Fresh look for Fresh & Easy

Tesco rethinks format to create a 'warmer' feel as it prepares to press on with US store openings

Tesco is revamping its Fresh & Easy stores in the US to create a "warmer" shopping environment as the grocery giant gears up to resume openings.

The 61 Fresh & Easy stores, which launched with a functional design and basic layout, will be given more colour and signage. The overhaul is in response to shopper feedback.

Tesco corporate and legal affairs director Lucy Neville-Rolfe said consumers' reaction to Fresh & Easy has been "very strong" and confirmed the shop improvements. She said: "We've been working on brighter stores, better ranging, signage – the sort of things we always do when we move into a new market."

The grocer, which opened its first Fresh & Easy store in November last year, paused expansion in April to assess the format. As part of the refresh, which will be completed by July, further signage will be added to popular products.

A Tesco spokesman said the design has been "tweaked" and, while it will maintain its clean look and feel, the changes should help shoppers "dash in and find the milk or whatever other products they want to find quickly and easily".

The grocer has also added a further 250 products to its own-label line, including new ready meals and juices, and the stores now also take American Express cards.

"Tesco took a break in order to tweak a few things," said Planet Retail grocery research manager Natalie Berg. "The concept is hugely innovative, but, as other supermarkets in the US are full of signage and promotions, the Fresh & Easy stores can look a little stark in comparison."

On July 2, Tesco will open a store at Manhattan Beach, California, and remains committed to having a total of 200 stores in the country by the end of the year.

On Tuesday, Tesco reported group sales for the 13 weeks to May 24 rose 13.7 per cent. In the UK, like-for-like sales were up 3.5 per cent, excluding petrol, but non-food growth slowed.

Neville-Rolfe said: "We're well within our 3 to 4 per cent like-for-like target and are in good shape.

"We've seen good growth in our core food categories, but what we find is higher food prices affect non-food demand. We have focused on how we can help people save money."

Source: Retail Week

Tesco delays openings to 'smooth out any wrinkles'

Tesco PLC said it will take a three-month break from opening Fresh & Easy Neighborhood Markets in the United States to "smooth out any wrinkles."

After opening the first 50-plus Fresh & Easy stores, Tesco is "pausing for breath," Simon Uwins, Fresh & Easy chief marketing officer, wrote in his blog last week.

Fresh & Easy recently announced 17 Greater Sacramento locations for the chain and it is seeking more here. The company opened its 50th U.S. store last month as part of a rollout that began in Southern California, Las Vegas and elsewhere in the Southwest.

Fresh & Easy has grown to almost 2,500 employees from 200 in nine months, and will exceed 5,000 staffers in another nine months. The company also has ramped up to 59 stores from none in just over four months, Uwins wrote.

Now, it's time to allow the business "to settle down," he said in his blog. "So we've given ourselves a little bit of time to kick the tires, smooth out any wrinkles and make some improvements that customers have asked for."

Fresh & Easy will take the three-month break from new store openings except for opening a "couple" more in Phoenix, he wrote.

The hiatus will allow the company to accelerate its openings and "restart what's been described as an opening program on steroids."

A Piper Jaffray analyst said mid-month that Fresh & Easy is failing to attract shoppers and has missed its early sales targets by 70 percent.

Tesco had hoped to bring in sales of $100 million over six months, the report said, but had sales of only $30 million in that period, according to the analyst's report, which was based in part on information from suppliers.

Tesco, in published reports, said it was "bewildered" by the revenue assertions and called the report "utterly baseless."

"We are very pleased with customer reaction to Fresh & Easy, which is growing rapidly," a Tesco spokesman told the Guardian newspaper.

Tesco has said there's room for up to 1,000 of the Fresh & Easy stores in the United States.

In November, when the company opened its first Fresh & Easy store, it expected to have 200 stores by the end of this year.

"We're delighted with the openings," Uwins wrote in his blog. "There's always been a line of customers waiting for each store to open."

The average Fresh & Easy is about 10,000 square feet, three times larger than a convenience store but a fraction the size of a supermarket.

Source: BizJournals