Market studies cited by the Arlington, Va.-based Food Marketing Institute found only 16 percent of supermarket transactions in 2010 were done at self-checkout lanes in stores that provided the option. That's down from a high of 22 percent three years ago.

Overall, people reported being much more satisfied with their supermarket experience when they used traditional cashier-staffed lanes.

Fresh & Easy experienced significant growth problems starting a year ago when it announced that it was closing 13 stores in the Southwest. The firm, a UK firm that branched into America five years ago with fast-growth plans, recently announced it would sell off its underperforming Japanese markets. Parent Tesco has yet to turn a profit in the United States, but hopes to be profitable within two years.

Its retail practices have also been called into question by industry watchdogs such as Jim Prevor, the Perishable Pundit, who writes this in an appraisal of the deep-discount grocer's coupon policy:

The Fresh & Easy tactic smells of bait-and-switch; convince the consumers that you offer beautiful large cherries in clamshells, attract the customers in with an ad for discount cherries, and then let them see they are not discounted, they are different cherries, lousy cherries, and hope the consumers will buy your full profit item.

Maybe people with lots of free time will tolerate this treatment. But good customers, the ones who spend more freely to get what they want, when they want it, will only be attracted to a store once with this kind of shenanigan.

Whether the UK company truly understands the highly competitive American supermarket business has yet to be demonstrated. Tesco's US adventure with Fresh & Easy in the US was termed a "disaster" and "an invasion that went wrong" by the UK press as recently as two years ago.

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