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Tesco enters U.S. with ‘Fresh & Easy’ format

Britain’s biggest retailer Tesco Plc will initially target the greater Phoenix area for its new U.S. grocery stores, to be called “Fresh & Easy Neighborhood Market,” it said on Wednesday.
/ Source: Reuters

Britain’s biggest retailer Tesco Plc will initially target the greater Phoenix area for its new U.S. grocery stores, to be called “Fresh & Easy Neighborhood Market,” it said on Wednesday.

In its much anticipated U.S. foray due to start later this year, Tesco said it had secured 20 sites in and around Phoenix and was researching additional locations.

Other stores would open in Las Vegas, Los Angeles and San Diego and more than 2,500 jobs will be created once the openings begin, Tesco said.

“Our company has enjoyed strong success in countries throughout Europe and Asia and we are excited to bring that success to America,” Fresh & Easy Neighborhood Market Chief Executive Tim Mason said in a news release.

“We believe the greater Phoenix region is an excellent place to begin that journey.”

The U.S. venture of the world’s fifth largest retailer will go head-to-head with convenience stores such as 7-Eleven in the world’s most competitive consumer market, dominated by world leader Wal-Mart Stores Inc..

Tesco, with a third of Britain’s grocery market and operations in 12 countries, faces competition at home from Wal-Mart’s British grocer Asda. Data on Wednesday showed Asda had slightly closed the gap on Tesco in the 12 weeks to Jan. 28.

Tesco’s U.S. move also follows a land grab by the UK company in the fast-growing Chinese market, where it opened its first Tesco-branded store in Beijing last month.

Expecting fierce competition in the United States, Tesco has sought to keep its U.S. development under wraps from competitors for as long as possible, but on the basis of the little information made public so far some analysts believe it is on to a good thing with the market for its small-scale convenience grocers not yet fully exploited.

Tesco confirmed its stores would be just 10,000 square foot in size, making them much smaller than a traditional 45,000 square foot grocery store. It said the aim was to give customers “a faster, easier shopping experience.”

“The Fresh & Easy Neighborhood Market format is designed to draw customers back to their local neighborhoods by offering high quality, fresh and nutritious food at affordable prices,” Mason said.

Tesco chose the Phoenix area because of its high population growth and the strong potential of its expanding market. The city is among the fastest-growing in the United States.

It also unveiled the new logo for its U.S. venture with the words “fresh & easy” in white set against an apple green background.