Why Fresh & Easy failed
The grocery chain is likely to close its doors. British giant Tesco just couldn't make a profit here and sent confusing messages to US shoppers.
British grocery giant Tesco (TSCDY) will probably close its Fresh & Easy Neighborhood Market stores and head back to Europe. Fresh & Easy's CEO is leaving as well, and the entire money-losing venture will be dismissed as a failure. Fresh & Easy opened in 2007 in the U.S., but lately has begun closing stores and finding other ways to cut costs. It still has about 200 stores in this country, mainly in Nevada, Arizona and California.
Why couldn't Fresh & Easy cut it? The Guardian lists several reasons, starting with its name, which sounds a bit like some kind of sanitary product. Another reason was because Fresh & Easy didn't embrace the couponing culture of America. In Britain, coupons are seen as "a sign of desperation," the Guardian reported.
OK fine, so why is Trader Joe's surviving without coupons? The Guardian says the Fresh & Easy stores were cold and off-putting, with nothing like the warm, fun feeling Trader Joe's evoked.
Some Fresh & Easy stores closed in my neighborhood, and it was easy to see why. People don't want produce sold in shrink-wrapped packages. They weren't big fans of the herbed lamb cuts at the store, and they wanted American staples like Oreos and Doritos at reasonable prices.
Fresh & Easy tried to make a run at the Trader Joe's customer, but Trader Joe's has some of the highest customer loyalty ratings in the business, and shoppers weren't going to make the switch without a good reason. Fresh & Easy just couldn't give them the right reasons.
The U.S. grocery market is super competitive, and without a solid strategy (and a better name) there was just no way Fresh & Easy was going to survive.
"It just became clear to us that the journey to sustainable returns was going to take too long," Tesco's chief executive, Phil Clarke, told reporters, according to Reuters. "It's likely but not certain that our presence in America will come to an end."
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I like their organic products from produce to dairy to pastas and pasta sauce. I don't go for their quick fresh meals or frozen processed meals but I like their choice of offerings. It's about half the distance to a Trader Joe's and that's what got me goihg there in the first place, plus I use their coupons religously. I'"ll be sad if they close down.
I don't know about the experts in this article, but I found Fresh & Easy to be the perfect grocery store. Leagues better than Ralph's, Albertsons, and yes, even Trader Joe's! Very affordable, lots of coupons offered, clean, FUN, well-designed, and great food (national and store-branded items). And other than a few British items, there was no obvious Tesco influence to supposedly turn off Americans. Shopping there was a pleasure, and my friends and I will truly miss it. I don't know where I'm going to get my groceries now.
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