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Fresh & Easy Markets in SoCal: Unknown & Hard?

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We were all abuzz a few months back when the first wave of UK import grocery stores called Fresh & Easy opened across the Southland, offering promise to under-served neighborhoods of accessible and affordable healthy food and low-cost groceries in a pleasant and somewhat upscale atmosphere.

Now that the markets have had the chance to settle in, research analysts are scurrying to look at how they're doing, and the results are mixed. According to the Pasadena Star-News, "Piper Jaffray's Mike Dennis suggested that Fresh & Easy, the U.S. division of British food giant Tesco, is about $70 million behind sales expectations." Of course, Fresh & Easy begs to differ, saying that the public response to the stores have been encouraging, and that they're doing well, although their rep "didn't offer specific numbers."

With the cost of food on the rise, and the general economic downturn plaguing wallets and businesses alike, consumers are curbing their spending, and it's possible that groceries are being bought on an as-needed basis.

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So is that why folks aren't flocking to their nearest Fresh & Easy?

Maybe, but, the problem might be something happening before the consumer even heads to the store. Because the markets have somewhat of a "low profile" shoppers might not even know what they're all about, and tend to categorize them as comparable to Whole Foods, where the eats might be healthier but the prices are also higher. They don't do any advertising, and seem to be relying on word-of-mouth and press coverage to attract customers.

Their website tells us they have a simple consumer demand to meet: "People want fresh and healthy food choices. People want things to be easy."

But how easy is it when those people don't know that the stores are an option?

Fresh & Easy's mantra seems to be that of "neighborhood." They stress that healthy food should be available where you live, which is a plea more often than not ignored by developers in lower-income areas, like in South Central LA (where last fall it was easier to buy a gun than some fruit & veggies), who finally got their Fresh & Easy in early February. If the concept is localized, it's clear why advertising to a broader customer base would be contrary to their goals, however, not bringing in more shoppers might mean they aren't making bucks.

Back in December, just a few weeks after their stores began opening in California, CNN declared that the outlook wasn't good for the chain:

Despite all the hype, all the planning, and all the expertise of Tesco's management team, it's difficult, at least at this moment, to know if Tesco's California dream will become a reality. Even if the concept becomes a roaring success, as some bullish analysts believe, the journey -- like most in Los Angeles -- will be anything but easy.

Frankly, it seems Fresh & Easy is less "easy" than the name suggests, unless it's in your neck of the woods and you've taken the time to figure out what you can get there. Can they sustain their stores, and continue to open more, as planned? According to CNN, early projections and analysis indicate that by "February 2009, Tesco plans to have 200 stores open. And by 2011, Fresh & Easy could easily have $4 billion in sales from 500 stores."Easily? Hmm...Have you been to your neighborhood F&E?

Photo of shoppers at the Fresh & Easy in Glassell Park by Andy Sternberg/LAist