Fresh & Easy: The curtain finally closes?

The latest Fresh & Easy news speaks to an orderly wind-down and liquidation of what was once Tesco’s grand ambition to conquer U.S. food retailing. It is hard to believe that nearly eight years have passed since November 2007 when the concept opened, easily the most anticipated event in food retailing in the past decade. My colleagues and I have probably authored over a dozen articles on Fresh & Easy during this period, chronicling the twists and turns and ultimately, the failure to make this a viable option in U.S. retailing.

From a peak of over 200 stores, the liquidation will impact 97 remaining units, as first Tesco and later new owner Yucaipa winnowed down stores in an effort to somehow find a magic formula that would lead to the brand’s resurrection. Back in March, I wrote a blog for Supermarket News on what I called Fresh & Easy 3.0, which was perhaps the last attempt to remake the format, this time into a smaller more convenience driven format that was debuting in the Las Vegas market. While promising, the existing store size and real estate base made this transformation difficult, not to mention the potential customer confusion over yet another shift in direction.

I suspect that in what is perhaps the final end, it was a case of too little, too late, with the costs of a transformation outweighing the current liability of running the chain. A few weeks back, I had occasion to revisit the Manhattan Beach store, which was always one of the chain’s best performers. It showed the promise of what a Fresh & Easy was designed to be, a convenience sized box with terrific prepared foods and meals offerings with compelling private brands. Unfortunately, there was not enough of these types of locations to go around and Tesco’s erratic real estate acquisition strategy practically assured that a single solution wouldn’t work across a chain.

As if we need any more reminders, competition in retailing today is fiercer than ever. Many of the same markets that Fresh & Easy was competing in also feature soon to be shuttered Haggen stores. I suspect that eventually, there will be real estate opportunities for others who are seeking to expand in this market. As Fresh & Easy fades into the sunset, it’s worth noting that the first California Aldi’s will be opening soon. The lifecycle of retailing never slows down.

How will Fresh & Easy’s exit affect the California retail market?