While it may take U.S. shoppers awhile to embrace the Fresh & Easy model, by 2020 the company could have 5,000 U.S. stores with sales of $60 billion, projects Bryan Roberts, global research director at planetretail.net. That would be larger than Safeway.
Food retail guru Kevin Coupe, founder of MorningNewsBeat.com, minces no words: "There isn't a place in the world where Tesco has gone one-on-one with Wal-Mart and Tesco hasn't won."
While they may not yet be familiar, some of Fresh & Easy's distinguishing concepts are turning heads. Notably different — and cool: Shoppers are encouraged to taste before they buy. They may take almost any product to the "Kitchen Table" area of the store — be it chips, pizza or soup — and a staffer will open it or cook it and dole out samples.
"I come in here three times a week — sometimes to shop and sometimes to snitch something from the Kitchen Table," says Marcia Rea, a Hollywood resident.
Other Fresh & Easy features:
•Natural products. Fresh & Easy brand items have no added preservatives, artificial flavors, colors or trans fats. Eggs are from cage-free chickens; milk does not contain the growth hormone rbST.
•Low prices. An analysis by TNS Retail Forward found the total for a basket of eight Fresh & Easy products beat market chain Vons by 30%, Albertsons by 32% and Ralphs by 23%.
•Produce expiration dates. Fruits and veggies are mostly locally sourced — and come wrapped in plastic trays with expiration dates. The packaging, however, pleases some shoppers and seriously bugs others.
•Limited inventory. Fresh & Easy sells about 3,500 items vs. 60,000 at a typical supermarket.
•Low shelves. You can see from one end of the store to the other.
•No loyalty cards. No swiping cards for the price breaks.
•Wide aisles. Aisles are wide enough for three carts to pass.
•All self-checkout. To cut costs, there are no cashiers.
•Limited advertising. The chains buy no TV or newspaper ads. When it enters a market, it mails $5 coupons to area residents.
•Green design. Stores are designed to use 30% less energy than typical grocery stores its size, and recycling is a priority.
•Show the food. Most Fresh & Easy brand products are packaged so shoppers can see what's inside.
•Wine guru. The chain employs an accredited Master of Wine (one of 265 in the world).
For all of Fresh & Easy's planning, it's had some glitches in the early going, such as its distribution system failing to prevent some stocking shortages. The chain also has taken heat from Los Angeles activists, who say it has opened fewer urban stores than promised, and faced union anger over its non-union stance.
Studying how we live
While some problems are to be expected in such an ambitious rollout, some misjudgments about U.S. consumers are more surprising — given how much it studied them in their natural habitat.
Before the first U.S. store was built, Tesco hired a specialty research firm to help it peer into the lives of 60 American families in Southern California and Denver.
It spent hours in their homes. It took video of them cooking. It took video of them shopping in grocery stores. It even shot video inside their refrigerators and pantries.