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CORRECTED: Fresh & Easy Parent Company Takes $1.8B Hit; Will Sell U.S. Stores

About 200 grocery stores in California, Arizona and Nevada will be sold by Fresh & Easy's parent company, Tesco. That does not mean stores will close, a Fresh & Easy spokesman said Friday.

CORRECTED: Fresh & Easy Parent Company Takes $1.8B Hit; Will Sell U.S. Stores

CORRECTION 2:01 p.m. April 19:

Despite reports earlier this week that Fresh & Easy stores would be closing in light of an announcement by its parent company, Tesco, that the stores would be sold, a Fresh & Easy spokesman told Patch Friday there were not immediate plans to close any stores.

"Unfortunately there were some early press reports that we are closing and it’s caused some confusion," Fresh & Easy Spokesman Brendan Wonnacott wrote in an email. "Tesco confirmed they plan to leave the U.S. and sell Fresh & Easy, they also announced they have no plans to close any portion of the Fresh & Easy business.

"Though our parent company plans to leave the U.S., we’re pleased to confirm there are no plans to close any portion of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business.

"We’re confident that we can remain our customers’ favorite neighborhood market and we’ve just launched an exciting new marketing campaign [ www.freshandeasy.com/ads]. We look forward to serving our neighbors for many years to come."

Editor's Note: Patch apologizes for its initial incorrect reporting of this matter.

ORIGINAL POST:

The corporate dithering is finally over at Fresh & Easy. The British-owned markets, hit by a 96-percent drop in profits, will be sold.

Tesco will end it's 5-year adventure in the United States by writing off $1.8-billion.

There are about 5,000 employed at Fresh & Easy stores in California, Arizona and Nevada, including in Murrieta and Temecula.

A second Fresh & Easy location was slated to open in Murrieta. A company official previously said the store's opening was dependent on the economic climate. Fresh & Easy signs were since removed from the Nutmeg Street location to avoid confusion, the same spokesman said.

Patch reported back in December 2012 and February 2013 that Tesco was in a quandary about what to do with the chain of about 200 European-style convenience groceries in California, Arizona and Nevada that seemed to puzzle American shoppers. The hybrid operation featured prepackaged, often precooked meals in a smallish space, about one-fifth the size of American supermarkets, according to Mark Lacter of LA Biz Observed. All the checkouts were self-service, and assistance from employees was often hard to find. 

In addition, Tesco was saddled with a 800,000-square-foot distribution facility the company built in Riverside.

And there was that little matter of the San Diego attorney general who found their overcharging a bit troubling.

The stores began opening in November 2007 just before the recession; the sub-prime mortgage crisis forced most shoppers to pull in their belts. It was an era that saw the consolidation of supermarket locations, and even the closing of less profitable sites like Albertsons.

Yet, there was considerable competition from mass marketers like Walmart, Costco, Ralphs, Whole Foods and Trader Joe’s.

"While Tesco has done well with its range of compact Metro stores in the UK -- built close to public transport links so shoppers can grab a few items of food on their way home from work -- the idea did not translate well to the U.S. In the American west, most shoppers drive to supermarkets -- sometimes just once a week -- and will look for a broader range of products," Marc Levinson, author of "The Great A&P and the Struggle for Small Business in America" told the Associated Press. 

Analyst Neil Saunders of Conlumino in London told the Los Angeles Times that “the inevitably painful decision to cut and run was correct.”

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