Mushy peasy, Fresh and Easy

News today that the most successful supermarket chain in the UK is considering pulling out of the US. Tesco invested $1.6B in opening 200 “Fresh & Easy” stores in the western US.

You say tomato

The Financial Times reports that this has proved an “overseas misadventure” for the British grocer. Sales have disappointed. Tesco’s American dream is in tatters. The FT article highlights the cultural differences between the way consumers shop on either side of the Atlantic.

However, none of these supposed differences ring true for me. Let’s take a close look at each of the claims:

US consumers like to pick up and touch their fruit and veg, something that proved difficult with Fresh & Easy’s shrink wrapped produce.

Wrong! UK consumers are the one’s with touchy-feely habits. In my parents home town of Nantwich, Cheshire, the greengrocers display piles of potatoes, cabbage and seasonal apples in open bins on the pavement. With the exception of the minority of Americans who visit Farmer’s Markets, or who can afford Whole Foods, most supermarkets in the States are far more likely to shrink wrap “fresh” fruit and veg. That’s if you can even tell the difference between the gargantuan waxed apples and plastic-wrap in the first place.

US consumers like brands, but Tesco focused on developing its own-label range.

Not so! US consumers have driven the sale of private label foods to a respectable 18% of the overall packaged food market, according to recent reports on the $5B purchase of Ralcorp by ConAgra.

US consumers are not used to self-service checkouts in grocery chains.

Oh? While it is noticeable that UK supermarkets provide chairs for cashiers while the US makes the clerks stand (the better to look ’em in the eye?), my local Safeway store has self-service counters as an option. In Minnesota it’s even quite normal to see shoppers bag their own groceries, instead of holding up the line staring vacantly into space waiting for the clerk to perform the highly skilled bagging operation. Any store that speeds the checkout with a self-service option has my vote. Undoubtedly, my grandmother mourned the passing of the old fashioned general store where the clerk fetched everything off the shelf for you. That was then, this is now. Americans change with the times.

The US is made up of a collection of local markets; tastes differ as much from state to state as across national borders.

Triple Oh?

England has: Lancashire hot-pot, Cheshire cheese, Eccles cakes, Cornish pasties, Devon cream teas, Yorkshire pudding … all from the country the size of Oregon.

The States has: Southern fried chicken, Rocky Mountain Oysters, Wisconsin Cheddar, Boston baked beans … in a Continent the size of the whole of Western Europe.

The winner for regional cuisine is clearly America. That’s why McDonalds, TGI Friday’s, Starbucks, Wendy’s and KFC have had such a hard time serving consumers in the vast collection of intensely local markets with their distinctive tastes.

Mushy PeasOr not.

At the end of the day, any grocery chain from a country where the consumers expect to purchase Marmite and mushy peas in aisle five are going to have a difficult time selling their wares in the land of the red, white and blue.

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Tres piquant, Mr. Griffin!

Ian, I too was baffled by Fresh and Easy’s failure in this country. The points you make are spot on.

In advance of opening, the company researched local market segments by being in people’s homes and closely watching their shopping habits.

Were these families secret avatars that pulled a fast one? I think the failure was in the business model rather than cultural. It’ll make a great case study…I can’t wait to read it.

More on the Tesco “Fresh & Easy” failure from the UK Guardian newspaper which focuses on economics (e.g. mortgage downturn in Las Vegas) as much as consumer preferences for shrink-wrapped veg as a reason for failure. Odd that the FT omitted the economic underpinnings.

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