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200 Fresh & Easy Stores For Sale: Tesco Takes $1.8B Loss on Failed US Grocery Chain
Tesco, the UK operators of the regional grocery chain Fresh & Easy has been taking a long, hard look at how the business is doing, and, perhaps as expected, has decided to sell all of their stores.
In a newly-issued report, Tesco reveals that as a result of their "strategic review" of F&E, they will be making "an exit from the United States."
The entire project is largely being considered a flop—Fresh & Easy "failed to make any money during its run," elaborates the L.A. Times, adding that in walking away from the endeavor, Tesco is going to have to write off $1.8 billion. The Times notes that the way F&E was set up and operated was a big turn off with customers at their 200 stores in California, Nevada, and Arizona:
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 tastes.
Though the chain did listen to consumers and over the years expanded their product base, offering more brand name products, many who had made a visit to a Fresh & Easy early on never bothered to go back to see the improvements.
The first Fresh & Easy stores opened in California in 2007, and though they've had surges of openings (and some closings) the El Segundo-based business has held on until now. In late January, they launched a campaign to bolster consumer confidence, claiming they were "going to keep on fighting the good food fight" when it came to not only their promise to bring fresh food to communities with limited access but also to simply staying in business.
British analyst Neil Saunders says it seems likely Tesco's US Fresh & Easy experiment will go down in history as "something of an unfortunate misadventure."
UPDATE: Fresh & Easy posted the following message on their website today:
As many of you have heard or read today, our parent company Tesco updated on the future of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business. We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy.
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