Tesco's Fresh and Easy

From the Morningnewsbeat.com


Report: Tesco Targeting Windy City For Fresh & Easy
The Chicago Sun Times reports that British retailer Tesco, which has been opening Fresh & Easy Neighborhood Markets in California, Arizona and Nevada, is looking for locations in Chicago, with Arlington Heights, Illinois, mentioned as a potential location.

“Though the Chicago area grocery market has become increasingly competitive with entries and expansions by Trader Joe's, Whole Foods, Aldi, Costco, Food 4 Less, Roundy's, Target and Wal-Mart, a Fresh & Easy Neighborhood Market would be unique because of its strong offerings of prepared foods, packaged perishables and selections of produce, meat and bakery,” the Sun Times writes.

Tesco is not commenting on the report, and no timetable is suggested for when the Chicago openings might occur. The Sun Times attributes the report to “knowledgeable sources.”



KC's View: It has been often said in this space that it is extremely likely that Tesco has people on the ground in virtually every market that it thinks has potential…and that certainly includes places like Chicago, Atlanta, Denver, Boston and Seattle. That doesn’t mean they’ll be opening in these markets soon, but Tesco is nothing if not incredibly disciplined an forward-looking in how it approaches growth in new markets.

One other thing also seems sure. The Fresh & Easy stores that it opens a year from now will not be identical to the ones it opened first…because Tesco also will continue to learn. Fresh & Easy 2.0 should be fascinating.

From Morningnewsbeat.com




Fresh & Easy? Or “Ambient and Quite Difficult”?

In the UK, the Evening Standard reports that an analyst at brokerage Piper Jaffray, Mike Dennis, is saying that Tesco’s US Fresh & Easy Neighborhood Markets are generating sales that are short of the company’s targets: “The Fresh & Easy concept is not right and they need to quickly find out what the issues are and reset the concept,” he says.

Dennis suggests that the stores are doing an average of $170,000 a week in sales, and that the company was hoping to do $200,000. “The overall indication seems to be negative,” he says, according to the Evening Standard. “This begs the questions of how bad it could be for Tesco's Fresh & Easy stores across California, Arizona, Nevada and what it would mean to Tesco's long-term growth rates and international strategy in the US.” The paper suggests that it could cost close to $800 million for Tesco to pull out of its US venture.

A Tesco spokesman responded: “This appears to be a bit of scaremongering particularly as Mike Dennis hasn't even spoken to us about Fresh & Easy's performance. It is ridiculous to make judgments just four months after the first store opened. I don't know when Mike last visited California but the up-to-date picture is one of growing sales, increasing customer numbers and more repeat visits.”



KC's View: I repeat – it is way too early to judge Fresh & Easy a success or failure, especially because the next generation of stores undoubtedly will learn much from the first 50. Tesco is smart and wealthy…I’m not sure that quitting, just three months into a venture, is the intelligent thing to do.

From Morningnewsbeat.com


Tesco’s Fresh & Easy To Set Up Shop In Chicago

In the UK, The Independent reports that Tesco is getting ready to set up an office in Chicago that will serve as a precursor to an eventual opening of its Fresh & Easy Neighborhood Markets there.

According to the story, a team of executives already has a team of executives on the ground there, looking for property that can used both for retail stores and a Midwest distribution center. Matthew Price, a real estate director for Fresh & Easy, is said to be in charge of the Chicago property acquisition team.

No target date has been set for when Fresh & Easy might begin opening stores in Chicago.

As the Independent writes, “The revelation is the clearest indication yet that Tesco intends to gain geographical spread in the US beyond the 71 Fresh & Easy stores it has already opened in southern California, Arizona and Nevada.”



KC's View: No surprise here, except maybe to some folks who have been predicting Fresh & Easy’s imminent demise.

This isn’t to suggest that Tesco’s US operations are glitch free and ready for prime time. But Tesco obviously believes that it is onto something, and that momentum is important if it is going to attain critical mass.

...packaged perishables...

I wonder if this means, like, premade sandwiches wrapped in plastic and ready to go. When we were in London recently we discovered a chain called Pret a Manger, which was kind of like an "automat" devoted to having a wide variety of actually interesting sandwiches packaged in plastic triangles. You pick out what you want and take it to the register, then either eat it at one of the tables there or take it with you. It sounds "pre-fab," but in a certain situation we found ourselves in (hungry, but not wanting to or able to spend a whole lot of time over lunch, yet wanting the security of someplace clean and reliable and not too exotic), it turned out to be perfect and we were grateful to find one in the neighborhood we were in. The sandwiches were pretty decent.

riddlemay wrote:which was kind of like an "automat" devoted to having a wide variety of actually interesting sandwiches packaged in plastic triangles. You pick out what you want and take it to the register, then either eat it at one of the tables there or take it with you. It sounds "pre-fab," but in a certain situation we found ourselves in (hungry, but not wanting to or able to spend a whole lot of time over lunch, yet wanting the security of someplace clean and reliable and not too exotic.

I think that there is a HUGE market for good HEALTHFUL prepared food at a DECENT price, especially in a grocery store. Many times, I end up at fast food because there are no other options for the limited time I have.

The local Dominicks has a salad bar BUT a reasonable salad is well over $6. Jewel used to have a good salad for $1.99, but that climbed to $3.99 after the SuperValu acquisition.

Personally, I like the Tesco-UK supermarkets and I think that their website is by far, the best in the industry (although they do not ship to the US).

I am not as enamored with the concept as my friend (the publisher of the newletter). However, I think that more competition is better.

riddlemay wrote:When we were in London recently we discovered a chain called Pret a Manger, which was kind of like an "automat" devoted to having a wide variety of actually interesting sandwiches packaged in plastic triangles.

How much did a pre-fab sandwich run in London? Just curious as I'd read a little about this chain in the past.

The cool thing about Pret a Manger was that you didn't have to go into a big grocery store to get your prepped, prefab (yet very good) sandwich--you went into something more resembling a fast-food restaurant, but nicer. So if lunch was what you were after, you were in a place that was purpose-built for that, with none of what you weren't looking for. The place felt good. It was like they were saying, "We understand you don't have much time. That doesn't mean you should suffer by having to eat bad food."

I see from the website that they have several locations in NY now. I'm sure it's only a matter of time before they're here. Wonder if they're actually owned by Tesco.

As for price, I don't remember specifically other than it was reasonable (maybe a little less so because of the exchange rate, but you can't blame them for that).

Wonder if they're actually owned by Tesco.

They are privately held.

riddlemay wrote:The cool thing about Pret a Manger was that you didn't have to go into a big grocery store to get your prepped, prefab (yet very good) sandwich--you went into something more resembling a fast-food restaurant, but nicer. So if lunch was what you were after, you were in a place that was purpose-built for that, with none of what you weren't looking for. The place felt good. It was like they were saying, "We understand you don't have much time. That doesn't mean you should suffer by having to eat bad food."

There was a concept very similar to Pret a Manger in the Loop for some time . . . I can't remember its name . . . some permutation of the word "fresh," if I'm recalling correctly. (There were locations on Dearborn & Washington [I think there's a Quizno's there now] and LaSalle & Lake.) But you walked in, and there were refrigerators lining the walls from which you would choose pre-made sandwiches and salads. Over time, the pre-made section diminished in favor of made-to-order sandwiches; then the chain tanked completely. I think Americans have a bias against anything pre-made, sealed, and sitting in a cooler at anything but a grocery or convenience store.

I ate at Pret a lot during the two sojourns I had in London. While I thought the food was passable, I ate there mostly for convenience (there was one at the end of the street where my school was located) and for price (relatively inexpensive). I remember some bacon and avocado sandwich I liked just fine, but remember the sturdy, practical brown bread on the sandwich as being something close to what would have been government-issued during WWII in London. I would firmly equate them to Au Bon Pain in the U.S.

From Morningnewsbeat.com:


Fresh & Easy: Designed For A Roll-Out, Not To Entice Shoppers?

Interesting piece in the UK’s Telegraph about Tesco’s Fresh & Easy stores, with columnist James Quinn examining where the chain may have gone wrong. Here is the section that seems the most telling:

“…in a tranquil area on the edge of the mid-market Manhattan Beach, lies an F&E store that boasted the retailer's largest launch to date - with almost 2,600 customers on its first day - when it opened in early July.

“But on the mid-week morning when I arrive, all is quiet. The 2,000 sq ft store, very similar in feel to a large Tesco Express, does not look busy. At the back of the store is what is heralded by my F&E guide as the heart of the store - the ‘Kitchen Table’, essentially a demonstration area run by a member of staff who chooses what items to display.

“It's a nice idea, but far from original, as can be seen across the car park at rival retailer Trader Joe's whose ‘Snack Shack’ concept looks very similar.

“As we wander further around the store, in spite of the clearly fresh produce, it feels a little cold - and not just in temperature - despite a recent revamp by F&E.

“There are nice, localised features - a small, child-height poster encourages youngsters to locate a hidden cuddly toy within the store in return for a prize - but they are few and far between. By and large, this is very much a store that has been designed to be rolled out, rather than one designed to entice customers.

“At Trader Joe's the opposite is true. With a strong smell of cooking out front – coming from some beef being grilled at the Snack Shack - the shop is positively buzzing with customers. Gregarious staff chat away in a relaxed environment designed with a tropical surf shack in mind.

“It's then that it becomes clear: the cheery staff-led atmosphere is what's missing in F&E. Because F&E's tills are entirely self check-out, there is little interaction between the retailer and the customer. Given the outgoing nature of most Americans - and in particular Californians - F&E might have just missed the point.

“One block away, at larger rival Bristol Farms, a woman offering free samples of the latest oxygenated water pounces almost before customers get through the doors. Although it's much larger than F&E it also has much more to offer shoppers. Like the nearby Whole Foods, which is just a two-minute drive away, it offers seating for people to eat their purchases from the deli, creating a sense of belonging to the shop that F&E does not.”



KC's View: I was struck by the phrase, this is very much a store that has been designed to be rolled out, rather than one designed to entice customers. Because that does seem to capture the complaints that a lot of people have about Fresh & Easy.

Now, it needs to be said that the F&E management continues to defend the format, saying that everything is working the way it should, and that with a Northern California rollout scheduled for next year and apparently plans being hatched to bring F&E to Chicago at some point, there is little evidence that Tesco is going away. And I’m perfectly willing to accept the premise that 1) they’re smarter than I am, and 2) they know something I don't know about why this format makes sense.

But it is having been to both that Bristol Farms and that Trader Joe’s, and knowing how bustling and vibrant they are, it is hard to reconcile the reports of F&E’s relatively empty aisles with the notion of success.

The cool thing about Pret a Manger was that you didn't have to go into a big grocery store to get your prepped, prefab (yet very good) sandwich--you went into something more resembling a fast-food restaurant, but nicer. So if lunch was what you were after, you were in a place that was purpose-built for that, with none of what you weren't looking for. The place felt good. It was like they were saying, "We understand you don't have much time. That doesn't mean you should suffer by having to eat bad food."

I see from the website that they have several locations in NY now. I'm sure it's only a matter of time before they're here. Wonder if they're actually owned by Tesco.

They've been in NY for several years. I seem to remember reading they the chain is not doing that well. If they were, they probably would have rolled out to more markets by now.

There was a concept very similar to Pret a Manger in the Loop for some time . . . I can't remember its name . . . some permutation of the word "fresh," if I'm recalling correctly. (There were locations on Dearborn & Washington [I think there's a Quizno's there now] and LaSalle & Lake.) But you walked in, and there were refrigerators lining the walls from which you would choose pre-made sandwiches and salads. Over time, the pre-made section diminished in favor of made-to-order sandwiches; then the chain tanked completely. I think Americans have a bias against anything pre-made, sealed, and sitting in a cooler at anything but a grocery or convenience store.

Briazz...I believe.