The Los Angeles Times has a stop-the-presses moment, reporting that Tesco's Fresh & Easy Neighborhood Markets chain, with stores in California, Arizona and Nevada, "represents an estimated $2-billion flop: a $1-billion investment on top of about $1 billion in cumulative annual losses."
The always accurate Burt Flickinger III, managing director at retail consulting firm Strategic Resource Group, puts it this way: "Tesco's failure will rank as one of the biggest among food retailers in modern supermarket history."
The reasons? To paraphrase Elizabeth Barrett Browning, let us count the ways...
Picketing by organized labor. An all-self-checkout system that eventually got challenged by a state law requiring a checkout person for alcohol purchases. A distribution center so large that it required fast expansion to justify its size. Stores that did not customize their merchandise by neighborhood. Products and flavors that often seemed more appropriate to Tesco's native England than to the western US. And finally, a store concept that rarely seemed fresh, wasn't all that easy, and seemed totally disconnected from the markets in which it was operating.
And all this after Tesco spent years researching the US, believing that it could offer something that would revolutionize the food shopping experience.
The always accurate Burt Flickinger III, managing director at retail consulting firm Strategic Resource Group, puts it this way: "Tesco's failure will rank as one of the biggest among food retailers in modern supermarket history."
The reasons? To paraphrase Elizabeth Barrett Browning, let us count the ways...
Picketing by organized labor. An all-self-checkout system that eventually got challenged by a state law requiring a checkout person for alcohol purchases. A distribution center so large that it required fast expansion to justify its size. Stores that did not customize their merchandise by neighborhood. Products and flavors that often seemed more appropriate to Tesco's native England than to the western US. And finally, a store concept that rarely seemed fresh, wasn't all that easy, and seemed totally disconnected from the markets in which it was operating.
And all this after Tesco spent years researching the US, believing that it could offer something that would revolutionize the food shopping experience.
- KC's View:
-
Okay, maybe the "stop-the-presses" crack was a bit of editorializing on my part.
I'll be honest here. While I could never understand how Tesco, which was renowned for its ability to gauge markets and then create relevant shopping experiences, managed to screw up its US offering, I always thought that they'd figure it out and fix it, given its deep pockets and proven track record.
Maybe the folks at Tesco breathed too much of their own exhaust. Maybe they believed that they knew better than the shopper, which is never a smart starting point.
Burt Flickinger is right. It is one the biggest food retailing failures of modern times. But I'll take it a step farther. Fresh & Easy also represents one of the biggest retailing disappointments that I can remember.
