Tesco invasion ends in retreat

09/11/2013 05:30:00 PM
Tom Karst

Speculation that the Yucaipa Group would revive the Wild Oats banner with the Fresh & Easy stories seems unlikely, Odron told me.

“I don’t see (Wild Oats) in those neighborhoods,” he said. “It doesn’t seem conducive to Wild Oats type operation” he said.

Of course, those neighborhoods in the Southwest U.S. wasn’t conducive to Fresh & Easy, either. Check out this way back when June 2007 editorial from The Packer about the British invasion:

 

Brace for the Tesco wave

Tesco's upcoming entry into the U.S. Southwest certainly has retail analysts' attention. Story, Page A1

The latest observation, a recent report by JPMorgan Securities Inc., predicts major changes in the retail scene, led by the British supermarket company and the growth of Target Corp. As in so many other trends of late, the losers will be traditional retailers, the report says.

Tesco's Fresh & Easy Neighborhood Markets, scheduled to open this year in the Las Vegas, Phoenix, San Diego and Los Angeles metro areas, promise to be heavy on several trendy grocery themes:

* providing high-quality fresh and prepared items;

* convenience;

* emphasis on local product;

* smaller stores;

* addressing environmental concerns; and

* avoiding of union labor.

Calling Tesco "possibly the best food retailer in the world," the JPMorgan report predicts up to 250 stores in the U.S. by late next year and annual sales of up to $4 billion by 2012.

The report also predicts strong growth from Target, but its market differentiation appears less obvious.

The Southwest is a saturated grocery market, so there will be winners and losers. Expect fresh produce to play a major role in the shakeout, but don't expect the upcoming battle for consumers to be easy.

 

Fast foward to 2013 and it turns out the biggest loser from Tesco’s invasion of the U.S. was Tesco itself.


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