Tesco Sees 30 U.S. Stores by Year-End

Officials from Tesco's U.S. division said last week that the company expects to have 30 Fresh & Easy Neighborhood Markets open by Christmas and 20 more open before the end of its fiscal year in late February. Beyond those 50 stores, it has 100 more locations in the pipeline, Tim Mason, chief executive officer of Tesco's U.S. operations, told SN. Stores will begin opening in early

LOS ANGELES — Officials from Tesco's U.S. division said here last week that the company expects to have 30 Fresh & Easy Neighborhood Markets open by Christmas and 20 more open before the end of its fiscal year in late February.

Beyond those 50 stores, it has 100 more locations in the pipeline, Tim Mason, chief executive officer of Tesco's U.S. operations, told SN.

Stores will begin opening in early November — slightly later than the late-October time frame the company had previously indicated — although Mason declined to pinpoint the exact date of the openings, the number of stores scheduled to open or their specific locations.

With the announcement last week of 12 store sites in the Los Angeles area, the company has pinpointed 60 locations, including 27 in Phoenix, 14 in Las Vegas and seven in San Diego.

Mason said he hopes to announce sites in Orange County — between Los Angeles and San Diego — in the next few weeks. “Sites there are easier to find, but they're more expensive,” he noted.

Tesco has national aspirations for Fresh & Easy, he told SN.

“We hope consumers [in the four Southwest cities] will adapt early to the Fresh & Easy concept so that the rest of America will want to have these stores,” he said.

Asked whether Tesco would consider acquiring a U.S. chain, Mason replied, “You can never say never. But while the market is fluid in terms of property and we can get the sites we need [for Fresh & Easy stores], we're not in a position to buy another chain.

“Besides, we plan to make Fresh & Easy a good brand, and we don't want to dilute that by buying another brand.”

In other remarks during and after a media conference here:

  • Mason said starting salaries for entry-level employees in California will be $10 per hour, which he noted is $2.50 above the minimum wage.

    “Every employee from me on down will be eligible for a quarterly bonus of up to 10% of his salary, based on individual store performance as viewed by customers. It's not about profits but about customer service,” he said.

    Employees will be able to work a minimum of 20 hours a week, and those who have worked for 90 days will qualify for “affordable health care, including coverage for medical, prescriptions, dental and vision, with the company paying 75% of the cost,” Mason added.

    Tesco will also offer a 401(k) plan and will match employee contributions, he said.

    (Earlier last week the Financial Times of London said stores would operate with a three-person staff, including a manager, a team leader and a “customer assistant” whose main job will be to make sure customers “are delighted” — part of an attempt by Tesco to create a positive and distinct in-store experience for customers, the newspaper indicated. Customer assistants will also be the main conduit for customer feedback, the Times reported, and they will be encouraged to make recommendations.)

  • Tesco will adjust the product offerings at Fresh & Easy in response to customer buying patterns, Mason said.

“Half the merchandise in the stores will be perishables and half will be packaged, but that will have to change because we will only stock what customers want to buy, and that will vary in different areas.

“At this point we don't know how it will vary, so we're not making any judgments. Initially each store will stock ceviche, for example, and we will tweak the mix as needed.”

Because of the heavy Hispanic population here and in other Southwest markets, Fresh & Easy will have “a strong Latino element,” Mason pointed out.

After talking with Hispanic consumers and suppliers, the company added 250 Latino-oriented products to its range, he said, “and we think that will make a significant difference. Will we have to put more in certain locations? We won't know till we're actually trading.”