Tesco Covets the Cost Conscious, So Fresh & Easy Bulks Up Bargains

(MoneyWatch)  Fresh & Easy is bulking up its bargain initiatives in support of the 98-cent Produce Pack program it launched to offer value-conscious consumers an inexpensive alternative to canned and frozen fruits and vegetables.

In a suburban Phoenix store visited earlier this week, the produce pack display was positioned adjacent to the front door at the head of the produce department. It greeted shoppers entering the store with a choice of mango, red seedless grapes, red peppers, lemons and oranges in 98-cent designations ?€" ranging from individual mangoes to bagged bunches of grapes -- so they could pick and choose the bargains they favored. Clearly, Fresh & Easy has positioned the 98-cent Produce Packs to be a bargain that will stick in the customer's mind and convince one and all that it offers a better alternative to canned and frozen fruits and vegetables even for those keeping tight hold of money these days.

Yet, the Phoenix Fresh & Easy had more bargains in store. Parked next to the 98-cent Produce Packs set was a display of clementines, potatoes and organic apples under signage declaring: extra low prices. At the other end of the aisle was a bulk bin of low-priced navel oranges. In the last case, it appeared that Fresh & Easy had made a special purchases of an item available for a good price that it could push through the store to underline the message it was delivering with the 98-cent Produce Packs, that consumers can eat fresh just as inexpensively as processed.

When the recession worsened late last year, the retailer saw evidence that customers were turning to frozen and canned produce to save money. The development did not bode well for Fresh & Easy. The name says it all. The Tesco store concept was designed to sell high-quality fresh food, much of it natural and organic, from convenient locations at affordable prices. If consumers turned to processed products for extra savings in the recession, Fresh & Easy would be at a disadvantage to food retailers with a reputation for value grocery and frozen products, and not just big destination operators like Wal-Mart and Costco, but small, simple to shop, conveniently located stores including Save-A-Lot, Aldi and Aldi's more flamboyant sibling, Trader Joe's. Hence, the expansion of bargain fresh fruits and veggies.