Tuesday, November 6, 2007

Tesco Fresh & Easy Update: Arizona

Tesco To Delay Opening its Phoenix, Arizona Region Stores Until December

Tesco won't open any of the Fresh & Easy Neighborhood Markets it's building in the Phoenix, Arizona metropolitan area until December, reported the Arizona Republic newspaper in today's morning edition.
As we reported here on Friday, November 2, Tesco has already opened its first store in the Southern California city of Hemet, more than a week before its announced opening date of November 8.

The retailer also plans to open five more Fresh & Easy markets in Southern California on November 8. Those stores are located in Los Angeles, Anaheim, West Covina, Arcadia and Upland. Additionally, five stores are set to open in the Las Vegas, Nevada metropolitan region on November 14. Additional Fresh & Easy Neighborhood markets are scheduled to open in Southern California, including in San Diego, on November 28.

The Arizona Republic story says (and our sources told us) Tesco planned to open an undisclosed numer of stores in the Phoenix metropolitan region in November (our sources told us on either November 14 or November 28) but, according to a company spokesman, those stores will likely open sometime in December, 2007.

The Arizona Republic says the Tesco spokesman "would not give a date for any (Phoenix area store) openings, say how many stores will open or discuss much of anything else--including the reason for the delay. "Why are we so quiet?" the Tesco spokesman rhetorically asked the reporter. Because "we want our customers to see Fresh & Easy first and judge it for themselves," he said. (Sounds to us that perhaps another soft opening might be in the works like the one at the Hemet, California store?)

After reading the Arizona Republic story this morning, we talked to a number of our industry and real estate sources about the Tesco delay, and the decision to open the Phoenix-area Fresh & Easy markets in December, rather than in mid-to-late November. Below is what we learned and feel secure reporting:

>A number of the stores are slightly behind schedule in terms of renovation and construction, so they won't be ready in time for a November opening.
>Tesco is a bit behind on getting their 820,000 square-foot Riverside, California distribution center completely ready. As such they need a bit more time to complete some work there and thus don't want to open too many stores around the same time period. The Phoenix-area stores are the farthest away from the distribution center so they pose the strongest logistics challenges.
>Tesco wants to make sure the openings of the five Southern California Fresh & Easy markets on November 8, followed by the five stores in the Los Vegas metro region just a week later, goes well. Therefore, opening a number of Arizona stores, even if they would be ready, on the heels of these 11 (12 counting Hemet) might be biting off a bit more operationally than the retailer wants to in that time frame. Thus, waiting until December is prudent, the retailer's executives decided, according to our sources.

We're also told by more than one source that Tesco is committed to making sure the Phoenix metropolitan region stores open before the end of the year, and preferably before the Christmas holiday.

Tesco is making a major retail commitment in the region. It plans on opening about 27-30 Fresh & Easy Neighborhood Markets in the Phoenix area by the end of 2008.

1 comment:

Joseph V said...

As I live in Hemet...let me give you a look at what this store is all about.

It has an interesting set-up..very small shopping carts, self-checkout, some pre-cut fresh fruit (country of origin?), typical Wal-Mart goods but very little in what I would want in a UK-type store.

American quick cook foods (Kraft Mac & Cheese! Really!) that may be high drama for a Brit, but I find sadly disappointing. I can buy this stuff in wide aisles with bigger carts and more pleasant surroundings that here.

Smuckers, Rice-A-Roni and other staples of American junk food do NOT a health food store make..the only organic part is probably the glue on the boxes.