Fresh & Easy

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fresh&easy
Type Grocery
Founded 2007 Greater Los Angeles Area
Headquarters El Segundo, CA
Industry Supermarket/Retail
Products Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor
Parent Tesco
Website freshandeasy.com

Fresh & Easy, or, in full, Fresh & Easy Neighborhood Market, is a chain of small supermarkets on the West Coast of the United States. It is a subsidiary of the UK-based retailer Tesco, the world's third largest retailer, and is Tesco's attempt to expand into the United States.[1] It has plans for rapid growth - the first stores opened in November 2007 and there are now (May 31, 2009) 120 stores in Southern California, Arizona and Nevada. With 4 new stores opening in July 2009.

Contents

[edit] Tesco's initial United States expansion plans

On February 9, 2006, Tesco announced that it planned to move into the United States by opening a chain of small format grocery stores on the West Coast (Arizona, California and Nevada) in 2007 named Fresh & Easy.[2] The initial planned capital expenditure is up to £250 ($507m) million per year. Tesco CEO Terry Leahy stated,

"We have committed serious resources to developing a format that we believe will be really popular with American consumers".

Investors responded with some skepticism to the project, with a small fall in the company's share price on the day of the announcement.[3]

There is a distribution centre in Riverside, California and the company will initially expand into northern and southern California, Phoenix, Arizona, and Las Vegas, Nevada.[4] The San Francisco Bay Area will be served by a new distribution centre in Stockton, California that shall feed into 500 planned Bay Area stores.[4]

Three months later, in May 2006, the Los Angeles Times reported that Tesco had purchased a 130,000 m2 (1,400,000 sq ft) distribution centre in Riverside County, California, near Los Angeles, and planned to acquire another in Phoenix, Arizona. The markets were expected to be around 1,400 m2 (15,000 sq ft) - good sized supermarkets in many countries, but about one-third the size of an average supermarket within the U.S..[5]

By January 2007, Tesco opened its U.S. headquarters in El Segundo, California,[6] near Los Angeles International Airport. Tesco also began construction on the Riverside County distribution centre in Moreno Valley, California near the former March Air Reserve Base.[7] This distribution centre will have California's largest solar panel roofing system.[8] The company is looking for another distribution centre location in Stockton, California, strategic for entering the Northern California region.[9]

On 21st April 2009 Tesco reported a trading loss of £142m from Fresh & Easy. [10]

[edit] Stores

[edit] First U.S. stores

Fresh & Easy had announced in October 2007 that the first California and Arizona stores would open November 8.[11] However on November 1, 2007, Fresh & Easy opened its first store, in Hemet, California, as a "soft opening". (Soft openings are traditionally done in the retail business to test systems and store staff, and prepare for a larger "grand opening.") The Hemet store, near the company's distribution center, along with five others in Los Angeles and Orange Counties, then had their "grand opening" on November 8, 2007.

Fresh & Easy Neighborhood Market currently employs 20 to 30 associates per store.

In California and Nevada, part time employees are paid a starting hourly wage of $10 hour. Those who work at least 20 hours per week get a health insurance plan which they also contribute to. Assistant managers, called Team Leaders, currently are paid $13 hour. In Arizona, each of these positions pay $1 per hour less.

Two of the current 76 Fresh & Easy Neighborhood Market stores are located in urban underserved areas, also called "food deserts," where there are few if any supermarkets. One is the Eagle Rock or Glassell Park store and the other store is in Compton, California.

Tesco will open three Fresh & Easy Neighborhood Market stores in underserved neighborhoods in Northern California early next year: one in San Francisco's Bayview-Hunters Point neighborhood, one in a neighborhood in Oakland currently underserved by supermarkets, Oakland,and one in the Oak Park Neighborhood of Sacramento. The Oak Park location is being developed by former NBA star Kevin Johnson, elected in November 2008 as Mayor of Sacramento.

From April, 2008 until the end of June, Fresh & Easy Neighborhood Market took a pause from opening any new stores. That hiatus was lifted with the July 2, 2008 opening of a store in Manhattan Beach, California. Tesco now has 100 total Fresh & Easy stores as of November 12th, 2008. The newest store in the chain will open in mid-January 2009 in Duarte, California.

[edit] Southern California

In 2007, Tesco identified many initial Southern California locations,[12][13][14][15] and as of January 12, 2008, there is a network of 56 stores currently open.

[edit] Arizona

July 2007, Tesco announced plan for several Arizona[16] stores. The first Mesa, Arizona, store opened December 5, 2007.[17] As of January 12, 2009, 28 locations are in operation in the greater Phoenix area. [18] Since the U.S. economic collapse, construction on at least one of the planned Phoenix locations has been put on hold. As of July, 2009, shelves in some of the existing Phoenix area stores have been cleared of merchandise to make room for new items the chain plans to carry.

[edit] Nevada

Fresh & Easy market in Las Vegas, Nevada

The first five Nevada stores opened in the Las Vegas area November 11, 2007.[19] As of January 12, 2009, 25 locations are in operation in and around Las Vegas.

[edit] President and CEO

Tim J.R. Mason is the President and Chief Executive Officer of Fresh & Easy.[20] He joined Tesco in 1982 and became a member of the Board in 1995.[21] Mason relocated to the U.S. with his family as part of the assignment of building the U.S. presence. He led the team researching the U.S. market prior to the company opening its first American store.

"Probably the most surprising thing to me was the number of different stores that an American family uses to shop. They shop in up to 20 different stores – many more than the equivalent would in the UK. They will use different types of shop for their food, for their cleaning products and for their personal care products. What I discovered is that you just can't get everything that you want in one place... The main retail brands in Britain have much higher levels of loyalty and genuinely do fulfil the notion of a one-stop shop. That's less of the case here. People will wait for flyers and coupons and indeed, people who have time but not money, will actually take their shopping list and walk to two or three big players and then decide what to buy."—Tim Mason, 2007[22]

[edit] Environmental goals

Fresh & Easy states it has made a commitment to building Leadership in Energy and Environmental Design certified buildings. It will recycle or reuse shipping and display products. Its food transportation trailers are hybrid electric-diesel[23]. The Riverside distribution center hosts California's largest solar roof installation.[24] Stores are equipped with LED lights in freezers, coolers and for outdoor signage.[25] Some stores have reserved parking for hybrid cars.

[edit] References

  1. ^ http://money.cnn.com/2007/02/26/magazines/fortune/pluggedin_tesco.fortune/index.htm Fortune, February 27 2007: 10:05 AM EST, retrieved 2007-07-20
  2. ^ "Tesco to enter United States". http://www.tescocorporate.com/page.aspx?pointerid=14163CB2412F41B1BD7765AC8DBE49EB. Retrieved on 2006-03-13. 
  3. ^ "Tesco plans foray into US market". BBC. February 9, 2006. http://news.bbc.co.uk/1/hi/business/4695890.stm. 
  4. ^ a b Tesco signs deal for Fresh & Easy store in Bayview by J.K. Dineen, San Francisco Business Times, December 11, 2007, access date June 28, 2008
  5. ^ Britain's Tesco to Open Its First U.S. Stores in Southland, Los Angeles Times 20 May, 2006. [1]
  6. ^ http://www.elsegundo.net/upscale-british-retailer-moving-into-south-bay-12-09-2006.html Upscale British retailer moving into South Bay, retrieved 2007-07-20
  7. ^ http://www.pe.com/localnews/southwest/stories/PE_News_Local_D_tesco25.1a57de7.html | I-215 LAND DEAL: Great Britain's largest grocery chain buys 88.4 acres (358,000 m2) in an Inland business park | accessdate=2007-07-20
  8. ^ http://www.upi.com/Energy/Briefing/2007/06/22/tesco_to_install_solar_roofing_system/3812/ Tesco to install solar roofing system, SAN DIEGO, June 22 (UPI), retrieved 2007-07-20
  9. ^ Josh Fineman (2007-12-04). "Tesco Is a `Manageable Threat' to Safeway in U.S. (Update2)". bloomberg.com. http://www.bloomberg.com/apps/news?pid=20601102&sid=a_ehpKPFqg88&refer=uk. Retrieved on 2007-12-03. 
  10. ^ http://www.thisismoney.co.uk/markets/article.html?in_article_id=482959&in_page_id=3
  11. ^ Cathryn Creno (2007-10-12AM). "British grocer Tesco will open 1st U.S. stores soon in Calif., Ariz.". azcentral.com (The Arizona Republic). http://www.azcentral.com/arizonarepublic/business/articles/1012biz-tesco1012.html. Retrieved on 2007-10-13. 
  12. ^ http://www.freshplaza.com/2007/0208/re_us_tesco.html US: Tesco ready to test new store concept in U.S. launch, retrieved 2007-07-20
  13. ^ http://www.presstelegram.com/news/ci_6418975 Tesco comes to town, retrieved 2007-07-20
  14. ^ http://symblogogy.blogspot.com/2007/04/tescos-usa-operations-go-live-fresh-and.html TESCO’s USA Operations Go Live Fresh ... And Easy (UPDATED 6-21-07), retrieved 2007-07-20
  15. ^ http://business.scotsman.com/index.cfm?id=1130482007 Hollywood beckons for Tesco, retrieved 2007-07-20
  16. ^ http://www.azcentral.com/arizonarepublic/business/articles/0705biz-tesco0705.html Arizona Republic, July 20, 2007, retrieved 2007-07-20
  17. ^ "The fresh&easy Neighborhood Market". 2007-12-02. http://www.newszap.com/articles/2007/12/03/az/east_valley/em01.txt. Retrieved on 2007-12-03. 
  18. ^ "Fresh&Easy delays openings". 2008-04-01. http://www.azcentral.com/business/articles/0331biz-freshandeasy0401-ON.html. Retrieved on 2008-04-01. 
  19. ^ Zoe Wood (2007-11-11). "Tesco has a flutter in Vegas". guardian.co.uk. http://www.guardian.co.uk/business/2007/nov/11/tesco.businessandmedia. Retrieved on 2007-12-03. 
  20. ^ "EXECUTIVE PROFILE* Tim J. R. Mason". businessweek.com. http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=654392&symbol=TSCO.L. Retrieved on 2007-12-03. 
  21. ^ "Board of directors". http://www.tescocorporate.com/page.aspx?pointerid=E2FD4202BBB94E7EAF5375C88FD67FA2. Retrieved on 2007-12-03. 
  22. ^ Judie Lannon (Autumn 2007, Issue 38). "Every little helps: fresh&easy brings 21st century retailing to the US". World Advertising Research CenterLtd. http://209.85.173.104/search?q=cache:X1Iza2fpvTAJ:www.themarketingsociety.org.uk/growth%2520drivers/ML_Tim_Mason.pdf+%22tim+mason%22+fresh%26easy&hl=en&ct=clnk&cd=2&gl=us. Retrieved on 2007-12-03. 
  23. ^ Transicold Newsletter, http://www.penndda.com/carrier/pdf/ExtraMile.pdf
  24. ^ "Fresh & Easy Neighborhood Market Announces Date for First Store Openings". PR Newswire. 2007-10-09. http://www.kvoa.com/global/story.asp?s=7190009&ClientType=Printable. Retrieved on 2007-12-03. 
  25. ^ "Fresh & Easy Neighborhood Market Keeps it Simple and Keeps Prices Low". PR Newswire. 2007-11-01. http://www.smartbrief.com/news/aaaa/industryPR-detail.jsp?id=9BF20054-5185-40AA-8735-49F477117508. Retrieved on 2007-12-03. 

[edit] External links

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Annual Group Revenue: GB£54,327 million · Employees: 345,754 · Stock Symbol: (LSE: TSCO) · Website: www.tesco.com
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