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Wal-Mart's newest banner, Marketside, makes a four-store debut this weekend in the Phoenix area, and goes toe-to-toe with Tesco's Fresh & Easy format, which has been operating for a year now, and just this week reported sales averaging between $11 per square foot, all the way up to $25 per square foot in for the best-performing stores in the 90-unit chain.

Whether Tesco decided to start breaking out Fresh & Easy's performance from the parent company's results because of Wal-Mart's pending arrival is anyone's guess. The timing is interesting, and if nothing else, is perhaps a subconscious desire on the part of Tesco CEO Terry Leahy to take the offensive in the Phoenix market.

marketside.jpgThe pre-opening press release for Marketside goes to some lengths to differentiate itself, featuring "exceptional values and chef-inspired meals." Here's what they wrote in the release (and what they really meant):

— Multiple registers are all staffed with associates who aim to make every line an express lane.

(We're not like Fresh & Easy, which only offers only self-checkout. We give you a choice!)

— Well-trained "Meal Specialists" — people who have a passion for food -— help customers find the right meals or ingredients.

(Fresh & Easy is totally self-service and you're pretty much on your own.)

— Low shelves and simple signs ensure that customers can see where they want to go for the next item on their shopping list.

(The Tesco stores have 84-inch deep shelves that hold a lot of product and cut down on restocks, but they're ugly when something is sold out and there's a big gaping hole there.)

The key difference between the two retailers is the service level, and it'll be interesting to see how the locals react. Marketside officials boast that their stores have a full-service deli and a more extensive produce department, definitely closer to what American shoppers expect when they walk into a small neighborhood supermarket... Not that Wal-Mart has a lot of experience with small.

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