Fresh & Easy presses on with plans for Valley
A British company that dreams of changing the way Americans shop for groceries says its plans for the Valley are back on track after a recession-driven delay.
Tesco, a giant grocery and retail chain often compared to Walmart, says it will open six of its small-scale Fresh & Easy grocery stores in the region by the end of February. They are among 12 stores the company expects to eventually open in Fresno, Reedley and Lemoore.
Some analysts have watched Fresh & Easy’s expansion plans with skepticism. The delayed openings and doubts over whether the stores are meeting their sales goals have left them waiting to see how the newcomer performs.
“That market is pretty finicky,” said Scott Testa, a professor who follows the retail business at Cabrini College in Philadelphia. “They have to bring their A game.”
Established U.S. competitors are not likely to sit still as Tesco expands, Testa said.
Safeway is testing a small-scale store in Long Beach and San Jose called The Market, and Walmart is testing its small “community grocery” Marketside stores in Arizona.
Selling its Fresh & Easy brand and other products created specifically for the chain helps to keep costs down, Wonnacott said. The company also designed its stores and supply system from scratch, allowing it to build in efficiencies that other chains don’t have.
The emphasis on prepared foods also will help the company’s bottom line, Testa said.
“The profit margins are … really good compared to traditional foods,” he said.
Fresh & Easy’s everyday prices aren’t as low as other supermarkets or Walmart Supercenter food prices, said Prevor, who is based in Boca Raton, Fla., but has visited and studied Fresh & Easy stores.
But the chain has made up for that by offering steep discounts on sale items that often beat other retailers, he said.
How the stores perform in California will be a test for the future of the company, Testa said. Many retailers like to see how they do in the state before expanding east, he said.
“I think they have dreams of bigger and better things,” he said.
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