Specialty grocers go head to head

When the British owner of Fresh & Easy Neighborhood Market stores launched the chain in Southern California last year, shoppers immediately started comparing it to Trader Joe’s, a company that has long dominated the local small grocery store scene.

Beginning today they will go head-to-head in Manhattan Beach.

The rival stores are on the same street corner, separated only by an Office Depot, and that allows customers to check out both, make direct comparisons and -- with a little chutzpah -- even use the same shopping cart.

After a three-month hiatus, Fresh & Easy plans a rash of openings, starting with the store on Rosecrans Avenue. It will be the chain’s 32nd store in the region; 70 more are planned for Southern California this year.

Joe Ewaskiw of Manhattan Beach is curious. “I have heard mixed reviews, but I am definitely going to check it out,” he said while loading Trader Joe’s groceries into his car while looking across the lot to Fresh & Easy.

“I love Trader Joe’s great quality and prices. If Fresh & Easy can match that or beat it, it will really be interesting,” he said.

Shoppers who have frequented both chains in different locations generally give each good reviews.

Bob Eicholz said he liked Fresh & Easy and Trader Joe’s because they made shopping easier.

“We want decent prices, all the time, on all products. As a Fresh & Easy and Trader Joe’s guy, I laugh when I enter Ralphs and Vons. I see outrageous prices on staples like cereal, and people fumbling with coupons to bring the prices down to where they should be anyway. Who needs this complexity?” said Eicholz, a Hollywood Hills resident.

Between the two, Eicholz gives Trader Joe’s the nod.

Jeanne Barney, who lives in Hollywood, also has divided loyalties.

“Trader Joe’s has a better selection of, and better prices on, cheese, packaged nuts, dried fruit and fruit juice,” Barney said. But she likes the name-brand goods that Fresh & Easy offers as well as the ability to purchase “singles” at the stores -- one slice of cake, for example, or a single pork chop.

And unlike Eicholz, she prefers the prepared food at Fresh & Easy.

For now, Trader Joe’s has the edge on Fresh & Easy in the Southern California grocery shopping landscape, said J. Elias Portnoy, chief strategist at brand marketing agency Portnoy Group.

“So far most people think Trader Joe’s is a better place with better selection and more upscale choices at good prices.” he said.

During its initial rollout, Fresh & Easy has been hampered by limited inventory, some poor choices of location and a dearth of higher-end food options, Portnoy said.

He believes the Fresh & Easy shopper is more budget-oriented and less sophisticated than the person who frequents Trader Joe’s. Where Fresh & Easy can gain traction is in quality prepared foods, Portnoy said.

The Manhattan Beach Fresh & Easy is opening after a three-month break by the company to tweak the format, which has suffered from slow store traffic and sales, according to industry analysts.

During that time, the chain has introduced a wider array of in-store discounts and promotions:

* It has increased its range of products by more than 10%, adding more choices of soft drinks, breakfast cereals and prepared foods.

* It has tinkered with the look of its stores, which some shoppers found sterile, by adding color and signage.

* It also stepped up advertising and now offers shoppers a coupon for $5 off of any purchase of $20 or more.

“Some customers found the stores cold. . . . Some customers were asking for more choice. The way we do business is to listen to the customers,” said Simon Uwins, Fresh & Easy’s marketing chief.

He said it was all part of developing Fresh & Easy as a brand in the Western U.S. And despite its slow start, there’s no reason to expect Tesco to fold up shop and head back to England. The company has said it is prepared to spend $2 billion over five years to crack the U.S. market and is already planning an expansion into Northern California.

Uwins said the location of the Manhattan Beach store so close to Trader Joe’s was not meant to be a message.

“The property came up. We wanted a store near our headquarters. There just happened to be a Trader Joe’s nearby,” Uwins said.

But some shoppers view the store’s proximity as an aggressive maneuver by the El Segundo chain, which is owned by Tesco, one of the world’s largest retailers.

“I am a loyal Trader Joe’s fan and I am disturbed that Fresh & Easy would open up so close,” said Tom Morgan, who lives in Manhattan Beach. “I am protesting in my own quiet way by never going in there.”

Although Fresh & Easy and Trader Joe’s compete with a wide range of grocery options in Southern California, including large chain supermarkets, hundreds of independent and ethnic grocers, warehouse stores and discounters such as Wal-Mart and Target, they are often grouped together because they are of similar size and have other common characteristics.

By year’s end, they will have about the same number of stores in the region. Fresh & Easy will have about 100; Trader Joe’s currently has 89.

Both have foreign owners. Trader Joe’s, based in Monrovia, is owned by Theo Albrecht, who with his brother Karl created a German supermarket empire controlled by Aldi Group.

Employees of the two chains don’t belong to unions. The companies don’t accept product coupons. They don’t have loyalty club cards. Their advertising is limited, and they are reticent when it comes to discussing their business.

For its part, Trader Joe’s wouldn’t even acknowledge the Fresh & Easy across the parking lot in Manhattan Beach.

“We at Trader Joe’s are simply focused on getting better at what we do every single day,” spokeswoman Alison Mochizuki said. “We’re not concerned about what other retailers say and do.”

--

[email protected]

--

On latimes.com

Discussion

Which grocer will win the battle for Southland shoppers? latimes.com/grocery