The British-based grocery chain Tesco hasn’t opened a single store in the Valley of the Sun, but its officials are already stepping up plans to cover the area with their markets.
In February, the retailer announced its intentions to open 20 stores called Fresh & Easy Neighborhood Market throughout Phoenix, Las Vegas and California. Tesco officials recently added seven stores to the roster.
“These are the initial stores that we have in the pipeline,” said Simon Uwins, Fresh & Easy’s chief marketing officer. Uwins said officials foresee over 50 Fresh & Easy locations throughout the Valley over a period of years.
The company plans to carve out a market niche in the crowded Arizona supermarket industry by focusing on fresh, low-cost and healthy food sold in small neighborhood-centric stores that are similar in size to a Trader Joe’s, Uwins said.
Also key to the firm’s expected appeal to customers is a heavy emphasis on convenience. For example, the company plans to offer ready-to-go meals for families, which is an industrywide trend.
The company said it could employ about 700 workers within the company’s first year of operation and may eventually build a distribution center in the area that could employ thousands.
Tesco is the world’s third largest retailer.
Whether or not the neighborhood market format will be successful in the sprawling suburban meccas that dot the southwest should become apparent fairly soon after the first store opens, said Mindy McBain, a senior staff writer for the industry trade publication the Shelby Report.
“I would say probably within six month we’ll have a pretty good indication,” she said.
Even if Fresh & Easy isn’t a raging success, McBain said Tesco is not likely to give up on North America.
“They have plenty of deep pockets.”
McBain said the company’s biggest challenge is likely going to be distribution as they are used to working in smaller geographic area.
“With the vastness of America ... that’s going to be important to them,” she said.
Mike Proulx, president and chief operating officer for Bashas’, said whenever a new competitor enters the market, it puts other industry players on edge. On top of that, Fresh & Easy is trying something unique in their approach. “That will certainly attract the consumers’ attention for at least a while,” he said.