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While Research Company Tries To Keep Details Under Wraps, Pundit Subjects Report To In-Depth Analysis

When the Financial Times published a brief article on some new consumer research on Fresh & Easy conducted by a company called “Execution Research,” it piqued a lot of interest.

How could it not? Using terminology such as “the new cult retailer” and giving out superlatives liberally — such as claiming that Fresh & Easy was, in the eyes of consumers, comparing favorably on freshness to both Whole Foods and Trader Joe’s and concluding with a prediction of $12 billion in sales within five years — the news report was filled with shocking revelations.

As we have written extensively on Fresh & Easy and Tesco’s journey to America, yet had never heard of Execution Research, nor seen this study, we wanted to learn more. Mira Slott, Pundit Investigator and Special Projects Editor, got right on the case.

Initially we figured a study of a US retailer such as Fresh & Easy would be done out of the US, so we contacted the firm’s US office located in Greenwich, Connecticut. We learned, however, that the project was coordinated out of the firm’s London headquarters. Mira tried to get some information there as well and spoke to two people in Execution’s London headquarters:

Robert Evans
Consumer Analyst
Execution Ltd
London, England

Q: Is it possible to get a copy of the consumer research your company conducted on Tesco’s Fresh & Easy stores in the U.S.?

A: I work on the food team that compiled the note. The research is proprietary.

Q: In that case, do you have an executive summary of the findings?

A: No, we couldn’t provide that to you.

Q: But the news is already out. I learned of the Execution research in the Financial Times, which reported that it had seen the research. There is also another article that appears in the Evening Standard.

A: I’m familiar with the FT article but didn’t know about the other one. If the article is in the Evening Standard, it was picked up by Associated Press. The Financial Times has looked at our reports in the past; I wouldn’t know if they’ve seen this one. We don’t actively seek press. It compromises the integrity.

You would need to speak with Martin Dolan, head of equity research, if indeed there was some kind of public relations campaign, but I wouldn’t know. Why would we give out the report to the media when our clients pay for the information?

Q: Was the Fresh & Easy research sponsored by a client, a competitor, a vendor of Tesco, a financial investor, or did Execution do the research on its own?

A: We are an independent stock broker for institutional investors — those are our clients. Our reports go out to investors. We commissioned the research on Fresh & Easy ourselves. We do a lot of survey-based work. It wouldn’t be of service to our clients if it were sponsored.

Q: The FT reported generalities, but did not delineate the details of the research, the methodology of the survey, how and what questions were asked, etc., which would be critical to assessing the validity and importance of the findings. It is unclear from the FT piece how the firm came to its sweeping conclusions.

A: I would not be able to comment on what was written in the FT or answer these questions for you. You would need to speak with Martin Dolan.

Martin Dolan
Head of Equity Research
Execution Ltd.,
London, UK

Q: Robert Evans kindly referred me to you. We are interested to learn more about the research Execution conducted on Tesco’s Fresh & Easy stores in the U.S., and in a macro sense, the scope of services your company provides… I had inquired about getting a copy of the survey report. In cases where information is proprietary, companies often provide us with executive summaries, or allow us to paraphrase results or pull selective quotes…

A: Thank you for your interest in our latest research report on Tesco’s Fresh & Easy expansion in the U.S. I am aware of your website and think the online publication does a fantastic job of keeping its clients/readers up to speed with the latest developments in the U.S. retail industry.

I am head of equity research here at Execution, which is one of Europe’s leading institutional stockbrokers. In line with most stock brokers, we provide equity research on most of the large companies and industry groupings in the European index. Unfortunately we have a general policy not to issue our research reports to anyone other than our clients.

One of our greatest bugbears is our perception that the value of research has been denigrated over the years because too many of our competition (including the large investment banks) give their research away for free to anyone and everyone who requests it. We believe part, and who knows exactly what part, of the value of our research is the exclusive nature of its distribution coupled with the direct access our clients can get to our equity analysts.

Q: I understand and respect your policy not to issue your research reports to anyone other than your clients. The article in the Financial Times gives the impression you were making the report available to at least some media. FT reports that it has seen the research.

A: I can’t answer how the Financial Times got its information.

Q: Now that this is off the table, we would be remiss not to write about it because the publication in the Financial Times made it an item of public interest. We will use publicly available sources as well as our private sources, but we would like to represent your research fairly.

A: In a perfect world, I would love to have a sit down with you, but it is not beneficial to share our research and analysis in an open forum. I know you’d like to delve deeper, but I don’t want to compromise our relationships with Tesco and our clients.

Q: I’m hoping you might feel comfortable answering a few background questions regarding the interview process.

A: What would you like to know?

Q: Did Execution have permission from Fresh & Easy to do the interviews?

A: Yes. We had Tesco’s permission to participate.

Q: Were the interviews done in the store, in the parking lot after people shopped, or before they shopped?

A: Our retail analyst was responsible for that. I don’t know if the interviews were done in the store, before or after.

Q: Were shoppers given any incentives to answer questions, money, gift card, etc.?

A: No. There were no incentives to participate.

Q: How were shoppers approached? Were they told, “We are collecting information about Fresh & Easy?” or “We are in various supermarket parking lots today trying to get information about shopping patterns?

A: I wouldn’t know the exact questions.

Q: The types of questions and the way they are phrased can influence the answers. Would it be possible to get a copy of the questionnaire to validate your findings?

A: That would definitely not be possible. We do a lot of consumer surveys in the UK, Europe and the U.S. and utilize various techniques, which differentiates us from other analysts. This research is done for our clients, and it would be a disadvantage to share our methods with everyone.

Q: The FT article does not provide details of the report or the methodology, but quotes Execution’s conclusions, which seem beyond the scope of what could be learned through surveys. For example: “Fresh & Easy is the new cult retailer,” Execution wrote. “At the risk of doing the job of Tesco’s public relations department, F&E is already an incredible success story.” And later on in the FT article: “Execution said that it expected shopper numbers — the stores they were monitoring had only 20 to 30 customers through the door every hour — to increase as the brand grew.”

How did Execution come to these conclusion? Did it interview other consumers in the market area, or shoppers at neighboring competitors that expressed interest in Fresh & Easy, for example? Did Execution assess the competitive landscape in projecting this outcome?

A: We do a lot of analysis based on the surveys, but also from research studies conducted at the store, including traffic assessment, and from other means to come to our conclusions. The press likes to focus on the dramatic statements.

Q: The statements stand out because they come to conclusions in stark contrast to what many other reputable sources and reports indicate.

A: Actually, that’s not true if you see the whole report, but that is privileged information that we would only discuss with our clients.

Although they didn’t add very much to what was reported, we appreciate the time Mr. Evans and Mr. Dolan spent speaking with us.

We have worked with consumer and trade research — qualitative and quantitative — for a long time. We have found that shocking, counter-intuitive results almost always have their findings rooted in either a PR spin used to get press coverage or methodologies that distort more than clarify. We have obtained several copies of the report, read it thoroughly, and can confirm that there is a bit of both in this piece of research and the way it is being publicized.

To start with, the over-the-top rhetoric is all related to opinion, projections or spin. As Mr. Dolan mentioned, the actual data collected leads to a far more sober assessment.

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