Another British Invasion
Tesco, the largest supermarket chain in Great Britain, is set to start to a food fight in Southern California and greater Phoenix with the launch of its "Fresh & Easy" concept.
Having established itself as the undisputed king of retailing in England and an international powerhouse that gives Wal-Mart a run for its money in many foreign markets, Tesco is ready to invade the United States. The company has dedicated millions of dollars and years of market research to perfect its plan to open more than 100 stores here in 2007, serving consumers with a "niche" format that lies between convenience stores and supermarkets.
While the company has remained tight-lipped regarding its West Coast expansion, rumor has it that the company has established a corporate beachhead in El Segundo (near LAX) and is looking for distribution centers in San Bernardino and Phoenix, each of which will be larger than a million square feet and able to serve hundreds of stores. In addition, Tesco is actively seeking out buildings in the range of 14,000 square feet with an immediate trade population of 15,000 people and parking spaces for at least 70 cars.
Based on the company's successful "Tesco Express" stores in Europe and Asia, the "Fresh & Easy" stores will be about one-third the size of the average supermarket in the United States. These units should be a welcome respite from the largess of American retail outlets; a typical Wal-Mart "Supercenter" is over 200,000 square feet, and even its "Neighborhood Market" stores are more than twice as large as Tesco's concept. "Fresh & Easy" will serve as a convenient alternative to time-strapped families who are looking to get groceries without wasting a lot of time.
Although Tesco's U.S. format has been compared to the wildly successful Trader Joe's chain, which also originated in Southern California, "Fresh & Easy" will focus on perishable goods like produce and meat that aren't available at Trader Joe's and convenience stores like 7-11 and Circle K. The British are offering Americans a new kind of grocery store, and they're betting that the concept will resonate with consumers and begin to make a profit within 2 short years.
Southern California is a good market for Tesco, as it is one of the few regions Wal-Mart hasn't penetrated and contains millions of shoppers who seem to value all things "fresh" and "easy." While it will be hard for the company to find appropriate locations for 14,000 square foot stores with ample parking in Los Angeles' urban core, it should have an easier time establishing itself in the suburbs (i.e. the San Fernando Valley, Orange County, and the Inland Empire) and San Diego. Its main competitors are Ralphs (a division of Kroger), Vons (a division of Safeway), and Albertsons, all of which have moved "upscale" while ignoring the casual customer who comes in for a loaf of bread or a batch of bananas.
The Phoenix market is a different animal, but it may also warm up to Tesco. Wal-Mart is a major operator there, with a growing cadre of Supercenters and Neighborhood Markets. However, central Arizona is a largely wealthy place with customers who will value being able to pick up "meal replacements" without being seen at downscale places like Wal-Mart or Circle K. Furthermore, there are plenty of sites on the suburban fringes that could accomodate a "Fresh & Easy" unit without exorbitant land acquisition costs. Its main competitors are Fry's (a division of Kroger), Safeway, and homegrown Bashas', all of which are building bigger stores to compete with Wal-Mart while ignoring the appeal of convenience. If Tesco can succeed in both Southern California and central Arizona, there is little doubt it can succeed everywhere.
2007 may prove to be a watershed year in American retailing history, as Tesco moves into Wal-Mart's home turf. However, there is no guarantee that "Fresh & Easy" will prove successful and transform American retailing. A year from now, all eyes will be on the ambitious Brits, invading our West Coast with the hope that it can sell us food better than anyone else in the world.
Having established itself as the undisputed king of retailing in England and an international powerhouse that gives Wal-Mart a run for its money in many foreign markets, Tesco is ready to invade the United States. The company has dedicated millions of dollars and years of market research to perfect its plan to open more than 100 stores here in 2007, serving consumers with a "niche" format that lies between convenience stores and supermarkets.
While the company has remained tight-lipped regarding its West Coast expansion, rumor has it that the company has established a corporate beachhead in El Segundo (near LAX) and is looking for distribution centers in San Bernardino and Phoenix, each of which will be larger than a million square feet and able to serve hundreds of stores. In addition, Tesco is actively seeking out buildings in the range of 14,000 square feet with an immediate trade population of 15,000 people and parking spaces for at least 70 cars.
Based on the company's successful "Tesco Express" stores in Europe and Asia, the "Fresh & Easy" stores will be about one-third the size of the average supermarket in the United States. These units should be a welcome respite from the largess of American retail outlets; a typical Wal-Mart "Supercenter" is over 200,000 square feet, and even its "Neighborhood Market" stores are more than twice as large as Tesco's concept. "Fresh & Easy" will serve as a convenient alternative to time-strapped families who are looking to get groceries without wasting a lot of time.
Although Tesco's U.S. format has been compared to the wildly successful Trader Joe's chain, which also originated in Southern California, "Fresh & Easy" will focus on perishable goods like produce and meat that aren't available at Trader Joe's and convenience stores like 7-11 and Circle K. The British are offering Americans a new kind of grocery store, and they're betting that the concept will resonate with consumers and begin to make a profit within 2 short years.
Southern California is a good market for Tesco, as it is one of the few regions Wal-Mart hasn't penetrated and contains millions of shoppers who seem to value all things "fresh" and "easy." While it will be hard for the company to find appropriate locations for 14,000 square foot stores with ample parking in Los Angeles' urban core, it should have an easier time establishing itself in the suburbs (i.e. the San Fernando Valley, Orange County, and the Inland Empire) and San Diego. Its main competitors are Ralphs (a division of Kroger), Vons (a division of Safeway), and Albertsons, all of which have moved "upscale" while ignoring the casual customer who comes in for a loaf of bread or a batch of bananas.
The Phoenix market is a different animal, but it may also warm up to Tesco. Wal-Mart is a major operator there, with a growing cadre of Supercenters and Neighborhood Markets. However, central Arizona is a largely wealthy place with customers who will value being able to pick up "meal replacements" without being seen at downscale places like Wal-Mart or Circle K. Furthermore, there are plenty of sites on the suburban fringes that could accomodate a "Fresh & Easy" unit without exorbitant land acquisition costs. Its main competitors are Fry's (a division of Kroger), Safeway, and homegrown Bashas', all of which are building bigger stores to compete with Wal-Mart while ignoring the appeal of convenience. If Tesco can succeed in both Southern California and central Arizona, there is little doubt it can succeed everywhere.
2007 may prove to be a watershed year in American retailing history, as Tesco moves into Wal-Mart's home turf. However, there is no guarantee that "Fresh & Easy" will prove successful and transform American retailing. A year from now, all eyes will be on the ambitious Brits, invading our West Coast with the hope that it can sell us food better than anyone else in the world.
posted by Mitch Glaser @ 8:27 PM
14 comments
14 Comments:
Tesco is where my British Ben shops daily. It sounds like a good idea to me.
I want to open a store with the motto "rotten and difficult."
I wish TESCO the best with this new venture, but I wonder if people will truly "get it"
When I was helping out on a feature film in Thailand, we were stationed in a country-side province and one of the few things that prevented us from getting too homesick (or crazy for that matter) was a Tesco Lotus within walking distance of the hotel that had a decent Pizza Hut and KFC. Good to see this coming to SoCAL as it will now remind me of the good times I had in Thailand.
As former TJ's employee - I suspect Tesco will steamroll TJ's in So Cal. The comment that "TJ's makes money by accident" is more truth than poetry. You would have to see it happen to believe HOW it happens. TJ's is a very ego-driven company that espouses the concept of reinventing the wheel on a daily basis. A proven time and money wasting exercise. Good for Tesco and to TJ I would say: be scared.
We are Americans who live in Eastern Europe and we shop at Tesco every chance we get. Their private brand items are top-notch and the stores are large, clean and convenient. I sometimes say they are a combination of Wal-Mart and Target.... the best of each. The size and selection of the former and the style of the latter.
For one, I hope they make a dent in the States... we're their biggest fans.
TESCO can't get here soon enough for me, I have lived in the US and England so I know supermarkets in both counties. Some TESCO stores in the UK are huge and they are excellent, offering a larger and more diverse range of goods than any US supermarket I know. I hope they bring many of their own brands with them and come the Florida soon.
I used to shop in Tesco when I lived in the burbs of London and I missed it. I am glad that it's coming to Southern California, I cannot wait for them to have it here...my favourite part of the store is the sale area...hmmm I do miss spotty dick...
i am mr gay and i am wondering is Tescos dicriminating against gay people as they do not sell any gay food!!!! so why not???!!! you are a bunch of asswholes so sort it out or i'll come over there and kick your bottom aka bott bott yuors sincerely mr gay ( no relation to gays even though i am)
I am pretty sick of this new british invasion, its like a cancer, they are all over our TV and radio, and more and more brits are moving to LA. I propose a "new citizen Tax" Yes, lets tax those brits! and put that money toward offsetting the burden of having this new invasion on our roads, and our televisions!
Forget Tesco, send us a Waitrose! Will they carry good English products? Or just the same stuff I get at Ralphs?
I too have lived and shopped in both countries. The UK supermarkets are far superior to ours - the range and diversity of the products, but best of all the top-of-the-range FRESH ready meals. Tesco may be the biggest UK retailer but WAITROSE is the finest - wish we had either in the mid-west instead of scabby Dominicks and Jewell.
Fresh and Easy is coming into a Las Vegas (!) location to which many retirees can walk-Sun City Summerlin, and right next to the friendly veterinarian. We are looking forward to this new concept of a neighborhood market with fresh produce and a bit of European sensibility (now don't laugh at us dweeby Americans!).
Welcome, Tesco Fresh & Easy market!
:) we live in the greater phoenix area, and we LOVE fresh and easy.
it totally beats the corner wal-mart grocery store.
finally. a store where we can get GOOD tasting food. hell. even at a great price!! and they always have samples!
:D I bought the tastiest pita breads at .37 cents. and a 4 pack of uber good cinnamon rolls for $1.00. and it's waaaayyy better than dollar tree.
I wouldnt mind if they put the wal-mart grocery stores out of buisness.
yay tesco!
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