March 31, 2008

"Fresh and Easy" no so fresh and easy?

Well quite frankly we are not surprised by this news below. There is nothing "fresh" or "easy" about Fresh & Easy. Most of the produce is packaged in environmentally unfriendly plastic bubbles. Oh and they give you a nice "free" re-usable big PLASTIC bag upon checkout. I would not make a big deal over this fact but for the reason that the chain makes such a big deal about their environmental "consciousness". There is no selection (due to the small store size) and you have to check yourself out. So its not "easy". Also I would have spent less time just going to Pavillions or some other major chain store and getting all the items I wanted rather than just 50% of what I wanted. How is going to two stores to get what you need "easy"? Also the parking lot is 1/3 the size of Pavillions (which is across the street) so really its harder to find a parking spot not "easier". (well that really is not true most of the time as no one is in the Fresh & Easy store most of the time). Oh and of course there is the one "hybrid" parking spot front and center. What a joke. I wonder what "enviro-marketing" guy came up with that and what it cost them. I really dont understand this whole concept of a "mini" store with 1/3 the items and I suspect in a year this location in Lakewood will be gone. Oh and finally the prices are no great deal either so Food 4 Less and Costco see no competition here. Time for the red coats to pack up and go back to the UK. The Revolution is over.

Tesco Puts The Brakes On U.S. Expansion Of Fresh & Easy
March 31, 2008

By Steve Goldstein

LONDON (Dow Jones) -- Britain's Tesco is halting for three months the expansion of its U.S. operation Fresh & Easy, the food-retailing unit meant to carve out a niche between convenience stores and the massive warehouse-style retailers.

Tesco said the suspension of its expansion of the 59-store chain was planned and that it was "pleased" with its performance.

"We've given ourselves a little bit of time to kick the tires, smooth out any wrinkles, and make some improvements that customers have asked for," the company said in an blog entry.

Improvements made over the last few months include accepting American Express credit cards alongside those of MasterCard and Visa, the company said.

Fresh & Easy operates on the West Coast, with stores in Las Vegas, Phoenix, Los Angeles and San Diego.

It focuses on ready-to-eat meals and fresh products, and its arrival put a scare under firms ranging from Wal-Mart Stores (WMT) to Kroger (KR) to Whole Foods Markets (WFMI).

"Tesco suggested it wanted Fresh & Easy to have the convenience of Walgreens, the value of Wal-Mart, the fresh food quality of Whole Foods, and the differentiated product range of a Trader Joe's," said Credit Suisse analyst Andrew Kasoulis in a note last year.

"We think the format largely seems to have achieved that."

But the Sunday Telegraph, which first published the news about the delay, said there were rumors that the concept had missing internal sales forecasts. The report suggested that Fresh & Easy wasn't getting the customer traffic it needed to drive sales growth.

Shares in Tesco dropped 3.5% on Monday, one of the worst-performing FTSE 100 stocks -- underperforming even Terminal 5-ravaged British Airways.

Clive Black, an analyst at the U.K. brokerage Shore Capital, said the operation needs to be seen in context.

"The business is tiny within the context of the group, and even if it did fail (which we're not assuming), a 1 billion-pound cost within a business that has a market capitalization of over 30 billion pounds needs to be reflected upon," he said.

"Tesco management has consistently said to us that this is a risk-reward equation that is manageable and favorable, and this can remain the case."

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