EL SEGUNDO, Calif. — Philip Clarke, the chief executive of United Kingdom-based Tesco, may be coming to the U.S. next week to talk with potential buyers for the company’s Fresh & Easy Neighborhood Market chain, according to published reports.
A Fresh & Easy spokesman declined comment on the reports.
Planet Retail, a London-based research firm, quoted British sources as saying Clarke was expected “to fly to the U.S. to confirm a deal to be unveiled at the company’s full-year results presentation on April 17.”
Clarke announced in December Tesco was launching a strategic review of the Fresh & Easy operation, with results of that review scheduled for the company’s annual meeting in mid-April.
While he said the review would consider “all options for the business, it’s likely the review will lead to Tesco exiting the U.S. market,” he added.
Possible buyers might include Trader Joe’s, Aldi or real estate companies, according to published reports last week. Representatives of Aldi — which reportedly has aspirations to move into California — and Trader Joe’s declined comment last week.
Wal-Mart Stores could also be a potential buyer for some locations, real estate sources told SN.
Judi Butterworth, senior vice president at Velocity Retail Group, Phoenix, said the four Marketside stores Wal-Mart closed three years ago in Phoenix are “still just sitting there, and they are in the same size range at the Fresh & Easys.
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“So it’s possible Wal-Mart could decide to come back in and blanket the market by taking some of the Fresh & Easys for one of its smaller formats.”
She noted that Wal-Mart plans to open a smaller-format store in May on the Arizona State University campus in Tempe — a 5,093-square-foot “Wal-Mart on Campus” similar to one the company opened at the University of Arkansas-Fayetteville campus in 2011.
Fresh & Easy stores are in the range of 12,000 to 15,000 square feet, with a handful of 7,000-square-foot stores in the mix.
Butterworth said most of the Phoenix stores are in B and C locations, “so they aren’t ‘cream of the crop’ sites. And while some are actually up and running, others have been closed while others have never opened.”
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She said she’s not aware that Tesco has done any marketing to find buyers for the stores, “but they’ve operated under the radar from day one and it’s been hard to get a handle on what they’re doing and thinking.”
A real estate executive in Southern California offered similar comments, saying he hasn’t heard much “on the street regarding plans by Fresh & Easy to dispose of its stores. They have been pretty tight-lipped about it.”
Fresh & Easy operates 200 stores in California, Arizona and Nevada, with sales estimated at about $1.2 billion. However, the chain has continued to lose money — $119 million through the first half of the current fiscal year.
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