Fresh & Easy

Fresh & Easy was a small-format grocery retailer created by the British supermarket group Tesco for the United States market. The chain was designed around neighborhood stores that were considerably smaller than conventional American supermarkets, with a focus on fresh food, prepared meals, private-label products, convenience, and relatively simple store operations. Its initial territory covered Southern California, the Phoenix area of Arizona, and the Las Vegas area of Nevada. Tesco announced the American venture in February 2006 and established its United States headquarters in El Segundo, California. The first store opened in Hemet, California, as a soft opening on November 1, 2007, followed by grand openings in California and Arizona later that month. Nevada stores began opening in November 2007, and an expansion program continued after a temporary pause in the second quarter of 2008. By the end of 2012, the chain had more than 200 locations across its three-state territory. The format attempted to occupy a middle ground between a traditional supermarket, a convenience store, and a discount-oriented neighborhood market. Stores generally carried groceries, fresh produce, meat, bakery items, prepared foods, beverages, and household goods. Fresh & Easy also promoted environmental features, including LED lighting, hybrid diesel-electric transportation equipment, solar power at its Riverside distribution center, and a commitment to environmentally certified buildings. The business struggled to achieve profitability. Tesco reported a trading loss attributed to Fresh & Easy in 2009, while the chain faced weak sales, unemployment, housing foreclosures, and population changes in parts of its operating territory. Thirteen stores were temporarily mothballed in 2010, and Tesco's later strategic reviews indicated that profitability was being delayed. In April 2013, Tesco confirmed that it would withdraw from the United States after investing heavily in the unsuccessful venture. Tesco announced in September 2013 that ownership and operations of more than 150 stores would be transferred to Yucaipa Companies, the investment group associated with Ron Burkle. The transaction was completed in November 2013 and involved 167 stores, with additional locations closed. Yucaipa sought to revise the format and reposition the chain around affordability, organics, prepared food, and freshness. A reintroduction campaign began in 2014, and in 2015 the company tested an online ordering and store pickup service called Click & Collect. The turnaround did not succeed. Fresh & Easy announced in March 2015 that it would close 50 stores to redirect resources toward e-commerce. In October it announced an organized wind-down of the entire chain, citing insufficient cash and an inability to obtain financing. Stores liquidated their inventory and closed by November 13, 2015. Fresh & Easy filed for Chapter 11 bankruptcy protection in October 2013 and again on October 30, 2015; the later proceedings included liquidation of distribution and store equipment. The brand is now defunct.

Tesco conceived Fresh & Easy as its entry vehicle into the United States. The company announced the plan in February 2006, targeting a small-store model for the western states of Arizona, California, and Nevada. Tesco believed that compact neighborhood markets could serve consumers seeking quick shopping trips, fresh food, prepared meals, and competitive prices. The planned stores were around 15,000 square feet, substantially smaller than the typical American supermarket. Tesco opened its American headquarters in El Segundo in January 2007 and invested in a large Riverside-area distribution center. Fresh & Easy began trading in late 2007. A soft opening took place in Hemet, California, on November 1, followed by formal openings in Southern California and Arizona. The first Nevada stores opened in the Las Vegas Valley on November 11. Store openings continued through 2008 and the following years, although the company paused expansion between April and June 2008. The chain eventually spread through Southern California, Northern California, the Phoenix metropolitan area, and Las Vegas. It employed relatively small store teams and used a centralized operating model intended to control costs. The format encountered substantial difficulties. American shoppers did not adopt the concept at the scale Tesco had expected, and the retailer faced competition from established supermarkets, warehouse clubs, discount stores, convenience outlets, and local grocers. Weak economic conditions intensified the problem. High unemployment, foreclosures, and declining populations in certain trade areas led Tesco to mothball 13 stores in 2010. Although the network grew to more than 200 stores by December 2012, it continued to generate losses, and internal reviews pushed back the expected date of break-even. Tesco's American venture became a major strategic and financial setback. The company reported a £142 million Fresh & Easy trading loss in 2009, and later reporting described the accumulated cost of the United States expansion as approximately £1.2 billion before Tesco's exit decision. In April 2013 Tesco confirmed that it would withdraw from the market. Rather than simply closing every location, Tesco arranged a transfer to Yucaipa Companies, the investment group associated with Ron Burkle. The transaction was announced in September and completed on November 27, 2013. Yucaipa took control of 167 stores, while roughly 40 locations were closed. Tesco also provided financial support as part of the transaction and absorbed substantial costs connected with the transfer. Fresh & Easy entered Chapter 11 bankruptcy protection in October 2013. Under Yucaipa, the company attempted to reshape the proposition instead of immediately abandoning the chain. The stores were repositioned around affordable organic products, fresh and prepared foods, and reduced use of artificial colors and flavors. A reintroduction campaign launched in June 2014. The company also maintained a loyalty program, although customers had to re-enroll after ownership changed because California privacy rules prevented the direct transfer of member information. The turnaround remained under pressure. In March 2015 Fresh & Easy said that it would close 50 stores and use the resulting resources to develop Click & Collect, an online ordering and store-pickup service tested in the Las Vegas Valley. The initiative could not overcome the retailer's liquidity problems. In October 2015 the company announced an organized wind-down, explaining that it did not have enough cash and could not obtain further financing. Liquidation sales began on October 24, and all stores had closed by November 13. Fresh & Easy filed for Chapter 11 protection again on October 30, 2015. In December, its distribution-center equipment, vehicles, fixtures, and other hard assets were sold at public auction. The Fresh & Easy retail brand subsequently ceased operations.

• 2015

  Click & Collect strategy announced

  [1]Fresh & Easyen.wikipedia.org

  The retailer announces 50 store closures and plans to invest in online ordering and pickup.

• 2015

  All stores close

  [1]Fresh & Easyen.wikipedia.org

  Fresh & Easy begins liquidation in October and completes store closures by November 13.

• 2014

  Format reintroduction

  [1]Fresh & Easyen.wikipedia.org

  Yucaipa's Fresh & Easy launches a campaign emphasizing affordable organics, freshness, and prepared foods.

• 2013

  Tesco exits the American market

  [1]Fresh & Easyen.wikipedia.org

  Tesco confirms its withdrawal and transfers most Fresh & Easy operations to Yucaipa Companies.

• 2013

  First Chapter 11 filing

  [1]Fresh & Easyen.wikipedia.org

  Fresh & Easy files for Chapter 11 bankruptcy protection shortly after the ownership transition.

• 2010

  Underperforming locations are mothballed

  [1]Fresh & Easyen.wikipedia.org

  Thirteen stores are temporarily closed because of weak local economic conditions and poor sales.

• 2008

  Expansion resumes after a temporary pause

  [1]Fresh & Easyen.wikipedia.org

  After pausing new-store openings during the second quarter, Fresh & Easy resumes expansion with a Manhattan Beach opening in July.

• 2007

  First store opens

  [1]Fresh & Easyen.wikipedia.org

  Fresh & Easy opens its first store in Hemet, California, and begins its western United States rollout.

• 2006

  Tesco announces the Fresh & Easy concept

  [1]Fresh & Easyen.wikipedia.org

  Tesco announces plans for a small-format grocery chain serving Arizona, California, and Nevada.

A convenient, small-format neighborhood grocery chain emphasizing fresh food, prepared meals, affordability, and selected organic products.

• Grocery · 2007

  Fresh produce

  Fresh & Easy stores carried fruit, vegetables, salads, and other produce as a central part of the chain's neighborhood-grocery proposition. The format sought to make fresh shopping convenient in smaller stores than conventional American supermarkets.

• Ready-to-eat and takeout food · 2007

  Prepared foods

  Prepared meals and made-on-the-premises takeout were important elements of the brand's offer. Under Yucaipa, prepared food was highlighted as part of the effort to make the stores more relevant to time-pressed consumers.

• Grocery · 2014

  Organic grocery products

  The post-Tesco business promoted affordable organic products and used organics as one of the pillars of its 2014 repositioning campaign.

• E-commerce service · 2015

  Click & Collect

  Click & Collect was an online shopping and store-pickup service tested in the Las Vegas Valley. It was intended to support the chain's digital strategy while the company reduced its physical-store base.

• 2014Fresh & Easy reintroduction campaign

  United States · California · Arizona · Nevada

  Following Yucaipa's acquisition, Fresh & Easy reintroduced the chain with messaging centered on affordable organic products, freshness, prepared takeout, and avoiding artificial colors and flavors.

  Outcome. The repositioning did not restore the chain to sustainable operations, and the stores were liquidated in 2015.

  Source

• 2015

  Close 50 stores and invest in Click & CollectStrategy

  Background

  Yucaipa sought to redirect resources from underperforming physical stores toward an e-commerce service.

  Action taken

  Fresh & Easy announced that 50 stores would close and that Click & Collect would be tested in the Las Vegas Valley.

  Aftermath

  The initiative was overtaken by the company's liquidity crisis and complete wind-down later that year.

  Source

• 2015

  Wind down the entire chainOther

  Background

  Fresh & Easy stated that it lacked sufficient cash and could not obtain financing to continue operating.

  Action taken

  The company began liquidation sales and closed all stores by November 13, followed by liquidation of equipment and other hard assets.

  Aftermath

  The Fresh & Easy brand ceased retail operations and filed for Chapter 11 bankruptcy protection for a second time.

  Source

• 2013

  Transfer ownership to Yucaipa CompaniesM&A

  Background

  Tesco concluded that Fresh & Easy was unlikely to become profitable and decided to withdraw from the American market.

  Action taken

  Tesco transferred ownership and operations of most stores to Yucaipa Companies and provided financial support connected with the transition.

  Aftermath

  Yucaipa acquired 167 stores, closed additional locations, and attempted to redesign the retail proposition.

  Tesco cost associated with the transfer. £150 million (2013)

  Source

• 2010

  Mothball 13 storesStrategy

  Background

  Several locations experienced weak sales amid foreclosures, unemployment, and population decline.

  Action taken

  Fresh & Easy temporarily closed 13 stores in the Las Vegas, Phoenix, and Moreno Valley areas.

  Aftermath

  The chain continued operating and expanding, but profitability remained elusive.

  Source

• 2006

  Enter the United States with a small-format grocery modelStrategy

  Background

  Tesco sought to extend its international retail strategy into the United States through smaller neighborhood markets rather than full-size supermarkets.

  Action taken

  The company committed to opening Fresh & Easy stores in Arizona, California, and Nevada.

  Aftermath

  The chain expanded rapidly but failed to achieve the expected level of customer adoption or profitability.

  Source

1. 1Fresh & Easyen.wikipedia.org