AirTalk for March 25, 2013

Fresh and (not so) easy for British grocer to make it in the States

Tesco Opens First Of Its "Fresh & Easy" Stores In L.A

David McNew/Getty Images

This was one of the first 16 stores that Fresh & Easy opened in the U.S., and this was — and still is — in Los Angeles. But now the British-owned chain, after a $1.6 billion investment, will likely leave the U.S. market or see its parent, Tesco, sell it.

The British company Tesco had high hopes for its Fresh and Easy chain of grocery stores in Southern California. The store is a smashing success in its homeland, and the goal for Tesco was to position Fresh and Easy as an alternative to Trader Joe’s in California. Like the Southland favorite, Fresh and Easy specializes in prepackaged meals and fresh produce.

To further ingratiate itself, Fresh and Easy spent years researching American consumer habits, even going so far as to shadow customers while they shopped at their local grocer. But things aren’t looking too good for the interloping competitor. For several reasons, Fresh and Easy has failed to connect with Americans in a significant way. Experts attribute the disconnect to some of the products the store sells, which are still quintessentially European, or the fact that produce comes in bags and can’t be purchased individually.

Also, Fresh and Easy hit a snag with labor activists for being anti-union, since they depend on unmanned self-checkouts in all of their stores. The company also seemed to overshoot when it built its huge distribution center in Riverside County, and it failed to specialize its merchandise given the location of its stores. As a result, the chain is operating at a $2 billion loss.

Is there a Fresh and Easy in your neighborhood? Were you impressed with the stores, or turned off? Why do you shop where you shop? What are you looking for in your local grocer?

Guest:
Jim Prevor, of PerishablePundit.com, a website and blog dedicated to the food marketing business


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