Tesco Fresh and Easy

I believe Tesco: “Fresh & Easy” Supermarkets will be successful. The Fresh & Easy name signals the two things it wants shoppers to think of it for: freshness and convenience (Horovitz, 2007). Tesco constantly re-enforces this message on the Fresh & Easy Homepage; people want fresh and healthy food choices; they want things to be easy, Tesco provided just that with its line of supermarkets. Tesco supermarkets found a niche that United States retailers had not focused on, convenient fast access to fresh, healthy cost affordable natural foods.

It is something many Americans have waited years for. As well as being marketed as a Fresh & Easy supermarket, it is also marketed as an energy efficient organization which in this age of energy and resource conservation adds to its appeal. The supermarkets utilize efficient equipment in their stores and operations (Recruiting, 2007). Stores are designed to use 30% less energy than typical grocery stores its size, and recycling is a priority. Fresh & Easy has been a savior tenant for many developers, eating up 14,000 square foot chunks of old space and dark drug stores (Retail, 2009).

Its entrance into the United States was the first time Tesco entered a country without a supercenter format. Tesco did not want to become like Wal-Mart. Tesco launched its United States Operations with a small format neighborhood grocery store under the Fresh & Easy name to differentiate its brand from its competitors. The supermarkets are relatively small, at about 10,000 square foot. Fresh & Easy stores target customers in low to middle income locations. Tesco is betting that there is a demand for smaller stores closer to home with fewer products, making it easier to find things.

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The stores are placed near public transportation. Many of them are near or inside underground and railway stations, making it easy for commuters to pop into a store and grab a meal on their way home. Their advertising campaign includes references to environmentally friendly packaging and food free of artificial colors, flavors, and trans fats. The chains buy no TV or newspaper ads. When it enters a market, it mails $5 coupons to area residents. The stores are stocked with big names and in-house brands and offer more prepared entrees and side dishes than typical supermarkets (Semeuls, 2007).

Their specialty is in prepared but not frozen foods, everything looks fresh. Everything is nicely repackaged in friendly pastel colors, simple graphics, and lowercase fonts. The stores are not over whelming. They look more modern and sophisticated than most supermarkets. The isles are wide and signs are clearly written. There is bright lighting and an uncluttered feel. Fruits and vegetables are neatly presented. There is an unexpectedly low price on items. Focusing primarily on California at this point, Fresh & Easy is approaching the market as a “critical mass” store strategy in California, Arizona and Nevada.

This strategy is to locate a “critical mass” of stores in a given region, similar to the Starbucks’ Walgreens’ strategy (Fresh, 2008). In doing this, consumer awareness is increased and marketing and advertising costs leveraged. From a positioning standpoint, it attempts to become the logical or defacto neighborhood grocer in the region, in part by virtue of having so many stores in the area (Fresh, 2008). The advancement of web based information technology has been an important catalyst for the recent proliferation of distribution sales channels in food retailing.

Although multiple channels enable companies to reach consumers faster and in different market segments, they pose challenges to include channel conflict and pricing policy for the different channels. This could benefit consumers by companies having to reduce prices to stay competitive. American supermarkets have concentrated mainly on trying to make cost out of their supply chains. Goods are moved hundreds of miles to keep them cheap. This has encouraged supermarkets to make two sorts of foods: long lasting i. e. ried, canned, frozen, or otherwise preserved and that which is prepared from raw ingredients on site. British food retailers because stores can be so small that they have to switch from selling sandwiches at lunchtime to selling readymade suppers in the afternoon specialize in regular frequent deliveries to city stores. Their supply chains are more sophisticated. Tesco is an innovator with its supply chain. Tesco built a distribution center. Coupled with partner Wild Rocket Foods, Tesco selected U. S. produce vendors as suppliers.

Tesco utilizes trucks with hybrid refrigeration vector units with internal partitions for frozen, chilled and ordinary goods. All Fresh & Easy trailers include automatic refrigeration shut-off when optimum temperature is reached inside the cooling chamber as well as a complete engine shut-off once parked at the stores. Electrical stand-by technology minimizes the impact on the environment by using no fuel to run refrigeration units on the trailers while parked at the distribution center. Tesco could replace three deliveries with one.

This makes it possible to sell groceries profitably in small stores at supermarket prices. Tesco makes fresh and easy available to the customers, but they also made the customers part of the solution to success. The Tesco scheme mails discount vouchers to customers encouraging them to return. It tracks every purchase to build one of the world’s largest databases. This finds correlations between purchases allowing Tesco to finely tune the product range in each store. I would venture to say that Tesco is on the right track to success with its wide mix of fresh food that is highly customer oriented and very accessible.

With the stores in local neighborhoods and at very user friendly cost, these neighborhood targeted stores will succeed. . References Freshandeasy. com (2008). Freshandeasy. com. Viewed at freshandeasy. com February 19, 2009. Fresh & Easy Buzz. (2008, March 8). Retrieved February 19, 2009, from http://www. freashneasybuzz. blogspot. com. Horovitz, Bruce (2007 November 08). British grocery chain hits America with fresh ideas. Retrieved February 19, 2009 from https://www. usatoday. com. Recruiting trail at Fresh & Easy. 2007, July 22). Retrieved February 19, 2009, from http://www. freshandeasy. com/blog/2007/07/recruiting-trail-at-fresh-easy. html Semuels, Alana. ( November 9, 2007). British food it’s not shoppers find fresh & easy a blend of trader joe’s and Ralphs. Retrieved February 17, 2009 from http://articles. latimes. com/2007/nov/09/business/fi-tesco9 RetailChatr; Fresh & Easy changing strategy. (2009, February 04). Retrieved February 17, 2009, from http://www. retailchatr. com/2009/02/04/fresh-easy-changing-strategy

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