Executive Briefings

Fresh & Easy Grocery Chain Goes Stale; Parent Tesco to Pull Out of U.S. Market

Tesco PLC's ambitious U.S. experiment - 5-year-old grocery chain Fresh & Easy - has failed after costing its British parent billions of dollars, the company said.

Fresh & Easy Grocery Chain Goes Stale; Parent Tesco to Pull Out of U.S. Market

After a strategic review of the brand in the last year, the largest British grocer confirmed its "exit from the United States." Tesco will attempt to sell Fresh & Easy and its 200 stores in California, Arizona and Nevada. The chain launched to great fanfare in November 2007 - just before the recession and sub-prime mortgage crisis swept through the U.S., causing Americans to retreat to the security of familiar brands.

Even without the economic turmoil, the gamble would have been a dangerous one. The U.S. grocery category is saturated with longstanding, homegrown names such as Wal-Mart, Costco, Whole Foods and Trader Joe's.

Analysts said that Fresh & Easy's use of self-service check-out stands confused consumers used to heavy store helper presence. The chain's lack of vouchers and coupons alienated price-sensitive shoppers. And the push toward ready-made meals weren't compatible with local taste.

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After a strategic review of the brand in the last year, the largest British grocer confirmed its "exit from the United States." Tesco will attempt to sell Fresh & Easy and its 200 stores in California, Arizona and Nevada. The chain launched to great fanfare in November 2007 - just before the recession and sub-prime mortgage crisis swept through the U.S., causing Americans to retreat to the security of familiar brands.

Even without the economic turmoil, the gamble would have been a dangerous one. The U.S. grocery category is saturated with longstanding, homegrown names such as Wal-Mart, Costco, Whole Foods and Trader Joe's.

Analysts said that Fresh & Easy's use of self-service check-out stands confused consumers used to heavy store helper presence. The chain's lack of vouchers and coupons alienated price-sensitive shoppers. And the push toward ready-made meals weren't compatible with local taste.

Read Full Article

Fresh & Easy Grocery Chain Goes Stale; Parent Tesco to Pull Out of U.S. Market