Jul 30, 2014

Fresh & Easy: Five Reasons Why It Failed Here

Analysts and readers both have a list of criticisms of the British retailer with 200 stores in the western United States

Fresh & Easy: Five Reasons Why It Failed Here

It appears Fresh & Easy stores will either close or start operating under a new name soon.

Tesco, the British company that owns Fresh & Easy, announced this week it is looking for a buyer for its American enterprise. If the company doesn't find one, it will close the 200 stores it has in California, Arizona and Nevada.

The numbers right now aren't pretty.

According to a fresheasybuzz blog, Fresh & Easy stores had shown a 12 percent growth in year-to-year "like to like" sales in April. However, in the third quarter, that growth has fallen to less than 2 percent.

Only 20 percent of Fresh & Easy stores are profitable and the ones making money are barely in the black. Thirty stores have reduced operating hours and 24 have closed since the first Fresh & Easy opened in the Southern California mountain town of Hemet in 2007. That original store is one of the 24 that shut down.

Tesco is the number one retailer in England. So, why did its American venture fail?

A report on msn.com lists a host of reasons. Among them are not offering coupons, a name that sounds like a sanitary product, its cold decor, selections such as herbed lamb cuts and a lack of American staples such as Oreos and Doritos at reasonable prices.

The article says the American supermarket industry is extremely competitive and Fresh & Easy simply didn't give people enough reason to switch stores.

Not everybody dislikes Fresh & Easy stores. On a Patch story this week on the pending closures, there were 42 comments. Of those, 14 specifically said they liked the stores while 10 said they didn't.

A sampling of some of the complaints.

Lindy wrote, "...the self check out makes for a negative shopping experience. I ALWAYS have to find someone to come and help me at the Fresh & (not so) Easy check-out for one reason or another. When I go to any other store that has both options I always choose the checker. It give people jobs and it keeps things sane."

Catherine Grans wrote, "We tried it, but it wasn't "Fresh." It also wasn't flavorful. It tasted like cardboard."

Randi Starr wrote, "$5.39 for a six pack of pepsi. i walked out today."

There were five complaints that seemed to be common in the stories, blogs and comments on why Fresh & Easy failed in the United States. Here they are.

1) The self-checkout without an option to go to a cashier's line was not popular. One reader noted this was particularly difficult if you have children with you.

2) Produce selection was limited and of low quality. This was particularly true with the shrink-wrapped produce. In fact, the pre-packaged meats weren't that popular either.

3) Limited selection in general. Americans are used to large selections at roomy Safeway and warehouse stores.

4) No coupons and not enough marked down prices like you find at Safeway and other stores.

5) The stores seem somewhat sterile and lack the warmth of Trader Joe's or other specialty grocery outlets.

One author summed it up by saying Tesco brought over a British formula that works fine in England but doesn't cut it in the colonies.

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