• Bloomberg Business Week has a piece about Tesco’s continuing issues in the western US with its Fresh & Easy Neighborhood Market concept, writing that new CEO Philip Clarke is “modifying” its strategy there.
“On top of the estimated $2.4 billion the company has already sunk into the unit, Clark is opening more U.S. stores,” Bloomberg Business Week writes. “He's also launching Fresh & Easy's first TV ad campaign and testing in-store bakeries at some of the 175 outlets. Clarke has pledged to stop the losses by 2013 - three years later than the company initially hoped.”
The story notes that “Tesco didn't fully understand the preference for frozen food in the U.S. and is now adding more. It also doesn't accept manufacturers' coupons, a staple of U.S. retailing. For the last 18 months it's been adding coupons of its own for, say, $3 off a $30 bill, to its weekly flyer to attract shoppers. Some consumers were also confused by the predominance of the chain's own house brands rather than widely advertised national labels ... Tesco has expanded Fresh & Easy's offerings to 5,000 products, from 3,500, says Simon Uwins, the chain's chief marketing officer. He added low-sodium and low-fat Eatwell prepared meals to compete with Nestlé's Lean Cuisine dinners. Stores have been repainted to include brighter colors. ‘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,’ Uwins says.”
Bloomberg Business Week suggests that “there are signs of life: Same-store sales in the U.S. rose 9.4 percent in 2010, the fastest pace of any Tesco division. To keep it up, Uwins has to lure customers from rivals including Aldi Group's Trader Joe's, which also specializes in selling its own products, and larger supermarkets such as Wal-Mart Stores and Safeway, which offer a wider array of brands.”
“On top of the estimated $2.4 billion the company has already sunk into the unit, Clark is opening more U.S. stores,” Bloomberg Business Week writes. “He's also launching Fresh & Easy's first TV ad campaign and testing in-store bakeries at some of the 175 outlets. Clarke has pledged to stop the losses by 2013 - three years later than the company initially hoped.”
The story notes that “Tesco didn't fully understand the preference for frozen food in the U.S. and is now adding more. It also doesn't accept manufacturers' coupons, a staple of U.S. retailing. For the last 18 months it's been adding coupons of its own for, say, $3 off a $30 bill, to its weekly flyer to attract shoppers. Some consumers were also confused by the predominance of the chain's own house brands rather than widely advertised national labels ... Tesco has expanded Fresh & Easy's offerings to 5,000 products, from 3,500, says Simon Uwins, the chain's chief marketing officer. He added low-sodium and low-fat Eatwell prepared meals to compete with Nestlé's Lean Cuisine dinners. Stores have been repainted to include brighter colors. ‘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,’ Uwins says.”
Bloomberg Business Week suggests that “there are signs of life: Same-store sales in the U.S. rose 9.4 percent in 2010, the fastest pace of any Tesco division. To keep it up, Uwins has to lure customers from rivals including Aldi Group's Trader Joe's, which also specializes in selling its own products, and larger supermarkets such as Wal-Mart Stores and Safeway, which offer a wider array of brands.”
- KC's View:
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I have to admit to being a little conflicted on this one. On the one hand, I tend to believe that Tesco is in for the long haul, and that eventually the company will get it right. But, on the other hand, I would be neither shocked nor surprised if a story came over the wires two hours from now saying that Walmart or some other entity had decided by buy all the Fresh & Easy stores, and that Tesco was retreating from the US.
Flip a coin. I’ve got no idea which is more likely.
