The British Are Coming To Change Our Grocery Stores

April 19, 2007 — -- A European chain of grocery stores is trying to wrangle the American market with a concept it believes could change the way people here shop for their suppers.

Tesco, the United Kingdom's largest retailer, plans to open small stores called Fresh & Easy Neighborhood Markets that will sell fresh produce and meats. In particular, these convenient stores -- just don't call them "convenience stores" -- will offer ready-to-eat meals targeted at customers who don't want to wander the aisles of traditional supermarkets or spend too much time cooking.

"We looked at the U.S. for about 20 years and finally concluded that we've come up with something that can actually work," said Simon Uwins, Tesco's chief marketing officer.

With the company's experience in the United Kingdom, combined with intensive market research that includes shopping with and cooking with American consumers, analysts say the newcomer could succeed where others have failed.

UBS analyst Neil Currie said Tesco's approach could even reinvent the supermarket. At roughly 10,000 square feet, Tesco stores would be about the size of a 7-Eleven and far smaller than a traditional 45,000-square-foot grocery retailer.

"This has been tagged as a convenience-store concept," he said. "I think it's a convenient store. I don't think it's a traditional 7-Eleven with cigarettes and magazines. It's a fresh-food supermarket."

What exactly the stores will be has been kept secret. Tesco's Uwins said he wanted customers to be the first to find out.

The company announced in February that stores would open in California, Arizona and Nevada later this year. The company said it had secured 20 sites around Phoenix, one of the fastest-growing cities in the United States.

Uwins wouldn't disclose exactly how many stores it was considering in other markets until permits and real estate locations had been secured. So far, Uwins said the company had acquired 100 sites.

Worldwide, Tesco employs more than 370,000 employees and operates 2,800 stores in 13 countries, giving the company Wal-Mart-type clout. Its investment in the United States will reach $400 million per year for the next five years, the company said.