Companion Story: Fresh & Easy Neighborhood Market Planning Major Renovations at Two California Stores
Breaking Buzz & Analysis
Tesco's Fresh & Easy Neighborhood Market plans to begin testing full-service checkout lanes in two California stores beginning, if all goes as planned, by the end of August, Fresh & Easy Buzz has learned.
The full-service checkout tests will be at the Fresh & Easy store at Main Street and Raymond Avenue in the Southern California city of Alhambra, and at the Lincoln and Sterling unit in Lincoln, which is near Sacramento in Northern California, according to information we have from multiple sources in positions to know about the plans.
The two test stores will continue to offer self-service checkout. The full-service checkout lanes will be offered in the test as an option to customers.
The full-service checkouts are part of a retrofit project Fresh & Easy is doing at the two stores. See our companion story here.
According to our sources, Fresh & Easy's senior management hasn't yet put a time period on the test in terms of if and when they will decide to roll the full-service option out to additional units. There are currently 199 Fresh & Easy grocery markets in California, Nevada and Arizona.
The decision to test full-service checkout at the two Fresh & Easy markets - an interesting one because since 2007 when the first stores opened the grocery chain's CEO, Tim Mason, along with its corporate spokesperson, have said publicly Tesco and Fresh & Easy Neighborhood Market are fully committed to the self-service checkout system, essentially saying it's a winner - was quarterbacked by new retail operations chief Tim Ashdown.
We broke the news about Ashdown's coming on board at Fresh & Easy in this May 2, 2012 story. Before joing Fresh & Easy Neighborhood Market a couple months ago he was CEO of Tesco's operations in China.
Since joining Fresh & Easy, Ashdown has been been a busy guy. For example, he was responsible for deciding to fire 50 employees at Fresh & Easy's corporate headquarters on Wednesday of this week, as one way of many to attempt to reduce the losses at the Tesco-owned grocery chain. [See the piece by our 'The Insider' columnist here.]
According to our sources, CEO Tim Mason approved Ashdown's decision. Mason and Ashdown then left it up to the various Fresh & Easy line managers to decide which specific people to let go, although the line managers were given guidelines, the chief one being that a certain financial target needed to be reached, which meant many of the employees fired were at director level; the highest paid staffers after top-level management.
For nearly five years we've been saying in Fresh & Easy Buzz that one of Tesco's major fumbles from day one with its Fresh & Easy Neighborhood Market chain is that it offers only self-service checkout in its fresh food and grocery markets in California, Nevada and Arizona.
In fact, we've done far more than say so -- we've offered historical analysis on why offering self-service checkout only is folly, along with offering proactive suggestions on why Fresh & Easy is missing the boat by not offering both full and self-service checkout.
We've also offered a variety of examples in various stories about why not offering both full and self-service checkout is a major point of competitive disadvantage for Tesco's Fresh & Easy.
A few of those examples include the inability to accept paper checks and WIC vouchers at the stores, along with the plain and simple fact that, based on nearly 40 years' experience in the U.S. food and grocery industry, which has included doing studies on shopper preferences for full or self-service checkout (including in California), the empirical evidence simply is that by offering self-service checkout only, Fresh & Easy limits its potential universe of customers because the majority of grocery shoppers in the U.S. just don't want to scan and bag their own groceries, particularly when they can go to numerous stores that offer groceries at the same prices, and even for less, than Fresh & Easy does, full-service checkout and bagging included at no extra charge.
In our analysis, testing full-service checkout at only two Fresh & Easy stores makes very little sense because it offers little in the way of a representative sample, although it is less expensive then testing it in five or six stores, which would not only make better sense - two urban stores, two suburban stores and one rural store, for example - but would provide a much better picture in considering whether or not to roll it out chainwide.
Of course from our perspective - and since we've said from day one that offering self-service checkout only is a huge mistake for Tesco - it's a moot point because we would have both self and full-service checkout in all stores without question or hesitation.
The move, in our analysis, really comes too late for Fresh & Easy. The chain basically has a year to show dramatic improvement in terms of reducing its losses. If not, the notion of breaking even by February 2014, which Tesco CEO Philip Clarke says will happen, not only won't be achievable but will essentially be a moot point. The operative point being: Can Fresh & Easy be anything more that a chain that finally stops losing money for Tesco?
In order to grow Fresh & Easy, even if it were to break even by February 2014 (if it's still around), Tesco has to have confidence in investing money in that growth - and it needs the confidence of its investors to continue doing so, considering about $2 billion has already been invested, and around $1.5 billion has been lost in five years. That confidence doesn't currently exist, even, we suggest, when it comes to CEO Philip Clarke, his (infrequent these days when it comes to Fresh & Easy) public prognostications to the contrary.
Meanwhile, five years after launching Fresh & Easy, and five years after we first pointed out why Tesco made a major mistake offering only self-service checkout in its Fresh & Easy stores, the retailer will test full-service checkout at the two stores in California.
No announcement has been made of this test by Tesco or Fresh & Easy. It will be interesting to see how they position it, now that it's being reported on.
California recently passed a law banning the sale of alcoholic beverages at self-service checkouts in the state's grocery and other format stores that offer adult beverages for sale. That law is currently in court, being challenged by the California Grocer's Association, largely because of Fresh & Easy, which is a member, since none of the trade groups other grocer-members offer self-service checkout only in their stores. As such, this could be one way Fresh & Easy explains the need for the full-service checkout test at the two stores.
Tesco isn't in any position to tinker around the edges with two-store self-service checkout tests at Fresh & Easy though. If it believes in Fresh & Easy, it should add the full-service checkout options to all the stores post haste.
And that's the central question and proposition: 'Does Tesco believe in Fresh & Easy?' It's a theme we will be returning to in the coming days in our reporting, analysis and commentary.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Tampilkan postingan dengan label AB 1060. Tampilkan semua postingan
Tampilkan postingan dengan label AB 1060. Tampilkan semua postingan
Sabtu, 28 Juli 2012
Senin, 12 Maret 2012
California Resident Launches Online Petition to Encourage Repeal of State's Self-Service Checkout Booze Ban Law
News/Analysis
California resident Rich Saavedra today launched an online petition designed to encourage the California State Legislature to repeal AB 183, the law passed by a majority of legislators in both houses last year and signed into law by Governor Jerry Brown, that banned the purchase of alcoholic beverages at self-service checkouts in retail stores in the Golden State.
In the petition, which is posted at thepetitionsite.com (view it here), Saavedra says self-service checkouts, such as those used exclusively at Tesco's Fresh & Easy Neighborhood Market - he doesn't mention Fresh & Easy specifically - have safeguards built-in that prevent minors from being able to purchase alcohol using the checkouts, which is the primary reason supporters of the law gave for enacting AB 183 last year.
Those safeguards in place at Fresh & Easy include the fact the self-service checkout system locks up whenever a customer scans an alcoholic beverage item.
Once the system locks up a store worker comes to the checkout, checks the shopper's identification card - the chain's policy is to do so if the customer looks to be under 40-years-old - and if the shopper is 21, the minimum legal age to buy alcohol in California, the employee then punches a special code into the machine, which allows the checkout process to continue.
Since AB 183 has become law we've observed the store clerks remaining at the checkouts, monitoring the process, or scanning the customer's alcoholic beverage items for them.
Explaining his reason for launching the online petition today, Richard Saavedra says: "Let's send a message to the lawmakers of the state of California that we will not stand for frivolous laws. They should be concentrating on the bigger decisions that impact the residents of California, like the state budget, and making sure we have enough Police and Firefighters."
So far Saavedra's just-posted online petition has three signatures, including his. He hopes to get at least 10,000 signatures on the petition.
Although AB 183 is law in California, it isn't currently being enforced because the California Grocers Association (CGA), the trade group for food and grocery retailers doing business in California, has filed a lawsuit challenging the enforcement mechanism put forth in a December 23, 2011 advisory memo early this year by the California Alcohol Beverage Control Agency (ABC), which is charged with enforcing the law.
Tesco's Fresh & Easy Neighborhood Market is a member of the state grocers' association.
Mary Kasper, Fresh & Easy's general counsel/corporate secretary and a vice president at the chain, has played a major role in the CGA's filing of the lawsuit.
Kasper's worked with the trade group in the past. For example, prior to joining Tesco's Fresh & Easy she was general council and corporate secretary for Kroger-owned Ralphs' Grocery Company, which is the market share-leading food and grocery retailer in Southern California.
In its lawsuit the grocers' association asked the California Third District Court of Appeals, which is where CGA filed the suit, to halt the ABC's enforcement plan, which the court did, until the lawsuit is resolved.
That halt, and thus the ABC's ability to enforce the self-service checkout alcohol sales ban, which primarily affects Tesco's Fresh & Easy because its the only chain or independent in California that uses a self-serve checkout system only (which it calls assisted checkout because store clerks assist customers if asked), remains in place until the court rules on the lawsuit, which has yet to occur.
All of the other grocery chains, independents and other format retailers in California using self-service checkouts and offering alcohol for sale, also offer the option of full-service checkout in their respective stores. AB 183 also applies to the self-checkouts in those stores, meaning customers purchasing alcoholic beverages can't, under the law, self-scan purchases of alcohol at the self-service checkouts.
Fresh & Easy and all other retailers are allowed to continue using the self-service checkouts to sell alcoholic beverages until there's a resolution by the court over the CGA's lawsuit challenging the ABC's enforcement scheme and plans. This is why, for example, if you shop at a Fresh & Easy store in California, you haven't seen any changes in the self-checkout system pertaining to alcohol purchases, even though AB 183 became law January 1, 2012.
Repealing a bill that's been passed into law and signed by the Governor, such as AB 183, is difficult to do in California.
What has to occur from a realistic and politically practical standpoint is that a legislator essentially has to introduce a new bill addressing the issue.
For example, the new bill could be written to once again make it legal for alcohol transactions to be conducted by retailers at self-service checkouts.
Conversely, a member of the legislature could author a new bill that simply modifies aspects of AB 183, such as making it legal to sell alcohol using self-service checkouts as long as a store clerk is present while the customer scans his or her grocery purchases (or does the scanning for the shopper), and that identification is checked prior to allowing the customers to scan the order if it includes alcoholic beverages, for example.
These and/or other provisions could be attached to such a bill, so rather than a full repeal of AB 183 the current law is instead modified, allowing retailers to use self-service checkouts to sell alcohol but placing various conditions on such use.
It's this latter approach that, in our analysis, we believe offers the most politically realistic approach for those in California who want to see the current law changed.
However, since the court is still considering the CGA's lawsuit, it's really a moot point because how AB 183 is enforced, and thus the law itself for all practical terms, is now in the California Third District Court of Appeals' hands.
If the court does rule in the CGA's favor, it's likely the law's author, Assemblywoman Fiona Ma (Democrat-San Francisco), and supporters will move to amend AB 183 so it not only remains as law but makes enforcing it - banning alcohol sales completely at self-service checkouts - by the ABC possible. It is ambiguous language in the original bill that paved the way for the lawsuit in the first place.
There currently remains a solid majority in the Democrat-controlled California State Assembly and California State Senate in support of AB 183. Legislators have been known to change their minds though, with pressure - it's called politics. And this is what Saavedra says in his online petition he hopes getting the 10,000 signatures will help to do - influence members of the legislature to take a second look at the law.
Another approach that could be taken would be to put an initiative on the ballot in California that would repeal the self-service checkout booze ban law using the Golden State's popular voter-initiative process. Such initiatives can be sponsored by trade groups like the CGA, retailers, such as Fresh & Easy, other groups, and state residents (or all combined).
The direct-to-voters initiative process is an approach regularly taken in California - Governor Brown is using it himself for a set of budget and tax proposals that will be on the November 2012 election ballot.
Such an initiative might in fact be the best way to resolve the issue because it would allow California voters, who also are consumers and shoppers at the state's grocery and other retail format stores offering alcoholic beverages for sale, to decide whether or not the adult beverages should or should not be allowed to be purchased at self-service checkouts in California stores.
California resident Rich Saavedra today launched an online petition designed to encourage the California State Legislature to repeal AB 183, the law passed by a majority of legislators in both houses last year and signed into law by Governor Jerry Brown, that banned the purchase of alcoholic beverages at self-service checkouts in retail stores in the Golden State.
In the petition, which is posted at thepetitionsite.com (view it here), Saavedra says self-service checkouts, such as those used exclusively at Tesco's Fresh & Easy Neighborhood Market - he doesn't mention Fresh & Easy specifically - have safeguards built-in that prevent minors from being able to purchase alcohol using the checkouts, which is the primary reason supporters of the law gave for enacting AB 183 last year.
Those safeguards in place at Fresh & Easy include the fact the self-service checkout system locks up whenever a customer scans an alcoholic beverage item.
Once the system locks up a store worker comes to the checkout, checks the shopper's identification card - the chain's policy is to do so if the customer looks to be under 40-years-old - and if the shopper is 21, the minimum legal age to buy alcohol in California, the employee then punches a special code into the machine, which allows the checkout process to continue.
Since AB 183 has become law we've observed the store clerks remaining at the checkouts, monitoring the process, or scanning the customer's alcoholic beverage items for them.
Explaining his reason for launching the online petition today, Richard Saavedra says: "Let's send a message to the lawmakers of the state of California that we will not stand for frivolous laws. They should be concentrating on the bigger decisions that impact the residents of California, like the state budget, and making sure we have enough Police and Firefighters."
So far Saavedra's just-posted online petition has three signatures, including his. He hopes to get at least 10,000 signatures on the petition.
Although AB 183 is law in California, it isn't currently being enforced because the California Grocers Association (CGA), the trade group for food and grocery retailers doing business in California, has filed a lawsuit challenging the enforcement mechanism put forth in a December 23, 2011 advisory memo early this year by the California Alcohol Beverage Control Agency (ABC), which is charged with enforcing the law.
Tesco's Fresh & Easy Neighborhood Market is a member of the state grocers' association.
Mary Kasper, Fresh & Easy's general counsel/corporate secretary and a vice president at the chain, has played a major role in the CGA's filing of the lawsuit.
Kasper's worked with the trade group in the past. For example, prior to joining Tesco's Fresh & Easy she was general council and corporate secretary for Kroger-owned Ralphs' Grocery Company, which is the market share-leading food and grocery retailer in Southern California.
In its lawsuit the grocers' association asked the California Third District Court of Appeals, which is where CGA filed the suit, to halt the ABC's enforcement plan, which the court did, until the lawsuit is resolved.
That halt, and thus the ABC's ability to enforce the self-service checkout alcohol sales ban, which primarily affects Tesco's Fresh & Easy because its the only chain or independent in California that uses a self-serve checkout system only (which it calls assisted checkout because store clerks assist customers if asked), remains in place until the court rules on the lawsuit, which has yet to occur.
 |
| Assisted checkout at Tesco's Fresh & Easy. |
Fresh & Easy and all other retailers are allowed to continue using the self-service checkouts to sell alcoholic beverages until there's a resolution by the court over the CGA's lawsuit challenging the ABC's enforcement scheme and plans. This is why, for example, if you shop at a Fresh & Easy store in California, you haven't seen any changes in the self-checkout system pertaining to alcohol purchases, even though AB 183 became law January 1, 2012.
Repealing a bill that's been passed into law and signed by the Governor, such as AB 183, is difficult to do in California.
What has to occur from a realistic and politically practical standpoint is that a legislator essentially has to introduce a new bill addressing the issue.
For example, the new bill could be written to once again make it legal for alcohol transactions to be conducted by retailers at self-service checkouts.
Conversely, a member of the legislature could author a new bill that simply modifies aspects of AB 183, such as making it legal to sell alcohol using self-service checkouts as long as a store clerk is present while the customer scans his or her grocery purchases (or does the scanning for the shopper), and that identification is checked prior to allowing the customers to scan the order if it includes alcoholic beverages, for example.
These and/or other provisions could be attached to such a bill, so rather than a full repeal of AB 183 the current law is instead modified, allowing retailers to use self-service checkouts to sell alcohol but placing various conditions on such use.
It's this latter approach that, in our analysis, we believe offers the most politically realistic approach for those in California who want to see the current law changed.
However, since the court is still considering the CGA's lawsuit, it's really a moot point because how AB 183 is enforced, and thus the law itself for all practical terms, is now in the California Third District Court of Appeals' hands.
If the court does rule in the CGA's favor, it's likely the law's author, Assemblywoman Fiona Ma (Democrat-San Francisco), and supporters will move to amend AB 183 so it not only remains as law but makes enforcing it - banning alcohol sales completely at self-service checkouts - by the ABC possible. It is ambiguous language in the original bill that paved the way for the lawsuit in the first place.
There currently remains a solid majority in the Democrat-controlled California State Assembly and California State Senate in support of AB 183. Legislators have been known to change their minds though, with pressure - it's called politics. And this is what Saavedra says in his online petition he hopes getting the 10,000 signatures will help to do - influence members of the legislature to take a second look at the law.
Another approach that could be taken would be to put an initiative on the ballot in California that would repeal the self-service checkout booze ban law using the Golden State's popular voter-initiative process. Such initiatives can be sponsored by trade groups like the CGA, retailers, such as Fresh & Easy, other groups, and state residents (or all combined).
The direct-to-voters initiative process is an approach regularly taken in California - Governor Brown is using it himself for a set of budget and tax proposals that will be on the November 2012 election ballot.
Such an initiative might in fact be the best way to resolve the issue because it would allow California voters, who also are consumers and shoppers at the state's grocery and other retail format stores offering alcoholic beverages for sale, to decide whether or not the adult beverages should or should not be allowed to be purchased at self-service checkouts in California stores.
Minggu, 01 Januari 2012
Fresh & Easy Neighborhood Market Gets A Reprieve of Sorts On California Self-Service Checkout Booze Ban Law
California's new law that prohibits shoppers from purchasing alcoholic beverages at self-service checkouts in retail stores went into effect today - but with a twist.
The twist is that at the request of the California Grocers Association (CGA), the California Third District Court of Appeals has halted the enforcement mechanism set forth by the California Alcohol Beverage Control Agency (ABC) in its December 23, 2011 advisory.
As we reported on Thursday, the trade association for food and grocery retailers in California filed a lawsuit before Christmas asking the state appeals court to halt an enforcement mechanism outlined by the California Alcohol Beverage Control Agency (ABC) in its December 23 advisory notice because the trade group says the agency's interpretation of the new law, AB 183, "is inconsistent with the statute, unenforceable, and in violation of the California Administrative Procedure Act (APA)."
Read our December 29, 2011 piece for details: The 'Fresh & Easy' Writ: California Grocers Association Files Lawsuit Over Self-Service Checkout Booze Ban Law.
The court says the halt of the ABC advisory will remain in place until there's a decision on the lawsuit filed by the CGA, which means for now retailers don't have to follow the guidelines set forth by the ABC in its December 23 advisory.
AB 183 however is law as of today, which means it's illegal in California for customers to purchase alcoholic beverages at self checkout registers in stores.
Confused? You should be.
What is unclear however is how the law will be enforced.
For example, Tesco's Fresh & Easy Neighborhood Market has self-service checkouts only in all of stores, including its 135 units in California. There are 184 Fresh & Easy stores. The other units are in Arizona (28 stores) and Nevada (21 stores).
Fresh & Easy calls its self-service system assisted checkout because store employees assist customers with the checkout process if asked.
Additionally, all purchases involving alcoholic beverage sales at the checkouts require assistance from an employee. Whenever a shopper scans an alcoholic beverage item during self-checkout the system locks up, which requires the assistance of a store worker in order for the transaction to be completed. The self-checkout systems at all other retail stores in California work essentially the same way.
As we written previously, based on the language of AB 183 prior to the advisory issued by the ABC last week, it's possible that Fresh & Easy could use its existing self-checkout system as long as any transaction involving alcohol purchases is completely monitored and conducted by a store employee.
The ABC's advisory says this isn't the case however - hence the lawsuit by the CGA.
At present, based on the court's halting of the ABC's enforcement mechanism outlined in the advisory, it appears Tesco's Fresh & Easy will be able to use its existing self-checkout system as long as any customer transaction involving the purchase of alcoholic beverages is monitored 100% by a store employee.
That, however, is our interpretation - and from what our sources tell us is the assumption Fresh & Easy (and the CGA) is operating on today, the first day in which the law takes effect but without the key enforcement mechanism which has been halted by the court pending resolution of the CGA's lawsuit.
Meanwhile, we've checked but there's no word from AB 183's author, San Francisco Assemblywoman Fiona Ma, who a couple weeks ago sent out a press release touting the piece of legislation she wrote, about the controversy surrounding the self-service checkout booze ban law.
Stay tuned. This story is far from over.
The twist is that at the request of the California Grocers Association (CGA), the California Third District Court of Appeals has halted the enforcement mechanism set forth by the California Alcohol Beverage Control Agency (ABC) in its December 23, 2011 advisory.
As we reported on Thursday, the trade association for food and grocery retailers in California filed a lawsuit before Christmas asking the state appeals court to halt an enforcement mechanism outlined by the California Alcohol Beverage Control Agency (ABC) in its December 23 advisory notice because the trade group says the agency's interpretation of the new law, AB 183, "is inconsistent with the statute, unenforceable, and in violation of the California Administrative Procedure Act (APA)."
Read our December 29, 2011 piece for details: The 'Fresh & Easy' Writ: California Grocers Association Files Lawsuit Over Self-Service Checkout Booze Ban Law.
The court says the halt of the ABC advisory will remain in place until there's a decision on the lawsuit filed by the CGA, which means for now retailers don't have to follow the guidelines set forth by the ABC in its December 23 advisory.
AB 183 however is law as of today, which means it's illegal in California for customers to purchase alcoholic beverages at self checkout registers in stores.
Confused? You should be.
What is unclear however is how the law will be enforced.
For example, Tesco's Fresh & Easy Neighborhood Market has self-service checkouts only in all of stores, including its 135 units in California. There are 184 Fresh & Easy stores. The other units are in Arizona (28 stores) and Nevada (21 stores).
Fresh & Easy calls its self-service system assisted checkout because store employees assist customers with the checkout process if asked.
Additionally, all purchases involving alcoholic beverage sales at the checkouts require assistance from an employee. Whenever a shopper scans an alcoholic beverage item during self-checkout the system locks up, which requires the assistance of a store worker in order for the transaction to be completed. The self-checkout systems at all other retail stores in California work essentially the same way.
As we written previously, based on the language of AB 183 prior to the advisory issued by the ABC last week, it's possible that Fresh & Easy could use its existing self-checkout system as long as any transaction involving alcohol purchases is completely monitored and conducted by a store employee.
The ABC's advisory says this isn't the case however - hence the lawsuit by the CGA.
At present, based on the court's halting of the ABC's enforcement mechanism outlined in the advisory, it appears Tesco's Fresh & Easy will be able to use its existing self-checkout system as long as any customer transaction involving the purchase of alcoholic beverages is monitored 100% by a store employee.
That, however, is our interpretation - and from what our sources tell us is the assumption Fresh & Easy (and the CGA) is operating on today, the first day in which the law takes effect but without the key enforcement mechanism which has been halted by the court pending resolution of the CGA's lawsuit.
Meanwhile, we've checked but there's no word from AB 183's author, San Francisco Assemblywoman Fiona Ma, who a couple weeks ago sent out a press release touting the piece of legislation she wrote, about the controversy surrounding the self-service checkout booze ban law.
Stay tuned. This story is far from over.
Kamis, 29 Desember 2011
The 'Fresh & Easy' Writ: California Grocers Association Files Lawsuit Over Self-Service Checkout Booze Ban Law
News/Analysis/Commentary
An interesting new twist has developed regarding California's new law to ban sales of alcoholic beverages at self-service checkouts in retail stores, which is set to take effect January 1 2012.
On December 8 we published this piece - Bad Timing With New Law Effective January 1, 2012: Fontana, California Fresh & Easy Store Cited For Allegedly Selling Alcohol to Minors - in which we pointed out among other things that the language of the new law to ban booze sales at self-service checkouts in California set to take effect in four days is somewhat ambiguous regarding how at least one grocery chain, Fresh & Easy Neighborhood Market, should comply with the new law, although the law's intend is clear, which is that alcoholic beverage sales transactions take place at full-service checkouts.
Fresh & Easy is the only grocer in California that has self-service checkout only in its stores, which is why it's a special case.
In apparent agreement with the ambiguity portion of our December 8 story, On December 23 the California Alcoholic Beverage Control Department (ABC) issued an industry advisory notice in which it attempted to clarify how retailers are to comply with the law when it takes effect January 1, 2012.
Here's (in italics below) what the ABC said in its December 23 advisory notice to California retailers:
On January 1, 2012, Section 23394.7 of the Business and Professions Code goes into effect. This new provision was added to the ABC Act by Assembly Bill 183 (Ma) and regulates the sale of alcoholic beverages through the use of "customer-operated" checkouts at off-sale licensed premises. The section reads as follows:
23394.7. No privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.
The purposes behind this law include preventing minors from purchasing alcoholic beverages, denying obviously-intoxicated patrons from buying alcoholic beverages, and preventing the theft of alcoholic beverages, by ensuring that alcoholic beverages are sold only in circumstances in which substantial interaction between the purchaser and a sales clerk occurs.
It is clear that a "customer-operated checkout stand" means a checkout stand or station that is designated for operation by the customer. Such checkout stands are commonly referred to as "self serve" or "self service" checkout stands. While retailers do monitor these customer-operated checkout stands and provide assistance to the customer as necessary to conclude any given transaction, including the purchase of alcoholic beverages, such monitoring or oversight does not satisfy the language and intent of the statute. Accordingly, no alcoholic beverages may be sold through any checkout stand that is enabled to allow operation by the customer at the time the customer’s check-out transaction commences or at any point during the check-out process.
The Department recognizes that customers do engage in certain aspects of the point-of-sale procedures even at checkout stands fully staffed and operated by store employees, such as swiping credit or debit cards and authorizing payment, or bagging their own groceries. The Department does not believe such involvement by the customer at a fully staffed checkout stand falls within the scope of customer-operated checkout stand.
The key portion in the ABC advisory notice is paragraph four above. Basically what the ABC is saying, and this is most applicable to Fresh & Easy Neighborhood Market due to its all self-service checkout system, is that all customer transactions that involve alcoholic beverage purchases must be conducted from start to finish by a store employee in a face-to-face manner.
Additionally, and most importantly, the advisory says alcohol sales cannot take place at an existing self-service checkout located on the physical premises (store) of a retailer that holds a California alcoholic beverage license.
What this essentially means in English is that any retailer - read Tesco's Fresh & Easy because all other retailers in California have both full and self-service checkouts in their stores - which has self-service checkouts only has to convert at least one of those self-service checkouts into a full-service checkout if it wants to sell alcoholic beverages in its stores effective January 1, 2012, or else it will not be in compliance with the law.
In other words, the ABC Advisory appears to reinforce our original interpretation of AB 183 vis-a-vis Fresh & Easy, which is that the grocer is going to have to convert at least one self-service checkout in all of its stores in California to full-service in order to satisfy the requirements of AB 183.
Interestingly, note how the ABC advisory mentions satisfying both the language and intend of AB 183. The reason this is interesting is because we addressed both the language, which is ambiguous, and the intent, which is what the ABC is backing up in its advisory, in our December 8 piece. Someone at the ABC must be reading Fresh & Easy Buzz.
The ABC's last minute advisory, just 10 days before AB 183 takes effect, isn't the only new twist to the self-service checkout booze ban law.
Yesterday the California Grocers Association (CGA) filed a petition for a writ of mandate with the California Third District Court of Appeal to stay the December 23 California Alcoholic Beverage Control Industry advisory notice which the grocer's association argues in the lawsuit "attempts to provide guidance in complying with a new state law to regulate alcoholic beverage sales at assisted self-checkout terminals."
Notice the use by the CGA of the term "assisted" self-checkout terminals. Remember, Fresh & Easy is the only grocer in California with all self/assisted checkout in its stores.
In its lawsuit, the CGA claims the ABC's advisory notice is inconsistent with the statute, unenforceable, and in violation of the California Administrative Procedure Act (APA).
CGA notes this: "The new law, Business and Professions Code Section 23394.7, takes effect January 1, 2012. The law provides that 'no privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee's physical premises.'"
This is the key provision we detailed above, which essentially means Fresh & Easy will have to convert at least one self-service checkout to full-service to satisfy the new law, based on the ABC's advisory notice, which communicates how it will enforce the new law.
The advisory can be viewed as an enforcement document from the ABC, meaning that if what is stated in it isn't carried out by retailers in following the new law they could be cited.
Explaining why its filed the writ, CGA president Ron Fong says: "The Advisory attempts to provide grocery retailers guidance on how to comply with the new law, by defining one of the law's key provisions. But the definition is vague and the advisory is an illegal underground regulation. The advisory is as unclear as the law itself. To protect our members, CGA was forced to file this writ."
Rather than issue the advisory, Fong says, the ABC should follow standard procedure and promulgate regulations through the California Administrative Procedure Act.
"We strongly disagree with the ABC's attempted interpretation of the new law," Fong says, adding CGA met with ABC officials to discuss the new law. "What was discussed in our meetings was significantly different than the Industry Advisory released last week."
In addition to requesting the advisory be withdrawn, CGA requested the court immediately issue an alternative writ of mandate that stays the effectiveness of the advisory pending a final ruling by the Court.
As of today the appeals court hasn't issued a decision on the grocery association's writ.
In our opinion the advisory issued two days before Christmas by the ABC is clearly meant as an attempt to clarify what as we've said, including most recently in our December 8 story, is ambiguous language in AB 183.
For example, based on our reading of the language of the law, before the ABC issued the advisory, it's our opinion Fresh & Easy might be able do the following and be in compliance with the legal language (but not the intent) of AB 183.
1. Post signs throughout the checkout area in its stores in California directing customers that if purchasing alcoholic beverages they must use one or more specially designated checkouts.
2. Those specially designated checkouts would be one or more of the type we discuss in our December 8, 2011 story here.
3. Store clerks would then conduct the entire transaction with customers at these designated checkouts; start to finish and face-to-face.
We stress this is merely our analysis and opinion. It isn't an attempt to make a legal determination regarding AB 183 in any way, shape or form.
Additionally, we aren't suggesting Tesco's Fresh & Easy Neighborhood Market plans or had planned to use a version of the system we've outlined above.
The December 23 ABC advisory clearly makes our above scenario moot however (if the CGA doesn't prevail), as it essentially says compliance with the law requires any holder of a California alcoholic beverage license to provide at least one self-service checkout in its store or stores in order to comply with the law effected January 1.
The ABC advisory shouldn't have any effect on any other grocer in California besides Fresh & Easy though, since all the state's other chains and independents either offer full-service checkout only, or in stores with self-service, offer both types of checkout.
These retailers and others only need to instruct customers that if they have alcoholic beverages they must use a full-service checkout lane.
As we've reported previously, Tesco's Fresh & Easy would like to keep its current self service/assisted service checkout system, with as little modification as possible, to comply with AB 183.
With just four days until the self-service checkout booze ban law takes effect, it now appears the grocery chain, which has all but 49 of its 184 stores in California, is placing its hopes to be able to do so on the success of the CGA's lawsuit. The other stores are in Nevada (21 units) and Arizona (28 units.)
From where we sit we find the ongoing saga behind AB 183 surrealistic in the extreme for two reasons.
First, as it pertains to AB 183, it basically will do little if anything to curb underage drinking, which is its primary stated intent, in our analysis.
Most teenagers, for example, obtain alcohol by getting an adult to buy it for them, not by purchasing is at self-service checkouts in retail stores. And while they're are cases of minors gaming self-checkout systems, the percentage is small.
Second, based on four years' of extensive research and reporting on Tesco's Fresh & Easy, which has lost nearly $1 billion since the first stores were opened in November 2007, its our analysis the grocer is missing out on a significant amount of business because numerous shoppers, particularly consumers who are in the 50-plus age segment, do not like the all self/assisted checkout system in the stores, as we've previously detailed in the blog.
As many consumers we've interviewed have told us, 'Why should I scan and bag my own groceries at Fresh & Easy when I can get the same items at numerous other stores for the same price or less and get waited on.'
We've also interviewed numerous consumers who've tried Fresh & Easy but specifically haven't gone back because they don't like scanning their own purchases, nor do they like to ask for help from store workers.
Many shoppers like Fresh & Easy's self-serve checkout. But in the competitive grocery retailing business it makes little sense to exclude the many consumers who dislike it, which is why all of Fresh & Easy Neighborhood Market's competitors offer either full-service checkout or a combination of full and self-service checkout.
For example, Walmart Stores' U.S. division, which is the leading retailer of food and groceries in the U.S. by market share, has studied the utility and feasibility of offering self-service checkout exclusively in some stores but has decided against doing so for reasons of shopper choice and common retailer savvy. All its stores with self-service checkout lanes also offer full-service as not only an option but as a majority offering.
There are only four days until AB 183 becomes law on January 1, 2012. Stay tuned here.
[Readers: Click here to view our extensive past coverage, reporting and analysis of California's new law that bans acoholic beverage sales at self-service checkouts in retail stores effective January 1, 2012.]
Kamis, 08 Desember 2011
Bad Timing With New Law Effective January 1, 2012: Fontana, California Fresh & Easy Store Cited For Allegedly Selling Alcohol to Minors
News & Analysis
The Fresh & Easy Neighborhood Market store at 16049 Baseline Boulevard in Fontana, California is one of 20 retail stores in Southern California's San Bernardino County that were issued citations by the California Alcohol Beverage Control Board (ABC) this past week for allegedly selling alcoholic beverages to minors.
The citation issued to the Fresh & Easy store in Fontana was the result of a regional sweep conducted by the state's alcoholic beverage sales regulatory agency and the San Bernardino County Probation Department, according to a spokesperson for the ABC.
The 19 other retail stores are in the cities of Ontario, Upland, Redlands, Montclair, San Bernardino and Rancho Cucamonga, according to the ABC and the San Bernardino County authorities.
The citation comes at a particularly bad time for Tesco's Southern California-based Fresh & Easy grocery chain because AB 183, which bans the sale of alcoholic beverages at self-service checkouts in retail stores, goes into effect January 1, 2012.
We nicknamed the self-service checkout booze ban bill the "Tesco Fresh & Easy Law" because Fresh & Easy Neighborhood Market is the only grocery chain in California that offers self-service checkout only in its stores.
All the other chains and independent grocers in the Golden State either offer full-service checkout only or offer a mix of full and self-service.
El Segundo, California-based Fresh & Easy Neighborhood Market has been struggling to figure out a way to comply with the law without having to add some sort of full-service checkout component to what it calls its "assisted checkout" system in its 135 stores in California, according to our sources who are familiar with the discussions.
There are 184 Fresh & Easy stores in the Golden State. The remaining 49 stores are in metropolitan Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (29 units).
Fresh & Easy calls its self-service checkout system "assisted checkout" because if asked, store workers will assist customers with the checkout process. The employees also regularly assist customers when problems occur with the self-checkout process.
Additionally, the self-service checkouts at Fresh & Easy don't allow customers to fully self-scan alcoholic beverage items.
Instead, the product UPC code numbers are programmed into the computer, so when a customer scans an item the system flags it, stopping the self-checkout process. A store worker must then come to the checkout and check the customer's identification card, which the grocer does for those a clerk believes to be 40-years-old or younger. If all is well, the clerk then punches a special code in the register, which then allows the customer to complete his or her self-checkout.
The intent of AB 183 however is that the new law will require a store worker to handle any and all checkout transactions involving alcohol from start to finish, in a face-to-face manner with the customer.
Fresh & Easy has two types or versions of self or assisted service checkout lanes in its stores.
The first type, which has shorter checkstands, isn't monitored regularly by store workers.
The second version though, which features longer checkout stands with conveyor belts, is monitored regularly by one or more store clerks, who linger in the area to assist customers.
It's this second system that Tesco's Fresh & Easy has considered tweaking a bit so that it might meet the requirements of the self-service alcohol beverage self-checkout ban law when it goes into effect less than a month from now, according to our sources.
For example, at the larger conveyor belt-equipped checkouts where store employees are always present and monitor the checkout process, Fresh & Easy could have the employees conduct any and all customer transactions that involve the purchase of alcoholic beverages.
It's possible, although not fully-clear, that if the grocer had a store worker conduct the entire transaction from start to finish, it might meet the legal language of AB 183, although it wouldn't likely meet the intent of the legislation's author, Assemblywomen Fiona Ma (Democrat-San Francisco), and the various supporters of the law.
Her intent behind the legislation, if not spelled out explicitly in the bill's language, is that retail stores would need to offer both full and self-service checkout under the new law.
However, the definition of full-service checkout isn't without some ambiguity in AB 183, based on our close reading of the legislation. Therefore it is possible, in our analysis, that a version of Fresh & Easy's monitored self/assisted checkout could qualify under the law, if not based on the intent of the legislation, perhaps on the actual language of the bill.
The other alternative for Fresh & Easy would be to offer at least one full-service checkout in each of its stores in California, which is something we suggested in early 2008 it do for reasons having nothing to do with any legislation in California, which wasn't yet introduced at the time, designed to ban alcohol sales at self-service checkouts in retail stores.
We stress we're not saying Fresh & Easy Neighborhood Market has decided to go with the option we are reporting on. Rather, based on our reporting, it's one scenario the grocery chain is considering because if possible it wants to retain its self/assisted checkout system, even if doing so requires some modifications, rather than add fell-service checkouts to the California stores, according to our sources.
Meanwhile, although a retailer being issued a citation for allegedly selling alcohol to minors isn't a capital offense, it is a serious one, albeit not completely uncommon.
However, receiving such a citation from authorities coming so close to the self-service checkout alcohol sales ban law going into effect is particularly bad timing for Tesco's Fresh & Easy.
The California ABC is aware the grocer offers self-service checkout only in its stores, and it plans to monitor Fresh & Easy closely once the law goes into effect.
In addition, numerous California law enforcement agencies were supporters of AB 183, and as a result plan to step-up monitoring of the checkouts once the law goes into effect in January 2012.
The law has fines attached to it for retailers that are caught allowing alcoholic beverage sales at self-service checkouts in their stores.
We've talked to staff members of the author and co-authors of AB 183, who all say the intent behind the law is to require face-to-face transactions between customers and store workers whenever alcohol is purchase in a retail store.
With January 1, 2012 coming fast, Tesco's Fresh & Easy will soon need to announce how it's going to comply with the new law.
Waiting until the last minute to do so - and the last minute is pretty much here - is a mistake because if what the grocer does to comply with AB 183 runs counter to the intent of Ma and her supporters, it could become a major public relations disaster for the grocery chain, which is the last thing it needs as it attempts to break-even (Tesco lost $112 million on Fresh & Easy for the first half of its fiscal year ended in August) by the end of 2012.
Related Stories
October 10, 2011: Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
September 9, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
The Fresh & Easy Neighborhood Market store at 16049 Baseline Boulevard in Fontana, California is one of 20 retail stores in Southern California's San Bernardino County that were issued citations by the California Alcohol Beverage Control Board (ABC) this past week for allegedly selling alcoholic beverages to minors.
The citation issued to the Fresh & Easy store in Fontana was the result of a regional sweep conducted by the state's alcoholic beverage sales regulatory agency and the San Bernardino County Probation Department, according to a spokesperson for the ABC.
The 19 other retail stores are in the cities of Ontario, Upland, Redlands, Montclair, San Bernardino and Rancho Cucamonga, according to the ABC and the San Bernardino County authorities.
 |
| Self or assisted service checkout at Fresh & Easy. |
We nicknamed the self-service checkout booze ban bill the "Tesco Fresh & Easy Law" because Fresh & Easy Neighborhood Market is the only grocery chain in California that offers self-service checkout only in its stores.
All the other chains and independent grocers in the Golden State either offer full-service checkout only or offer a mix of full and self-service.
El Segundo, California-based Fresh & Easy Neighborhood Market has been struggling to figure out a way to comply with the law without having to add some sort of full-service checkout component to what it calls its "assisted checkout" system in its 135 stores in California, according to our sources who are familiar with the discussions.
There are 184 Fresh & Easy stores in the Golden State. The remaining 49 stores are in metropolitan Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (29 units).
Fresh & Easy calls its self-service checkout system "assisted checkout" because if asked, store workers will assist customers with the checkout process. The employees also regularly assist customers when problems occur with the self-checkout process.
Additionally, the self-service checkouts at Fresh & Easy don't allow customers to fully self-scan alcoholic beverage items.
Instead, the product UPC code numbers are programmed into the computer, so when a customer scans an item the system flags it, stopping the self-checkout process. A store worker must then come to the checkout and check the customer's identification card, which the grocer does for those a clerk believes to be 40-years-old or younger. If all is well, the clerk then punches a special code in the register, which then allows the customer to complete his or her self-checkout.
The intent of AB 183 however is that the new law will require a store worker to handle any and all checkout transactions involving alcohol from start to finish, in a face-to-face manner with the customer.
Fresh & Easy has two types or versions of self or assisted service checkout lanes in its stores.
The first type, which has shorter checkstands, isn't monitored regularly by store workers.
The second version though, which features longer checkout stands with conveyor belts, is monitored regularly by one or more store clerks, who linger in the area to assist customers.
It's this second system that Tesco's Fresh & Easy has considered tweaking a bit so that it might meet the requirements of the self-service alcohol beverage self-checkout ban law when it goes into effect less than a month from now, according to our sources.
For example, at the larger conveyor belt-equipped checkouts where store employees are always present and monitor the checkout process, Fresh & Easy could have the employees conduct any and all customer transactions that involve the purchase of alcoholic beverages.
It's possible, although not fully-clear, that if the grocer had a store worker conduct the entire transaction from start to finish, it might meet the legal language of AB 183, although it wouldn't likely meet the intent of the legislation's author, Assemblywomen Fiona Ma (Democrat-San Francisco), and the various supporters of the law.
Her intent behind the legislation, if not spelled out explicitly in the bill's language, is that retail stores would need to offer both full and self-service checkout under the new law.
However, the definition of full-service checkout isn't without some ambiguity in AB 183, based on our close reading of the legislation. Therefore it is possible, in our analysis, that a version of Fresh & Easy's monitored self/assisted checkout could qualify under the law, if not based on the intent of the legislation, perhaps on the actual language of the bill.
The other alternative for Fresh & Easy would be to offer at least one full-service checkout in each of its stores in California, which is something we suggested in early 2008 it do for reasons having nothing to do with any legislation in California, which wasn't yet introduced at the time, designed to ban alcohol sales at self-service checkouts in retail stores.
We stress we're not saying Fresh & Easy Neighborhood Market has decided to go with the option we are reporting on. Rather, based on our reporting, it's one scenario the grocery chain is considering because if possible it wants to retain its self/assisted checkout system, even if doing so requires some modifications, rather than add fell-service checkouts to the California stores, according to our sources.
Meanwhile, although a retailer being issued a citation for allegedly selling alcohol to minors isn't a capital offense, it is a serious one, albeit not completely uncommon.
However, receiving such a citation from authorities coming so close to the self-service checkout alcohol sales ban law going into effect is particularly bad timing for Tesco's Fresh & Easy.
The California ABC is aware the grocer offers self-service checkout only in its stores, and it plans to monitor Fresh & Easy closely once the law goes into effect.
In addition, numerous California law enforcement agencies were supporters of AB 183, and as a result plan to step-up monitoring of the checkouts once the law goes into effect in January 2012.
The law has fines attached to it for retailers that are caught allowing alcoholic beverage sales at self-service checkouts in their stores.
We've talked to staff members of the author and co-authors of AB 183, who all say the intent behind the law is to require face-to-face transactions between customers and store workers whenever alcohol is purchase in a retail store.
With January 1, 2012 coming fast, Tesco's Fresh & Easy will soon need to announce how it's going to comply with the new law.
Waiting until the last minute to do so - and the last minute is pretty much here - is a mistake because if what the grocer does to comply with AB 183 runs counter to the intent of Ma and her supporters, it could become a major public relations disaster for the grocery chain, which is the last thing it needs as it attempts to break-even (Tesco lost $112 million on Fresh & Easy for the first half of its fiscal year ended in August) by the end of 2012.
Related Stories
October 10, 2011: Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
September 9, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
Senin, 10 Oktober 2011
Gov. Signs AB 183: End of Self-Service Checkout Only in California For Fresh & Easy Neighborhood Market if Stores to Still Sell Alcohol
 |
| Self-service checkout at Fresh & Easy Neighborhood Market. |
News/Analysis/Commentary
California Governor Jerry Brown signed AB 183 into law on Sunday, as we predicted he would.
The legislation authored by California Assemblywoman Fiona Ma that becomes law January 1, 2012 bans the sale of alcoholic beverages at self-service checkout stands in all format retail stores in California.
We nicknamed AB 183 the "Son of Tesco Fresh & Easy Law" because like the previous two other legislative attempts in 2008 and 2010 (which we nicknamed the "Tesco Fresh & Easy Law") to ban alcohol sales at self-service checkouts in retail stores in the Golden State, AB 183 will have the most immediate and direct affect on Tesco's Fresh & Easy Neighborhood Market because it's the only grocery chain in California that offers self-service checkout only in its stores, rather than the option of full or self-service.
The "Tesco Fresh & Easy Law" is now a reality for United Kingdom-based Tesco, which has 133 of its 182 small-format fresh food and grocery stores in California. The other 49 units are in Arizona (28 stores) and Nevada (21 units).
All but one or two of the 133 Fresh & Easy stores in California offer wine and beer for sale. A number of the stores also offer spirits for sale on the shelves, along with the wine and beer offering.
AB 183 amends California's offsale beer, wine and liquor license code to require retailers that have existing permits and licenses and who apply to offer alcoholic beverages for sale at future store locations, to sell the adult beverages at full-service checkouts, where there is a face-to-face transaction between customers and store employees.
Therefore, as we've said in our extensive coverage of the legislation, based on the current language of AB 183, Tesco's Fresh & Easy Neighborhood Market is going to have to at a minimum operate one full-service checkout stand in its stores in California in order to comply with the new law banning sales of alcohol at self-service checkouts come January 1, 2012.
The other alternative is that Tesco could stop selling alcoholic beverages completely in its stores in California, thereby leaving its self-service checkout system as it is. That, however, is highly unlikely in our analysis and opinion because alcoholic beverage sales, particularly its proprietary brand wines, is an important merchandising element for Fresh & Easy.
We first suggested in early 2008, before any legislation banning alcohol sales at self-service checkouts was ever introduced in the California Legislature, that one of the key operational mistakes Tesco has made with Fresh & Easy Neighborhood Market is to offer self-service checkout only in its stores. Doing so limits consumer choice and limits the potential universe of customers for Tesco's Fresh & Easy stores, thus limiting sales for the chain.
We continue to believe offering self-service checkout only in the Fresh & Easy stores is a very poor management decision.
On Wednesday (October 5, 2011) Tesco reported a 23% reduction in losses for Fresh & Easy for the first six months of its current fiscal year, compared to the same period last fiscal year.
Tesco lost $112 million (on sales of $470.5 million) on Fresh & Easy for the 2011/12 fiscal year, which ended August 27, 2011. That's compared to a loss of $151 million for the previous fiscal half year. Tesco had 177 Fresh & Easy stores opened at the August 27, 2011 half-year end, compared to 159 units for the same period a year ago. There are currently 182 stores.
The 23% reduction in the half-year loss for Fresh & Easy is a significant one for Tesco. But it's still a very long road to Tipperary. Tesco CEO Philip Clarke says the global retailer will break even with Fresh & Easy by the end of its 2012/13 fiscal year, which is about 16 months away.
Clarke has made numerous changes, mostly cosmetic ones though, at Fresh & Easy since becoming CEO of Tesco in March of this year. These include adding in-store bakeries and a few other design and merchandising additions and changes.
But ironically, in our analysis, the one change Clarke hasn't made but that has the potential to dramatically increase business at Fresh & Easy has just been mandated by the Governor of California.
Were we running Tesco and Fresh & Easy, we would move rapidly to offer shoppers the option of self and full-service checkout not only in the 133 Fresh & Easy Neighborhood Market stores in California, but in all 182 stores in California, Nevada and Arizona, which is something we would have done from the start, as we've noted more than once in Fresh & Easy Buzz.
We would offer both full-service and self-service checkout in the stores and, using Fresh & Easy's new loyalty points card which it's rolling out to all the stores next week, give customers who use the self-service checkouts bonus points for doing so, thereby encouraging them to scan and bag their own grocery purchases.
Offering both full and self-service checkout in this way at all the Fresh & Easy stores not only would comply with AB 183 in California where all but 49 of the stores are located, it would also serve to increase the potential universe of shoppers - those many who hate self-serve checkout and don't shop the stores now because of it - for the Fresh & Easy stores. The result: A stronger customer base and added sales.
Additionally, giving customers loyalty points they can redeem for savings on the new digital loyalty cards Fresh & Easy is introducing chainwide this week would encourage the use of the self-service checkouts, which are a labor-saving tool for the grocer.
The addition of the full-service checkout option chainwide will also allow Fresh & Easy Neighborhood Market to accept paper WIC Vouchers in all its stores, something it currently does in only one store, a unit in South Los Angeles, with plans to also do so at the store in San Francisco's Bayview district.
One of the reasons Fresh & Easy hasn't rolled out WIC chainwide is because of the difficulties the chain has had processing the paper vouchers under its self-service checkout only system. With the full-service checkout option in the stores, accepting WIC would be an easy process, as grocery checkers can simply process the vouchers like it's done at other grocery stores.
The potential sales boost for Fresh & Easy if it accepts WIC at all its stores is considerable. For example, according to the California WIC agency, about 7 million mothers receive the vouchers used to purchase healthy foods like infant formula, fresh milk, whole grain cereals, produce and other similar items in California. Therefore, by accepting WIC at its 133 Fresh & Easy stores in California, Tesco would expand its potential customer universe even more. Currently these 7 million potential customers in California are off the table for Tesco's Fresh & Easy.
Another benefit of accepting WIC in all the stores is that most of the items purchased by customers using the vouchers are at full margin.
This fact could potentially help Tesco with its gross and trading margin problems at Fresh & Easy. For example, on Wednesday Tesco reported a negative -24% trading margin for Fresh & Easy for the first half of its fiscal year. That's an improvement of about 10 basis points over the previous period but remains a serious problem for the retailer in its quest to break even by February 2013. It must get that negative margin into positive territory.
The full-service checkout option will also allow Fresh & Easy to accept paper personal checks and to cash customer payroll checks, which it currently doesn't do, in large part because of the same technical difficulties involved in processing the paper WIC Vouchers at the self-service checkouts.
Just like with WIC, grocery checkers could cash payroll checks and process paper personal checks at the full-service checkouts, thereby adding needed shopper choice and expanding the potential universe of customers for the Fresh & Easy stores.
We first pointed out in 2008, as we did with the self-service checkout only system, how not accepting WIC, paper personal checks and payroll checks is a serious operational flaw for Tesco's Fresh & Easy. [For example, see these two stories - September 7, 2008: Analysis & Commentary: Should Tesco's Fresh & Easy Put An Asterisk Next to its Motto? Yes; Unless it Corrects Four Operational Omissions; and March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track.]
From where we sit, closely covering and analyzing Tesco's Fresh & Easy Neighborhood Market for over four years, the passage of AB 183 into law in California is actually an operational blessing in disguise for Tesco if it offers the full-service checkout option, accepts WIC Vouchers in all its stores and invites shoppers to use paper personal checks and cash payroll checks at the checkouts if they so choose to do so as another option in paying for their grocery purchases.
Tesco went with self-service checkout only and the acceptance of plastic debit, EBT (food stamps) and credit cards only for payment at Fresh & Easy Neighborhood Market because it believes the labor savings from not offering a full-service checkout option and processing paper - the WIC Vouchers, personal and payroll checks - trumps the added business Fresh & Easy might get from offering the options.
However, we suggest the last four years of performance by Fresh & Easy since the first stores opened in November 2007 - a loss of about $1 billion - demonstrates the opposite is the case.
Shoppers like options and choice, which is something every experienced grocer knows, particularly in California. By expanding those options and choices like we've suggested in this piece, Tesco will find itself adding customers and sales to its Fresh & Easy stores, which is an option that in our analysis will exceed the labor savings benefits the retailer thinks it's getting currently by limiting customer choice.
Related Stories
September 9, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
Jumat, 09 September 2011
'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill Passes California State Senate; Headed to Governor's Desk For Action
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| self-service or "assisted" checkout at Fresh & Easy. |
Breaking Buzz
Assembly Bill 183, the legislation to ban sales of alcoholic beverages at self-service checkout stands in retail stores in California, has passed in the California State Senate and is being sent to Governor Jerry Brown, who has until October 9 to either sign the bill into law or veto it. Today is the last day of the 2011 legislative session and the last day for the California State Legislature to send bills to the Governor for action by October 9.
AB 183 passed late Thursday by just the 21-vote majority needed to gain approval and be sent to the Governor.
Twenty one members of the California State Senate voted in favor of passing AB 183 late yesterday, with 16 members voted against passage of the measure, which if signed into law by the Governor will require face-to-face transactions between retail store employees (full-service checkout) and customers whenever alcoholic beverages are purchased at retail in the Golden State.
Three members of the California State Senate, two Democrats and a Republican, didn't vote on the bill yesterday. Those members are Lois Wolk and Carol Liu (Democrats), and Doug LaMalfa, who is a Republican.
As we reported on Wednesday, AB 183 failed in its first vote in the California State Senate on Tuesday, even though it received 17 votes in favor of passage to 16 opposed, because it failed to get the 21-vote majority required to pass. [See - September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday.]
However, as we correctly pointed out in the story, Senator Christine Kehoe (Democrat-San Diego), who is the bill's manager in the California State Senate, was able to get a motion to reconsider the bill passed following AB 183's failure to get the needed 21 votes.
Her reason for doing so was because seven Senate Democrats - Senate Majority Leader Ellen Corbett, along with members Noreen Evans; Carol Liu; Curren Price; Michael Rubio; Lois Wolk; and Leland Yee - didn't vote on AB 183 on the Senate Floor on Tuesday.
Five of the "Missing Seven" Democrats voted late yesterday in favor of passage of AB 183, which is what allowed the self-service booze ban bill to gain the needed 21 votes and pass. Senator Rubio voted against the bill. Senators Wolk and Liu didn't vote on AB 183 yesterday, as was the case on Tuesday.
As we've noted in our extensive coverage and analysis of AB 183 and the two bills that preceded it in 2008 (AB 523) and 2010 (AB 1060), if the legislation that's now been passed by both the California State Assembly and California State Senate and is being sent to Governor Jerry Brown becomes law, it will have the most immediate and significant impact on Tesco's Fresh & Easy Neighborhood Market because the chain, which has 128 of its 177 fresh food and grocery markets in California, is currently the only grocer in the Golden State that offers self-service checkout only in its stores.
Other grocery chains in California, such as Winco Foods, Kroger's Ralphs, Save Mart Supermarkets and a couple others, for example, offer customers a choice of both full and self service checkout in some of their stores. But Tesco's Fresh & Easy has a self-service checkout only model and system which it uses in all its stores in California (128 units), metro Las Vegas, Nevada (21 stores) and metro Phoenix, Arizona (28 units). Fresh & Easy calls its system assisted checkout because if asked store workers will assist customers in scanning and bagging their grocery purchases.
Fresh & Easy Neighborhood Market self-checkout system, like those of all other retailers in California, also requires a face-to-face interaction with a store clerk anytime alcoholic beverages are purchased by customers.
When a customer scans an alcoholic beverage item, the self-service checkout system locks up, alerting store workers. Once this occurs a store clerk goes to the checkout and checks the customers identification card to make sure he or she is 21, which is the legal age required to purchase alcohol in California. The clerk must then punch a code number into the cash register in order for the customer to complete his or her transaction.
Tesco's Fresh & Easy and other opponents of AB 183, such as the California Grocers Association, the California Retailers Association, California Chamber of Commerce and others, argue this safeguard is enough to prevent minors from purchasing alcoholic beverages using the self-service checkouts.
In contrast, proponents of AB 183, which include its author, Assemblywoman Fiona Ma (Democrat-San Francisco), the majority of members of the California Assembly and Senate who passed the bill, and groups like Mother's Against Drunk Driving, the United Food and Commercial Workers Union (UFCW), various law enforcement organizations and others, say allowing sales of alcoholic beverages at self-service checkouts increases the chance minors can game the system and purchase adult beverages.
But the argument over whether or not AB 183 should pass in the California State Legislature is now moot. The legislation passed by a big majority in the California State Assembly in May and by 21 votes (to 16 against) in the California State Senate yesterday.
Now it's all up to Governor Jerry Brown to decide if what we've nicknamed the "Son of Tesco Fresh & Easy Law" (AB 183) because of its singular impact on the grocery chain of the same name becomes law in California. We nicknamed the previous two bills, AB 523 in 2008 and AB 1060 in 2010, both of which had as their goals the banning of alcohol sales at self-service checkouts, the "Tesco Fresh & Easy Law," hence the addition of "Son of" to what is now a four year old nickname for three bills since 2008, all of which have been authored to ban the sale of alcoholic beverages at self-service checkout stands in retail stores in California.
AB 523 failed to make it out of the California State Legislature in 2008. But In 2010, AB 1060 passed in both the California State Assembly and Senate. Republican Governor Arnold Schwarzenegger vetoed the bill at the final hour though, as we reported here - September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
Jerry Brown, the former two-term Governor of California (1970's-80's), a Democrat who replaced Republican Arnold Schwarzenegger in Sacramento in 2011, has until October 9 to either sign AB 183 into law, veto it, or do nothing. If Brown doesn't sign or veto the bill by the October 9 deadline it automatically becomes law.
Follow the Story Below - Legislation to Ban Sales of Alcoholic Beverages at Self-Service Checkout Stands in California: A History - 2008-2011
September 7, 2011: Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
Rabu, 07 September 2011
Self-Service Checkout Booze Ban Bill Fails in California Senate First Time Around; 'Missing Seven' Dems Hold Key to Passage By Friday
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| Self service or "assisted" checkout at Fresh & Easy. |
AB 183, the bill that if it becomes law would ban sales of alcoholic beverages at self-service checkout stands in grocery and other types of retail stores in California, has failed to gain the needed 21-vote majority required to pass in the California State Senate.
But the voting is far from over.
Following a 17-to-16 vote in favor of passage of AB 183 late yesterday, Senator Christine Kehoe (Democrat-San Diego), who is carrying the legislation in the California State Senate for its author, Assemblywoman Fiona Ma (Democrat-San Francisco), made a motion to reconsider, which was approved by all 40 members of the Senate.
As a result, yesterday's vote is what's called an unofficial ballot, which means AB 183 will come up for another (the official) vote before Friday, which is the last day of the current legislative session and the deadline for both houses of the state legislature to pass bills and send them to the Governor.
Should AB 183 pass in the Senate and then be signed into law by Governor Jerry Brown, it will have a singular immediate impact on Tesco's Fresh & Easy Neighborhood Market because the retailer, which has 127 of its 177 fresh food and grocery stores in California, is the only chain in the Golden State that has a self-service checkout only system. The other 49 Fresh & Easy markets are in metro Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (28 stores)
AB 183 requires all purchases of alcoholic beverages to be transacted in a face-to-face interaction with a store clerk, which means full-service checkout.
Many retailers in California offer self-service checkout in their stores but as an option along with the traditional full-service checkout. For these retailers a ban on sales of alcohol at self-service checkouts merely means customers will have to use the full-service checkouts when buying booze.
But for Tesco's Fresh & Easy, if AB 183 becomes law it will mean the retailer will need to at a minimum convert at least one of the checkout stands in each of its California stores to a full-service unit, in order to comply with the face-to-face interaction provision of the bill.
The long range future implication of the legislation for all retailers in California is that should they want to offer self-service checkout only in a store, such as a supermarket where alcoholic beverages are sold, they can't do so, instead having to offer some form of mixed self and full-service checkout in order to fulfill the legal requirements of AB 183.
The 'Missing Seven' Democrats
The reason AB 183 fell four votes short of gaining the 21 votes (simple majority) needed to pass is because seven members of the California State Senate, all Democrats, failed to vote, either because they were absent or abstained from voting on the measure.
Among the seven members who didn't vote for AB 183 yesterday was Senate Majority Leader Ellen Corbett, a Democrat from the Northern California city of San Leandro.
The remaining six members, all Democrats, who failed to vote on the bill yesterday are: Senator Noreen Evans; Senator Carol Liu; Curren Price; Michael Rubio; Lois Wolk; and Leland Yee.
According to our sources, Senator Kehoe filed the motion to reconsider yesterday based on the absence of some or all of the seven members of her party, including the Senate Majority Leader.
Based on our ongoing reporting and analysis of the legislative bill and process, at least four of the "Missing Seven" members - and possibly all seven - plan to vote in favor of passage of AB 183 when it comes up for a vote again, which could be as early as today.
The bill needs favorable votes from just four of the seven members in order to gain the 21 votes required for passage. Stay tuned.
California Legislation to Ban Alcohol Sales at Self-Service Checkouts: Follow the Story at the Links Below
September 6, 2011: California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
Selasa, 06 September 2011
California State Senate Set to Vote on Self-Service Checkout Booze Ban Bill This Week
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| Self-service or "assisted" checkout at Fresh & Easy. |
The California State Senate is set to vote on AB 183, which if passed in the legislative body and signed into law by Governor Jerry Brown will ban the sales of alcoholic beverages at self-service checkouts in retail stores in the Golden State, before the week is out.
In its official language, AB 183 prohibits holders of off-sale beer, wine and liquor licenses from selling alcoholic beverages using a customer-operated checkout stand located on the licensee's physical premises. [You can read the legislative analysis here.] In other words, any purchase of alcohol will require a face-to-face interaction with a store clerk if the bill becomes law in the Golden State.
Friday, September 9 is the last day of the current legislative session, and the last day both houses of the California State Legislature can vote on and pass bills in the session before it recesses until January 4, 2012.
A simple majority, 21 votes, is needed for AB 183 to pass in the California State Senate.
The bill, which originated in the California State Assembly (hence the AB designation), passed by a 48-to-26 majority in that body on May 26 of this year.
Based on our analysis, AB 183, which is authored by Assemblywomen Fiona Ma (Democrat-San Francisco), has enough votes (with a few to spare) to pass in the California State Senate.
If we're correct and the bill passes by the end of Friday's session, AB 183 will then be sent to Governor Jerry Brown, who like Ma and the majority of the bill's backers in both houses is a Democrat.
If the Governor receives AB 183 by the end of legislative business Friday, he has until October 9 to either sign or veto the bill.
If AB 183 doesn't pass or for some reason isn't voted on in the California State Senate by Friday, it will be dead for this legislative session.
If we're correct and AB 183 passes in the California State Senate this week, the opponents of the legislation, which include Tesco's Fresh & Easy Neighborhood Market, the California Grocers Association and others (see the lists at the end of this piece), will then need to stage a last-ditch effort to persuade the Governor to veto it by the October 9, 2011 deadline.
Governor Brown hasn't spoken out publicly in favor of or against AB 183, which isn't surprising since as the chief executive of the state with the second-highest unemployment rate (12.2 %) in the nation (after Nevada) and a huge budget deficit, he has bigger fish to fry than the self-service checkout booze ban legislation.
However, based on our reporting and analysis, we believe the Governor is leaning towards signing the self-service checkout booze ban bill by an about 60% (sign) to 40% (veto) margin, which is far from the slam-dunk many of its supporters thought would be the case earlier this year.
'Tesco Fresh & Easy Law'
Legislation to ban sales of alcoholic beverages at self-service checkouts in retail stores in California was first authored in 2008. That bill, AB 523, failed to make it out of the California State Senate.
In 2010 another bill, AB 1060, passed both houses of the California State Legislature but was vetoed by then Governor Arnold Schwarzenegger.
We nicknamed the two bills, both authored by Assemblyman Hector De La Torre (D-South Gate, Southern California) and backed primarily by the United Food and Commercial Workers (UFCW) union, the "Tesco Fresh & Easy Law" because if either bill had become law it would have affected Tesco's Fresh & Easy Neighborhood Market more directly than any other retailer in California since it's the only chain we've been able to find that offers self-service checkout only at its 128 stores in the Golden State.
Tesco has 177 Fresh & Easy stores, all of which offer self-service checkout only, or what the grocer calls "assisted checkout" because if asked a store worker will assist shoppers with the checkout process. The 49 remaining Fresh & Easy stores are located in metropolitan Las Vegas, Nevada (21 units) and metro Phoenix, Arizona (28 stores.)
Enter 'Son of Tesco Fresh & Easy Law'
But just when Tesco's Fresh & Easy Neighborhood Market thought it might be able to catch a break following the 2010 veto, San Francisco Assemblywoman Fina Ma, who's also the Speaker Pro Tempore of the California State Assembly, the second highest leadership position, introduced what we've nicknamed the "Son of Tesco Fresh & Easy Law," AB 183, in late January of this year.
This time around Ma and the bill's supporters have done two things De La Torre didn't: Built a much broader coalition in favor of the legislation, which includes numerous law enforcement organizations, and downplayed the UFCW union's involvement in AB 183.
For example, in 2008 and again in 2010 the UFCW was front-and-center in touting the self-checkout booze ban legislation. This time around the union has remained largely in the background, although as we've noted in our coverage of AB 183 it's a key supporter of the legislation.
The support particularly of law enforcement will be key if as we've said AB 183 passes this week in the California State Senate.
On one side the California Grocer's Association, California Chamber of Commerce and other opponents will be attempting to bend the Governor's ear, asking him to veto the self-checkout booze ban bill.
But on the other hand, in addition to the UFCW union and the powerful MADD (Mothers Against Drunk Driving) organizations, there will also be numerous California law enforcement organizations who argue that allowing sales of alcohol at self-service checkouts makes it easier for minors to purchase alcoholic beverages in stores, even though there's little empirical evidence to support the position, including that offered in the official legislative analysis of AB 183
A number of these law enforcement groups supported AB 1060 last year. But this year they've been much more vocal in their collective support. Supporters have also added many more law enforcement groups to the list of supporters.
As such, it will be difficult for the Democratic Governor to veto AB 183, as the forces behind it - important Democrat legislators and allies like Ma and others, the unions, MADD and law enforcement organizations statewide - make for a rather potent combination for Brown to buck should he want to veto the bill, which in practice will only directly affect one retailer in California, Tesco's Fresh & Easy Neighborhood Market.
But the Governor is unpredictable and has been known to buck what is often seen as conventional political wisdom, such as he did earlier this year when he vetoed the card check bill passed in the legislature which would have allowed farm workers in California to vote on unionization by filling out a card rather than using the traditional secret ballot voting process. The legislation though had much more riding on it for the Governor and the state than does AB 183, which most residents of California have little idea of, and if they do care little about.
We should know before or by Friday if AB 183 has passed in the California State Senate, as our analysis suggests will be the case, and is then sent to the Governor for his signature or veto. Stay tuned.
Key Supporters of AB 183
California Police Chiefs Association (co-source)
California Professional Firefighters (co-source)
Mothers Against Drunk Driving (co-source)
Association for Los Angeles Deputy Sheriffs
California Association of Addiction Recovery Resources
California Association of Alcohol and Drug Program Executives, Inc.
California Association of Alcoholism and Drug Abuse Counselors
California Council on Alcohol Problems
California Labor Federation
California Narcotic Officers' Association
California Nurses Association
California Teamsters Public Affairs Council
City and County of San Francisco Police Department
Consumer Federation of California
County Alcohol and Drug Program Administrators Association of California
Los Angeles County Probation Officers Union
Marin Institute
Riverside Sheriffs' Association
United Food and Commercial Workers Union
Western States Council of the United Food and Commercial Workers
Key Opponents of AB 183
California Chamber of Commerce
California Grocers Association
California Hispanic Chambers of Commerce
California Independent Grocers Association
California Manufacturers and Technology Association
California Retailers Association
Central City Association of Los Angeles
Information Technology and Innovation Foundation
Los Angeles Area Chamber of Commerce
National Cash Register Corporation
Neighborhood Market Association
Tech America
Valley Industry and Commerce Association
Source: State of California Legislative Analyst's Office
California Legislation to Ban Alcohol Sales at Self-Service Checkouts: Follow the Story at the Links Below
August 20, 2011: 'Son of Tesco Fresh & Easy Law': Self-Service Checkout Booze Ban Bill AB 183 Passes Out of California Senate Appropriations Committee; Headed For Senate Floor
July 27, 2011: 'Son of Tesco Fresh & Easy Law' Moving Through State Senate: Will California Determine Fresh & Easy Neighborhood Market's Checkout Scheme?
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Scharzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010 piece : Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores
July 14, 2008: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.
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