CHESHUNT, England — Tesco here, parent company of Fresh & Easy Neighborhood Market, said it expects to open approximately one new store per week during the second half of its fiscal year, with a focus on adding locations in established areas rather than expanding into new communities.
The company opened 10 new stores in the U.S. during the first half of the fiscal year that ended Aug. 29. It has opened four stores since then, with a fifth set to open next week for a total of 131 locations in Southern California, Phoenix and Las Vegas.
The company had originally hoped to have 150 stores opened by the end of its fiscal year last February — down from its original goal of 200.
“Nevertheless, we are pleased with the underlying performance of the business, particularly in our coastal California stores, which are achieving good sales densities [that are] approaching the range we're looking for,” the company said last week.
Fresh & Easy, based in El Segundo, Calif., has postponed its entry into Sacramento and other Northern California markets, which was slated for the first half of 2009, although it did publish a list of nearly 30 sites throughout Northern California earlier this year and is building a distribution center in Stockton to service those sites.
A chain spokesman told SN Fresh & Easy has begun hiring for a store in Lemoore, a suburb of Fresno, which will be its northernmost California store.
In releasing financial results for the half last week, Tesco said, “In recognition of the difficult economic climate, we've been focusing on building sales steadily, with a cautious approach to new-store openings and a reduced marketing expenditure compared to the first half of last year. Since we've taken this approach at the same time as [broadening the range of products], like-for-like sales growth has softened.”
The company did not specify those figures, however.
Fresh & Easy sales for the half rose 115.4% to $267.6 million (U.S.) for 126 stores, compared with an estimated $124.2 million a year ago for 76 stores.
The loss for the half was $135.4 million — compared with approximately $95.5 million a year ago — which the company said puts it on track to meet its expectation that the U.S. operation will lose approximately $259 million this year, about the same level as a year ago.