Fresh & Easy a Trend-Setter

ELLIOT ZWIEBACH

EL SEGUNDO, Calif. — For Tesco's Fresh & Easy Neighborhood Market, imitation, as the saying goes, may be a form of flattery.

Since Fresh & Easy opened the first of its small-format stores in November 2007, several other food retailers have launched scaled-down food outlets of their own, including Wal-Mart Stores and Safeway.

“We see these stores as a recognition that our format has some merit,” Simon Uwins, Fresh & Easy's chief marketing officer, told SN. “We're not surprised that Wal-Mart and others are looking at similar types of formats.”

Fresh & Easy Neighborhood Markets measure about 10,000 square feet, with only 3,500 SKUs per unit.

Over the last few months, Wal-Mart has opened four Marketplace stores in the Phoenix area that are positioned similar to Fresh & Easy, and Safeway is experimenting with its own small-format store in Southern California, called The Market.

Asked about going head-to-head with Marketplace, Uwins said, “We're concentrating on our own stores and happy with the way our business is going in Phoenix.”

One industry analyst said he doesn't think Tesco — Fresh & Easy's parent company — regards Wal-Mart's Marketplace as a threat.

“They always understood other operators would respond to what they were doing, especially a company like Wal-Mart, which has the capital to do what it wants,” the analyst said. “But I think the Marketplace format is way down the list of priorities at Wal-Mart.”

David Bishop, managing partner in Balvor, Barrington, Ill., said the Fresh & Easy format fills a necessary niche.

“It's a format that allows shoppers to get everyday consumables in a space about one-fifth the size of a traditional grocery store, so they're in and out fairly quickly,” he said. “People today are making more quick trips to the supermarket — stopping in more often to buy only what they need for the short term — and Fresh & Easy is a format that accommodates that trend.”