Fresh & Easy to Shutter 12 Stores

EL SEGUNDO, Calif. — Fresh & Easy Neighborhood Market here said Monday it plans to close 12 underperforming stores temporarily as part of its effort to reach profitability by the close of the fiscal year that ends in February 2013.

"There's not enough growth in sales or customers at those stores to justify keeping them open," Brendan Wonnacot, a Fresh & Easy spokesman, told SN. "However, we have other Fresh & Easy locations near those stores to absorb their sales."

He also said Fresh & Easy intends to offer the approximately 200 employees at the 12 stores positions at other locations. The stores are expected to close during the next four weeks.

Despite the closures, Fresh & Easy plans to continue to open new stores, with three scheduled to open Wednesday and two more set to open next week, Wonnacot said.  Two of the stores opening this week will be in the San Francisco Bay Area, and the other will be the chain's second Fresh & Easy Express, in Hermosa Beach.

The chain is scheduled to open its third Express unit — in Burbank — next week, along with a conventional store in Santee, near San Diego.

Wonnacott said that by the end of March, Fresh & Easy expects to add a total of seven Express stores, including the two in the next two weeks, and its first five stores in the Sacramento area.

The stores set for closing include seven in Southern California (Anaheim, Bakersfield, Baldwin Park, Fountain Valley, Fresno, Hemet and Ontario); four in Phoenix, and one in Las Vegas.  All 12 opened between 2007, when Fresh & Easy began opening stores in the U.S., and early 2010.

For the six months that ended Aug. 27, Fresh & Easy had a net loss for 177 stores of $113 million (U.S.), compared with a loss of $151 million for 159 stores at the mid-point of the previous fiscal year — results Tesco said at the time put the U.S. operations on track to meet guidance of "sharply reduced losses" in fiscal 2012 "on our way to breaking even" by the fiscal year ending in February 2013. Sales for the half-year rose 19.8% to $470.5 million.