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Small Fresh & Easy stores to grow into big hypermarkets?
The move by Tesco into the US through its fast-growing Fresh & Easy format has focused much attention on the potential for smaller stores in the land of the hypermarket. It is much smaller than the typical US food store, which has created a great buzz in the market, and prompted the big US operators to look closely at their store portfolios.
The result is that both Safeway and Wal-Mart have created their own small-format outlets that incorporate some of the attributes of the Fresh & Easy concept although they all argue that their own creations are unique.
What has not been mentioned is the prospect that Tesco is using this small format as a way of building up some brand equity in the US, and learning about the market, before embarking on its real objective in the US of building up a chain of full-sized hypermarkets.
This is the belief of Aidan Bocci of consultants Commercial Advantage who reckons the Fresh & Easy move has all the hallmarks of the way a FMCG brand would enter a new market - small scale to start with and requiring relatively limited amounts of capital.
Such a view will likely be given short shrift by many people at the moment because of the tough time Tesco has been having in the US. But the grocer’s assertion that it is in this for the long term suggests that Bocci’s idea is not too far fetched and that it could become reality once Tesco feels it has nailed its small store format.
Topics: Tesco |
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