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Tesco pushes area expansion – British grocer to open three more stores in 2009

By   /   Monday, February 9th, 2009  /   Comments Off on Tesco pushes area expansion – British grocer to open three more stores in 2009

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Just over a year ago, British retail giant Tesco announced its $2 billion investment in the United States under the store name Fresh & Easy. Since then, the company has opened four neighborhood markets in Ventura County and has caught the attention of a few retail heavyweights hoping 2009 doesn’t bring another British invasion.

Tesco, the world’s third largest retailer, is taking charge of the West Coast retail grocery market, starting with Southern California and the Central Coast.

Fresh & Easy is “probably the most active expanding tenant in the market,” said David Rush, senior vice president of retail properties at Ventura-based CB Richard Ellis.

The chain opened its first Ventura County location in Simi Valley in early 2008, followed by stores in Newbury Park and Oak Park. Its Moorpark location opened Jan. 28, and three additional tri-county stores are scheduled to open later this year.

At this rate of expansion, Tesco’s competitors have every reason to be afraid.
The British giant currently has 34 percent market share in Britain, almost double that of Asda, a Wal-Mart subsidiary.

Tesco’s Dec. 2 quarterly report said group sales rose 11.7 percent for the 13 weeks ended Nov. 22, compared to the same period the previous year. This was due in large part to the company’s solid international operations, which reported revenue growth of 28 percent.

Despite Tesco’s success, the sluggish economy has forced Fresh & Easy to delay some of its store openings.
Fresh & Easy spokesman Brendan Wonnacott said the company had planned a slew of store openings for the second half of 2009 but instead decided to maintain last year’s store-opening pace of one to three stores a week.

“We’re still continuing construction on sites currently in progress,” he said. “But it’s too early to estimate a date for the new tri-county stores,” which will be in Oxnard, Lompoc and Orcutt.

Though the Fresh & Easy grocery stores – averaging 10,000 to 15,000 square feet – aren’t as big as normal supermarkets, Wonnacott said their size is a strategic move toward simplicity, something the chain feels customers want.

“Our stores are smaller than your typical grocery store, obviously, but we’ve had success with that. The store is designed to give customers a faster, easier shopping experience,” Wonnacott said, adding that “we’ve gotten to where we are by listening to customers and responding to their needs.”

Analysts have said Tesco’s utilization of customer feedback is a skill that sets the company apart from the U.S. retailers. In fact, Fresh & Easy executives made listening to their shoppers their top priority of 2009.

Simon Uwins, marketing director of Fresh & Easy’s U.S. operations, ranked it first among his New Year’s resolutions, which he posted on the Fresh & Easy blog.

“In talking to a lot of our customers, we hear about the various measures they’re taking to cut down on their spending and reduce waste in order to stretch their budgets,” Uwins wrote. “So our first resolution is to find new ways to help our customers to stretch their budgets, so they don’t have to compromise.”

Uwins said the Fresh & Easy team is so committed to keeping in sync with its customers that it created an account on the popular social networking Web site where shoppers can receive news updates and information on deals, new products and meal ideas.

Though Wonnacott did not immediately know how many tri-county residents Fresh & Easy employed, the stores typically have a staff of 20 to 30 workers.

Tesco employs 280,000 people in the United Kingdom and 440,000 worldwide. The company has operations in international markets including China, the Czech Republic, France, Hungary, Japan, Malaysia, Poland, Ireland, Slovakia, South Korea, Thailand and Turkey.

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