Fresh & Easy Hits Roadblock

What was once a temporary breather to see how operations were going has become an admitted slowdown in expansion. UK retailer Tesco says it is no longer planning on having 200 US Fresh & Easy stores by February and now expects to hit that number next year.

The company, which has rolled out stores on the West Coast for the past year, hit its 100th unit recently. It currently operates in Southern California, Phoenix and Las Vegas.

Tim Mason, Tesco’s head of US operations was quoted saying: “The industry is in a very different place than when we came out and did the feasibility research three years ago. Then the U.S. consumer confidence index was at the highest level it had ever been. In October the U.S. consumer confidence index was the lowest it has been since 1967, so it’s a big change.”

We don’t think this is that big of a surprise, given the insanity going on in the retail world right now. But Fresh & Easy stores have low price points, a small footprint and have created a lot of buzz. Isn’t that what landlords are craving right now?

5 Responses to “Fresh & Easy Hits Roadblock”

  1. 1 David November 14, 2008 at 12:13 pm

    I think that Fresh & Easy has made a good choice if they are slowing down their plans. There is a lot of talk about whether Fresh & Easy will make it in the US. Their timing is horrible, but, despite that, I think they will succeed based upon what they offer the consumer and their excellent choices on location. It’s unfortunate for your average consumer that they are slowing down however. I’ve gone out of my way to go into a Fresh & Easy and their prices and products are fantastic. I think they will succeed.

  2. 2 kin powell November 14, 2008 at 12:25 pm

    insignifigant Ian look @ the economy,SSTUPID!

  3. 3 ColnagoMan November 14, 2008 at 12:25 pm

    Hey, even in the worst economy, people still need to buy food. People are cutting back on non-essential purchases, but, Tesco’s original business model should continue to work from a supply and demand perspective. Therefore, if Tesco chooses the right locations–strong locations where people require convenience shopping, I believe the company can continue to grow its customer base. The question is whether continuing to allocate the company’s capital towards its expansion plans is really the best use of scarce resources (if other demands are greater).

  4. 4 James November 17, 2008 at 11:22 am

    Sales per square foot are not meeting the companies’ expectations. Landlords will provide real concessions to credit tenants in this environment, the time is ripe for Tesco’s expansion. As a food store locating in a known demographic, sales results should be very predictable.
    Something is terribly wrong, why isn’t this working? The company reportedly did extensive market studies on its American store concept before the roll out.
    Something IS terribly wrong and I know what it is, but they’ll have to hire me to fix it.

  5. 5 Garry March 23, 2009 at 12:14 am

    I heard that Fresh and Easy is in big trouble. the corporate office is thinning the herd and people are getting laid off left and right. employees in stores aren’t getting the hours they promised eihter.

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