"Arrogant" is probably about the worst invective you could throw at anyone purporting to be in the business of building brands. After all, creating a brand is supposed to be premised on supreme respect for your customers. But, shockingly, "arrogant" is the adjective-of-choice Richard Guha and Kevin Price applied to Tesco's long-anticipated entry into the U.S. market with its Fresh & Easy Neighborhood Markets.
"Tesco would have done better to have copied from Trader Joe's and simply updated and improved," say Richard and Kevin in an analysis posted (here) on their website. "Sadly, the company seems to have had an attitude of arrogance and decided to show the unwashed colonials the benefits of civilization, which will backfire."
Yowch. I haven't had the opportunity to visit a Fresh & Easy store yet (I live on the East Coast and apparently the Brits decided they might have better luck if they launched their attack from the West Coast this time). But I know Richard and Kevin, and don't doubt the sincerity of their opinions. They were just as excited as I was before the stores opened that Tesco was going to bring something truly remarkable to our shores -- a small-format grocery store, with high quality goods, at reasonable prices, with excellent customer service.
That expectation was based on Tesco's outstanding reputation in the U.K., as well as its extensive research into the American market before it opened its doors. Tesco's C.M.O., Simon Uwins told me all about it in an interview in The Hub late last summer:
"I've been into countless homes over the last couple of years," he told me. "I'm a great fan of what you would generally call ethnographic research. I think it gives you far more insight than just doing the more traditional sort of focus-group research. In the end, it manages to combine two things -- what people say, and then looking around in their pantries and refrigerators you actually see what they are really buying. That allows you to have a much deeper conversation with them."
He also said this: "We very much believe that everyone is welcome at Fresh & Easy. That's a basic belief of our business -- that we should love everybody." (full interview here)
That doesn't sound like arrogance at all; it sounds like a really enlightened view of peace, love and understanding at retail. Richard and Kevin describe a litany of issues, however, up to and including "bare steel shelves," "cracked concrete floors", "a lack of distinctive, interesting prepared fresh foods," and a general lack of asthetics in product packaging. They describe thes store's logo as "muddy" and the packaged meat as looking "swollen." Yuck-o.
Their take: "While Tesco may have spoken about researching the market, it has clearly gone in with a set of unshakeable assumptions which management did not even realize they had. The UK heritage in the stores is clear, but they seem to have transferred that from the UK which is unattractive to US consumers and not that which would be. They have ended up with a store which would be as unappealing to UK consumers as US ones, albeit for different reasons."
It may be a bit too harsh to accuse Tesco of arrogance, exactly, but it does sound like some very serious mistakes have been made with its Fresh & Easy venture. Given the allure of Tesco's original promise -- a store that fills a gaping void in the American grocery landscape, my hope is that they will correct their course quickly (and certainly before they land here in New England, where the locals have a history of turning back unwelcome invasions).