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USA Today this morning reports this morning that Tesco’s Fresh & Easy’s combination of Trader Joe’s size with Whole Foods-style natural products and a Costco-type environment has created an “unfamiliar combination” that seems “to have left American shoppers confused about just what the chain is. As a result, Tesco is finding it harder than expected to make its mark on the nation's $500 billion grocery business.”

And, USA Today writes, “The stores are simple, bland and tiny by supermarket standards at about 10,000 square feet. The Fresh & Easy name signals the two things it wants shoppers to think of it for: freshness and convenience. All fresh food is dated — even the produce. And the stores are easy to shop.

“Perhaps more important, however: price. They're up to 30% cheaper than conventional market chains, reports TNS Retail Forward, a research firm.

“Fresh & Easy store-brand goods account for about half the products on the shelves — and have been created to contain no artificial ingredients or preservatives. But the store also carries name brands from Coca-Cola to Kraft. ‘We've created the 21st century market for the 21st century American,’ says Tim Mason, CEO of Fresh & Easy, who is overseeing the chain's U.S. expansion from offices in El Segundo, Calif.”

KC's View:
At some level, I think that the conversation about Fresh & Easy has to change. I think we all have to cut down on the speculation about whether or not it will succeed, because we haven't seen the format yet that will rive long-term success for Fresh & Easy. (That will come with the 2.0 and 3.0 stores that Tesco eventually opens.) But what we really have to talk about is the future of small-store format, and what kinds of permutations it may take as other retailers experiment with the form. And I think we’re going to see a lot more companies testing the concept, and reshaping it into new forms.