Fresh & Easy store openings slowing down - East Valley Tribune: News

Fresh & Easy store openings slowing down

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Posted: Tuesday, March 17, 2009 10:24 am | Updated: 2:57 am, Sat Oct 8, 2011.

Fresh & Easy is continuing its rollout of new locations but at a slower clip as the recession continues to grip the economy.

The retailer, a subsidiary of the United Kingdom's No. 1 grocery chain, Tesco, is opening its latest East Valley store on March 26 at Higley and Queen Creek roads in Gilbert. Last week, it opened a store in the West Valley.

Fresh & Easy has 14 stores across the East Valley, said Brendan Wonnacott, a spokesman.

"We had previously announced a goal of having about 200 (U.S.) stores open by the end of last month, and we have 116 as of now," he said. "It's a little bit slower than originally planned for."

No other opening dates have been announced for stores in the East Valley, but several are listed on the company's Web site as coming soon. They include Arizona Avenue and Chandler Heights Road, Gilbert Road and Chandler Boulevard, and McQueen Road and Chandler Boulevard in Chandler; Cooper and Warner roads in Gilbert; Gantzel and Ocotillo roads in Queen Creek; and 48th Street and Ray Road in Ahwatukee Foothills.

"We now announce our store openings about a month out," Wonnacott said. "We've announced them in the past longer than a month out and then we've had them open earlier, so we don't want that to happen."

Any store listed on the retailer's Web site is "likely to be opening," he said.

"Each store is quite different on the timeline just because anything from construction to permitting, to basically neighborhood issues, affects how long it takes for a store to come online," Wonnacott said.

Fresh & Easy is taking a "prudent" approach to expanding in the current recession, he said.

"The bottom line for us is that we're still in the process of opening stores, we're still hiring, we're still selecting these site locations, we're just not opening them as quickly as we originally planned," Wonnacott said.

Each store employs 20 to 30 people, and all employees are given the opportunity to work 20 or more hours a week so they're eligible for health benefits, he said.

Burt P. Flickinger III, managing director of Strategic Resources, an industry consulting firm, said Tesco is committed to its U.S. expansion for the long term and has the financial muscle to withstand any economic downturn.

"Many of the retailers in the United States are undercapitalized and are in shopping centers ... owned by real estate investment trusts that are undercapitalized," he said. "Tesco shouldn't have the exposure to those concerns that some of the other competitors do."

David J. Livingston, also an industry consultant, said Tesco hasn't done well in the United States regardless of the economy and has a lot of retooling to do in order to make Fresh & Easy attractive to consumers.

"Their sales tend to be quite low per unit, and they still haven't figured out the American consumer," he said. "They may expand, but if they do they're going to continue to have the same poor results."

American consumers expected lower prices, and a lot of consumers aren't used to self-checking, Livingston said.

"They're going to have to take a breather and try to figure out what's the best way to approach the American consumer," he said. "A company the size of Tesco certainly has the financing and the wherewithal to turn stores around if they put their mind to it and put their heart into it. I suspect they will, but I'm not going to bet on it."

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