Tesco Still Fighting Uphill Battle in U.S.
Tesco’s Fresh & Easy keeps pushing along in the
U.S. as the chain recently announced plans to open its first two stores in
"We could not be more thrilled with the strong performance of our first
11 stores in Northern California and we’re excited to get our doors open
in San Francisco," said Tim Mason, Fresh & Easy CEO, in a press release. "Judging
by the fantastic reception we’ve seen from customers throughout the Bay
Area, we are certain these stores will also be a hit."
optimism aside, there are many Tesco shareholders who doubt whether the
chain has found the right formula to make it on this side of the Atlantic.
Munger, vice-chairman of Berkshire Hathaway, told The Telegraph earlier
this month, "It’s difficult to be a new boy. …Tesco is God Almighty
in England. But you come into Southern California and you have Trader Joe’s
and Costco — that’s tough competition."
Tesco has said it expects to reach
profitability in the U.S. by 2013, although there are many doubters outside
the company if not in its c-suite. A RetailWire poll in
October of last year found only 35 percent thought Fresh & Easy
would reach its goal in that timeframe.
Fresh & Easy, as a Bloomberg Businessweek article and others have pointed out, has made adjustments. The company has
expanded the number of items it carries from from 3,500 to 5,000. It has added
more healthy items and frozen foods to cater to local tastes in Arizona, California
and Nevada where it currently has stores.
Simon Uwins, Fresh & Easy’s chief
marketing officer, told the magazine "We’re
very confident that we’ve got Fresh & Easy in a place that customers like
it. We’ve just got to get more customers into it."
The changes have brought
some improvement. Same-store sales in 2010 were up 9.4 percent.
- Berkshire Hathaway warns US may be too tough for Tesco – The Telegraph
- Fresh & Easy Announces San Francisco Opening Dates – Fresh & Easy
- Tesco’s Still California Dreamin’ – Bloomberg Businessweek
- Fresh & Easy Sees Profits in Near Future – RetailWire
Discussion Questions: Are the changes made by Fresh & Easy working? Where do you see realistic opportunities for the chain to gain share of the grocery market?