BOCA RATON, Fla. — Fresh & Easy Neighborhood Markets have not yet achieved the sales levels Tesco officials were originally hoping for, according to an industry consultant and editor here.
Speaking last week with investors in the United States and the United Kingdom in a conference call sponsored by New York-based Citigroup, Jim Prevor said the 52 Fresh & Easy stores are averaging weekly sales volumes of $50,000-$60,000, or about $5 a square foot — below the goal of $200,000 a week and $14-$22 in sales per square foot the company talked about in November.
A spokesman for Fresh & Easy declined comment on sales volumes when contacted by SN.
Prevor said the volume estimates are based on discussions with competitors, vendors, industry observers and Fresh & Easy store managers, “who all confirm each other.”
A pessimistic projection would put weekly sales at $60,000 next year, $69,000 a year later and $79,000 the year after that, Prevor said, while an optimistic projection would anticipate sales of $67,500 next year, $84,000 the year after and $105,000 — close to the U.S. weekly average — in the following year.
Factors holding down sales, Prevor said, include store policies that preclude accepting cash or American Express cards for payments; preclude taking manufacturer coupons; and emphasizing a private-label brand that has no equity with shoppers.
He also cited a lack of cultural understanding in product offerings, noting that two of eight fresh-cut salads are watercress-based — an ingredient more common in the U.K. than the U.S., he noted — and stores in Hispanic areas stock white prickly pears rather than the red prickly pears most Mexican Americans prefer.
Prevor also said Fresh & Easy postponed its entry into the Bay Area in Northern California from the second half of this year until 2009 because it does not have a local distribution facility.
The Fresh & Easy spokesman told SN the company intends to begin opening stores there next year.
Prevor has founded and edited perishables-industry trade magazines and served as an industry consultant.