Despite reports, Fresh & Easy plans not slowing - East Valley Tribune: News

Despite reports, Fresh & Easy plans not slowing

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Posted: Monday, March 31, 2008 2:58 pm | Updated: 10:08 pm, Fri Oct 7, 2011.

A spokesman for Fresh & Easy supermarkets said plans for opening stores in Arizona and the rest of country have not changed since the original U.S. rollout was announced.

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Brendan Wonnacott, spokesman for the United Kingdom-based neighborhood market chain, said the company had always planned to stop opening stores for several months after the first flurry of markets debuted to determine how Fresh & Easy is faring with American shoppers.

“We always planned to take a break and step back and have a look at the stores we opened,” he said.

Some news reports over the weekend on Monday interpreted the lack of new stores on the agenda for a three-month period as a slowdown of the aggressive U.S. expansion, he said. That is an incorrect assumption, Wonnacott said.

Fresh & Easy, a division of U.K.-based Tesco, has so far opened 61 U.S. stores, including 19 in the Valley. Two more, both in the West Valley, are planned to debut before the end of July, he said.

Fresh & Easy has 37 sites picked for local stores and expects to build even more eventually, Wonnacott said.

“We’ve only announced plans for 37, but we’ve always had more in the pipeline,” he said. “We just don’t announce stores until we have sites, but we are always looking.”

Fresh & Easy’s director of real estate recently told local retail industry leaders that the Valley could support as many as 100 stores. Wonnacott said he couldn’t confirm that number, but he said nothing has changed that would affect the potential for expansion.

Local stores are doing well, he said.

“We’re very pleased with the reception we’ve received,” he said.

Analysts in London apparently are not so sure whether the chain is doing as well as predicted.

Bloomberg News reported that shares in Tesco slipped slightly on the news and the financial news organization tallied U.K. analysts’ opinions.

The U.S. stores may be generating average sales of $170,000 a week, Mike Dennis, an analyst at Piper Jaffray in London, said in a research report, Bloomberg reported. He estimated that Tesco was aiming for weekly revenue of $200,000 and said the shortfall might hurt long-term profitability goals.

Panmure Gordon & Co. analyst Philip Dorgan was more optimistic,

according to Bloomberg.

“Tesco will get flak today and it will affect the shares, but in the real world it does not matter a row of beans,” Dorgan wrote, according to Bloomberg.

“There is nothing in the share price for Fresh & Easy, and management action is actually increasing the chances of success,” Dorgan said in a note.

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