ICSC: Could be Better, Could be Worse

The retail real estate industry is far from its high-flying days of 2007 and before, but most executives we spoke with at ICSC’s RECon show weren’t about doom and gloom. Things are looking up…kind of.

“We’re seeing more demand for retail space,” said Scott Schroeder, vice president of marketing at Developers Diversified Realty. “It’s good. We’re not completely back, but we’re headed in the right direction.”

Report: Retail Sales Up, But Margins Drop

Even though we are in a global recession, the largest retailers in the world still found a way to increase sales by 5.5% in the 2008 fiscal year, which ended in June, according to a Deliotte Touche Tohmatsu report.

But at the same time, profitability fell from 3.7% to 2.4%, the report says. And of that 30 of the largest retailers operated at a loss during the period.

Will Fresh & Easy Sell Live Chickens?

Talk about DIY! British retailer Tesco, which owns the growing US chain Fresh & Easy is selling live chickens, according to an Ad Age article.

Apparently chicken coops are hot-selling items at some stores, and the retailer is selling both chicks and egg-laying grown birds. Says a spokesman: “While it’s probably a step too far to think that consumers will turn their back gardens into farms, keeping chickens does seem to be striking a chord with some of our customers.”

Tesco Keeps Pushing Fresh & Easy

Fresh & Easy, UK-based Tesco’s 10,000-square-foot grocery concept in the US, had booming same-store sales growth in its latest quarter, up 30% to 40% year over year, company officials recently reported.

The chain is still growing, too. Tesco’s management is planning 60 new stores this year, bringing its total to 170 by the end of the fiscal year.

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.

The Smaller the Better

Much has been made of UK-based grocer Tesco’s expansion into the US, in part because its 15,000-sf footprint allows the chain to expand rapidly in spaces too small for other grocers. This article discusses how many major domestic chains like Wal-Mart and Safeway are following suit.

We particularly love this quote, by supermarket consultant Willard Bishop: “If you’ve got 50 feet of ketchup and what you want is Hunt’s 64-ounce and you can’t find it, people get overwhelmed.”

Tesco Slows US Expansion

British grocer Tesco has made a lot of waves in the industry with the roll out and expansion of its Fresh & Easy chain on the West Coast. But now the retailer plans to slow down its growth.

According to a blog by the chain’s marketing director Simon Uwins, the company is now “pausing for breath” before it continues to open stores. After opening its first 59 Fresh & Easy units in Arizona, California and Nevada, management will wait three months before a further roll out, with the exception of a few Phoenix stores.

Why?

Wal-Mart Ramping Up Against Tesco?

Is Wal-Mart taking on Tesco as the latter ramps up its US presence? Yes, according to a report in the Financial Times. Wal-Mart is apparently testing four 20,000-sf, grocery-store units to compete with the British retailer’s rollout , which will feature 10,000-sf locations.

The article says that the logo of the new store come “with a stylised tomato, egg and grape topped by a Wal-Mart blue star” guesses that the store will “have a far stronger stress on fresh foods.”