When Tesco first announced it was bringing a new small store format to the U.S., there was a good number (including some inside of Tesco) who believed the company would reshape food retailing in the U.S.
Later, when Tesco's Fresh & Easy format got off to a less than smashing start, there were plenty around who saluted their own prescience in predicting the British retailer's all too certain failure.
The truth of the situation, as usual, probably lies somewhere between a retailing renaissance and ruination. According to a Financial Times report, Fresh & Easy has put the second stage of its expansion in northern California "on hold" while continuing to acquire space and open locations in southern California as well as the Las Vegas and Phoenix markets. The retailer has opened 125 stores in two years in the southern California, Vegas and Phoenix areas.
While the chain has not been pushing to open store sites in
northern California, it has continued to acquire space for 50 stores in Sacramento,
San Francisco and San Jose. Commercial real estate professionals say Fresh & Easy
has shifted from a strategy of leasing to looking to purchase space.
Discussion Questions: What do you make of Tesco's real estate strategy in the U.S.? Are you more or less confident about Fresh & Easy's chances for success than when they first entered the market?