British Retailer Tesco Closing Down American Fresh & Easy
Looks like Tesco is quitting the U.S. market after five years; the Wall Street Journal reports that the British retailer is planning to sell or close their 199 Fresh & Easy stores in the United States.
"It's likely, but not certain, that our presence in America will come to an end," a representative said.
The company invested $1.6 billion on the expansion of their grocery stores, which are smaller than a supermarket but bigger than a convenience store. The Fresh & Easy model involved more fresh produce, less packaged goods, and an automated checkout system.
Unfortunately, analysts found that British sensibilities that worked across the pond didn't translate in American markets; the automated system was too impersonal, the products weren't brand-conscious enough to American shoppers, and locations were too close to car-centric markets, where driving to a large grocery store would only take five more minutes.
A report from Morgan Stanley & Co. found that product ranges were too narrow at Fresh & Easy, and didn't include fresh bakery items. Other downfalls? The stores were too cold, flower departments weren't big enough, marketing focused too much on price, and Tesco belatedly rolled out a loyalty card. Basically, Americans really like brands, flowers, and being thrifty without feeling cheap.