Tesco in the US falls short
Most of Tesco’s 59 Fresh & Easy convenience markets recently opened across Southern California, Arizona and Nevada are averaging about US$60,000 per week in sales. This falls well short of Tesco's target goal per store of US$200,000 a week in average sales.
The individual store formats are about 20% the size of traditional supermarkets, but three times larger than an average convenience store. Tesco is marketing the Fresh & Easy stores as an alternative to tradition markets, with an emphasis on what the retailer calls “healthy, fresh foods and prepared takeout meals at low prices.” Michael J. Dennis, a London-based senior research analyst covering the food industry commented that other than fresh fruits, vegetables and bakery items, "The rest of their sales have been a disaster.”
Tesco officials pointed out that many of the stores have only been open since November and that it is too early to speculate on overall performance. The retailer has already invested heavily in the venture, constructing a US$13 million, 76,550 m2 distribution center on an 36 hectare parcel.
Internationally, the British retailer has expanded aggressively in recent years and opened its first Tesco-branded store in China in January. It also runs retail operations in Hungary, Poland, Japan and Thailand, among other countries. Tesco has said it plans to spend more than US$2 billion over the next five years to expand its chain in the United States, with a goal of 1,000 locations throughout the country by the end of 2008.
