Fresh & Easy Could Leave The United States – Can This Enterprise Be Saved?
It’s a tough world for everyone right now — and grocery store chains, no matter how much they may seem like a staple, are no exception.
For Fresh & Easy, a grocery chain owned by Britain’s impressive retail giant Tesco — who happens to be the world’s fourth-largest food retailer — things just haven’t been panning out. After five years in the western United States, Fresh & Easy still hasn’t lived up to it’s money-making potential and, as a result, may decide to shut its doors permanently and leave the U.S. market.
At the beginning of the month, Tesco CEO Philip Clarke announced that Fresh & Easy was not going to achieve the scale and profitability it needed to within “a reasonable timescale” and would be reviewing options that “focus on those markets which can deliver the high returns which our shareholders rightly expect.”
Is that us, or does that sound like bad news?
The chain, modeled on the idea of being a “friendly neighborhood market that offers a simpler, more affordable way to buy groceries,” was set to be a success back in 2007 when it first entered the U.S. market. And for a while, there was quite a bit of fanfare about the new stores which offer private-label products and fresh produce in a smaller space.
But it seems that the concept may have fallen short, as many locations failed to perform and bring in sales and customers.
The reasons? Many of Fresh & Easy’s private-label products were proven to be even more expensive than their brand-name counterparts. This threw off American shoppers, who are far more brand-conscious than the British, according to the Wall Street Journal.
And yet another problem? Location, location, location. Fresh & Easy markets often opened in cities where people drive, which really meant that “the journey to a larger supermarket — with all the national brands and a wider selection —- was in many cases only a few extra minutes down the road,” argues the WSJ. Perhaps Tesco’s project would have done better in, let’s say, New York?
Can this chain be saved?
It’s not certain — I ran into the same problems when I was living in Los Angeles and visited a Fresh & Easy for the first time (I was told it was a cross between a grocery store and Ikea.) Although the store was spotless and the products looked decent enough, I just wasn’t sure about paying $4.00 for the store-brand pasta sauce when there was really nothing that differentiated it from a jar of Ragu. Their ready-made meals reminded me of cold meals at the convenience store (read: unappetizingly sketchy) and their produce section was lacking. Truthfully, I left empty-handed. And there were probably other shoppers who did, too.
Despite all of the negativity, there have been talks with other parties about saving Fresh & Easy — but we’ll just have to see how it plays out.
via Just Food, Mercury News/ photo courtesy Bloomberg
