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The Fresh & Easy grocery experiment may be over

More than a convenience store, almost a supermarket, Fresh & Easy hasn't found its place in shoppers' habits.

The British supermarket giant Tesco is giving up on the American market apparently Store executives say after five years and no profits, they'll likely sell or close their "Fresh & Easy" neighborhood markets.

Tesco built the smaller format stores in California, Arizona and Nevada in 2007, just as the recession was about to it. They offered fresh food and pre-packaged meals at discounted prices in urban neighborhoods. At the time Fresh & Easy was sold as a convenient alternative to big supermarkets and big-box stores like Walmart.

But Fresh & Easy's format never caught on. International marketing consultant Allyson Stewart-Allen blames everything from bad store lighting to self-service check-out for the store's failure.

And then there is the matter of fruit and veggies. "They pre-packed the produce," Stewart-Allen says. "And anyone that knows the American culture well will know that Americans want to choose their own grapefruit and apples rather than have those selections edited for them."

David Livingston, a retail analyst at DJL Research in Milwaukee, says the chain led people to believe it was going to have "Whole Foods products at Walmart pricing."

"They failed to deliver that," Livingston says. "All hat and no cattle."

When Tesco entered the American market in 2007 some analysts considered it Walmart's worst nightmare. Now, says Stewart-Allen, Walmart is a potential buyer of Tesco's 199 American stores.

About the author

Sarah Gardner is a reporter on the Marketplace sustainability desk covering sustainability news spots and features.
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The selected markets Tesco choose to enter were a major problem. Not only were they not densely-populated, but as the story notes, the real estate markets went bust when they entered. In fact, the company could have done pretty well by entering the countless numbers of urban "food deserts" but chose to compete head-to-head with big box stores in largely suburban and exurban markets without a clear value proposition. Add to that, higher-than-normal prices, and you have what happened to Fresh & Easy.

My family shops exclusively at Fresh & Easy and I can tell you exactly why I love them. Their store brand products are free of artificial colors and flavors. They offer a healthy brand that is lower in calories and sugar and still tastes good! They don't use HFCS in their store brand. They offer organic products (not to mention hormone-free) that don't cost three times as much as the regular option. They also offer brand name products that I like as well (which is something the only store I know of that compares, Trader Joe's, does not in my experience). I find everything I need in one store. They support our community and our schools. They even support our local breweries by stocking their beers. Their fruits and vegetable usually come from CA and AZ (which is as local as we can get here in Las Vegas). They offer me (as a parent) a reserved parking section close to the store. I haven't noticed if the lighting is poor and I don't mind the self checkout and having to bag my own groceries (sometimes the checkout employee even helps). If it's keeping their costs down, I'm happy to do it. Not only do they have great prices, they also have weekly coupons and a rewards card program that help my cash-strapped, one-income family to save money. I'm always shocked when I find out someone hasn't shopped there yet. I refuse to step foot into another big box grocery store because they are crowded and chaotic and I always leave stressed. They also inflate their prices so that they can put them on sale for what they should be in the first place (in my opinion). I'm a strict opponent of Walmart and I will be crushed if they purchase my favorite store because I will no longer be able to shop there. With the exception of dense, urban areas like NYC, our society is obsessed with buying in bulk. Fresh and Easy is built on the European model of only shopping for what you need for a few days and shopping more often. I wish that the reporter would have touched on that a little. My family of 3 still manages to buy everything we need for two weeks and most of the time for under $100. I think that, especially in this economy, people in NV, CA, and AZ would be doing themselves a favor if they shopped at Fresh and Easy. It has saved our family money, not to mention my sanity.

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