retail news in context, analysis with attitude

The Wall Street Journal reports that Tesco, the world’s third bigger retailer after Walmart and Carrefour, has “sent a strong signal that it plans to push ahead with its struggling effort to crack the elusive U.S. market with its Fresh & Easy chain,” which, as the paper says, has “been problematic since its 2007 launch in the Western U.S. - an ill-timed move that found Tesco trying to enter an important market just as the brewing global financial crisis was about to explode.”

According to the story, Tesco’s incoming CEO, Phillip Clarke, who will succeed the retiring Sir Terry Leahy next year, says that he does not to conduct a strategic review of the business because the division is moving toward profitability.

The Journal writes that “Tesco said it expects its three-year-old U.S. Fresh & Easy chain to become profitable by the 2012-13 fiscal year - the first hard profit target that the retail giant has set for the U.S. since the recession challenged its operations there. The company expects to have 400 stores in the U.S. by then, up from 159 as of Aug. 28 ... That means leaving the areas of Arizona, Nevada and inland California, where the economic downturn has proven particularly severe, emptying out new housing developments.

“Tesco said Tuesday that in November it would ‘mothball’ 13 stores in those areas - six in Nevada, six in Arizona, and one in inland California - by boarding them up or subletting them, with a plan to reopen them in four to five years once the economy there recovers.

“Tesco will focus its efforts primarily in California, with plans to open 19 new stores in the U.S. in the next six months, or about one store every two weeks. After those stores open, Tesco plans to jump-start the rollout, moving to open about one store per week thereafter, Mr. Leahy said.”
KC's View:
There has been plenty of speculation that Tesco might be looking for a way out of its Fresh & Easy venture, and that Leahy’s retirement would open a window for the company to abandon its US experiment. But this news suggests that it ain’t happening.

I haven’t been to a Fresh & Easy in awhile, but coincidentally, I got an email the other day from an MNB user who had:

I went to a Fresh & Easy in a new area (high desert) and was very impressed. I hadn’t walked into one since they first opened in southern CA after being repelled by a foreign feel, foreign mix, and an overabundance of packaged ready to eat stuff that was over priced.  This new improved version completely reversed my opinion of Fresh & Easy stores!  It had a great mix of fresh foods, packaged goods, convenience foods and healthy organic selection (and most of my favorites, as well as my husband’s) – it turned out to be one stop shopping when I had just planned to check it out!  Sorry, Stater Bros…..and Albertson’s….

It looks like they are learning and listening to feedback, and they won me over!  It is the best store in the area, and when I am out that way (we bought a 2nd home) this is going to be “my store” from now on!


Sounds like Fresh & Easy has at least one convert.