News Column

Fresh & Easy Hits Hard Times

Dec. 6, 2012

Bethany Clough, The Fresno Bee

Fresh & Easy's parent company is considering selling its stores and pulling out of the U.S., leaving the fate of the eight stores in the central San Joaquin Valley up in the air.

The British parent company Tesco announced Wednesday that the small neighborhood market grocery stores it unveiled in the U.S. weren't making enough money for shareholders. Fresh & Easy's CEO is leaving and Tesco is starting a "strategic review." All options are on the table, from "full closure to sale to joint venture to staying open," said Fresh & Easy spokesman Brendan Wonnacott.

But at least one retail expert said the end is near for Fresh & Easy.

"I think eventually they'll pull out," said Philadelphia-based independent retail expert Scott Testa. "They'll probably find a buyer."

Fresh & Easy jumped into the Fresno market in 2010 and now has five stores in the Fresno/Clovis area, along with one each in Reedley, Lemoore and Delano.

The stores were part of the rollout of what is now 200 stores in California, Arizona and Nevada. Like many retailers, the company expanded during an economic downturn, getting good deals on property.

But the stores didn't make the kind of money its parent company wanted to see. Fresh & Easy entered an incredibly competitive environment, Testa said.

"This grocery business is a tough, tough business," he said. "Margins are small."

Signs of the retailer's struggle were evident in the Valley.

The company closed the Fresh & Easy at Cedar and Shields avenues in January, part of at least two rounds of store closures companywide.

Three other Fresno stores never opened.

One store in a shopping center at First Street near Bullard Avenue looked ready to open years ago -- complete with shelves and display cases -- but never did.

Fresh & Easy built a building at the southeast corner of Herndon and Milburn avenues that didn't open its doors.

Another store at Ashlan Avenue near Cornelia Avenue west of Highway 99 was listed as "coming soon" on the company's website, but also never opened.

For now, the existing stores will remain open. It's too early to tell what will happen to the Fresh & Easy properties long term.

Grocery companies are increasingly opening smaller stores. Fresh & Easy stores averaged about 10,000 square feet, about the same size as a Trader Joe's or a Walgreens.

Walmart is building a 40,000-square-foot neighborhood market, the retail giant's version of a small grocery store, at the southwest corner of Willow and Herndon avenues. Another Walmart neighborhood market is scheduled to open at Demaree Street and Goshen Avenue in Visalia.

National grocery chain Save-A-Lot has opened a 14,000-square-foot store in Coalinga, and chains like Dollar General and Quickeroo have opened smaller-than-average groceries in the Valley.

Source: (c)2012 The Fresno Bee (Fresno, Calif.) Distributed by MCT Information Services

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