Ahold earns rave reviews for Everything Fresh concept
Ahold USA, the owner of Giant Foods and Stop & Shop, has developed a new, small box concept that focuses on organic foods and prepared meals at "cray cray low prices" while, according to reports, is delivering outstanding service from "teammates" who are passionate about food.
The company’s test store, a 3,000+ square-foot unit located in Philadelphia’s center city area, has gotten rave reviews from customers on Yelp, earning 4.5 out of 5 stars. Perhaps that is why the company is looking to open up additional locations, between 10,000 and 20,000 square feet, in Boston and Philadelphia, according to reports by Supermarket News and the Philadelphia Business Journal.
Everything Fresh spokesperson Suzi Robinson called the company’s first store, opened at 1222 Walnut Street in Philly, a "learning lab" in an interview with the Business Journal.
"We chose this location because the diversity of the city and the immediate neighborhood was a great combination — from working professionals to students — to gather great ideas from foodies of all backgrounds," Ms. Robinson added.
What Everything Fresh has learned so far is that the format is quite popular with locals who cite the fresh foods, low prices and helpful staff in their reviews. The store’s policy of offering customers a free cup of coffee or tea with each purchase has also gone over very well.
One customer, identified as Mayur C., wrote on Yelp, "I love this place. It’s seriously my dream come true. Although I live in the ‘burbs and can get fairly cheap organic stuff there, it’s nice to have something by work yo! In fact, this place has prices so low that it beats out my local supermarkets (still love you Giant and Wegmans) many times. It especially beats out Whole Foods and even Trader Joe’s at times."
Another Yelp reviewer, Sari A., wrote, "It’s very refreshing to have happy people who work there greet you with a big smile. Good product quality, great selections, and reasonable prices. I think I will be a frequent shopper. Four and half Yelps!"
Everything Fresh’s success in Philadelphia has the company looking to other cities. According to Supermarket News, Fresh Formats LLC, the Ahold division that includes Everything Fresh, is advertising for help in a new store to be located in the Allston neighborhood of Boston. The help wanted ads describe the business as "a new Fresh Food market that is small in size but BIG on fresh, organic & value."
Discussion Questions
What do you see as the potential for Everything Fresh and similar concepts in urban areas? Do these types of stores have an opportunity to grow outside of cities?
Poll
BrainTrust
Ken Lonyai
Consultant, Strategist, Tech Innovator, UX Evangelist
Kelly Tackett
Principal, 3E Insights
Their success really depends on the city. In NYC there’s no shortage of delis with the same type of menu for prepared foods, so they might not find success there easily.
The organic food market has been growing year over year and if my memory is right, 18 percent last year. There is a market, especially when one looks below the hype of competitors. Trader Joe’s has limited organic products in its SKUs despite a widespread belief otherwise and it ignored requests to sell hormone (or antibiotic?) free meats. Whole Foods stores have plenty of organic produce, but in their cafe’s none or nearly none of the prepared food offerings are organic, again, despite the store’s reputation as a haven for organic foods.
Everything Fresh will have to emphasize prepared organics at great prices or it really will not be a special destination. (By the way, we all know the term “natural” is marketing jive and has no meaning when referring to produce, right?)
I would think these types of stores are a godsend for urban areas. But let’s give it a bit of time to see whether those employees continue to be happy, prices low and produce fresh. The ability to replicate those types of points of differentiation in different markets and with consumers who have different benchmarks for what is important will always be a challenge.
Too many retailers believe success in a lab means they have developed a successful concept. One example would be site selection. Too many commuters in a hurry to get home and sales will not meet projections (based on the current success of the lab). Too many people who are more interested in price than organic sales decline. Finding that right balance in a location at a cost that makes sense will impact growth.
Then there are the lab’s competitive set. Some cities already have a lot of urban locations that will offer some of the destination drivers — organic and prepared foods. Likely they will find more competitors for the prepared food category than organic.
Another area is staffing. It is far easier to create the great atmosphere noted in some of the reviews in a lab environment. It is another thing to do it in a geographically dispersed chain. Can it be done? Yes. The question is if they will be able to do it.
Terrific combination of great products, engaging staff and value pricing in a small footprint is a winning combination regardless of urban or suburban location.
Traditional supermarkets have realized there is little upside going forward in the “middle of the market.” They are either smartly or desperately (or both) moving towards the polar ends of the market, namely “fresh” on one pole and “price” on the other. Add in the realization that with new e-commerce competitors emerging, there are very few markets and shoppers that crave new large-footprint stores.
The Ahold effort seems to have covered the right bases: size, fresh and price under a single new format. As others have mentioned, time will tell if they can sustain both price and fresh with the service levels needed to attract urban Millennials (many of whom need help finding their way to the dinner table each night). If they do, Everything Fresh and other formats like them will continue to emerge.
Most likely these concepts will stay in densely populated areas. Ahold has often started out well with new concepts and sooner or later they homogenize them. We’ve been helping putting them on college campuses with varying degrees of success. You can’t do much with 3,000 square feet. You really need about 15,000 to 20,000 to get it right. Whole Foods and Trader Joe’s routinely do that. Ahold is very late in the game. They found a parade and have jumped out in front of it this week. Let’s see what happens a year from now.
I echo what has been mentioned already — Ahold is late to the game. Lots of other retailers have been in this game for some time now, and the key here is do you have the stamina to maintain the format and invest in the people and food? If done right, the format can work, but how do you differentiate yourself from others that have done it successfully for quite some time now?
Everything about Everything Fresh smacks of anti-establishment, anti-status quo, and it works!
The story itself highlights the importance of social review sites like Yelp in driving the brand. Give a quick view of the Everything Fresh website and you’ll find that it speaks in Millennial slang “cray cray,” lacks capital letters where one expects them, uses of terms like “kickass.” The team bios are personal more than professional and they push for engagement with their social hashtag. The photos, the colors, and more are just fresh and differentiates from most other food stores.
Ahold has anchored traditional supermarket at one end of spectrum while differentiating this concept along store size, natural and organic assortment, amount of fresh products, signage, immediate feedback buttons, passion for food, teammates that sing, and oh let’s not forget those “kickass” prices.
If anyone was still wondering what people are looking for in food shopping choices and experience, we now have one more data point on what the future looks like.