Tesco U.S. debut expected in November
LOS ANGELES —Tesco still is being cagey about where it will open its first U.S. store, but it appears set to make its stateside debut in early November in either Phoenix or Los Angeles.
Tesco has been releasing news of its plans for the United States in drips and drabs, but announced in late September that it will build small-format Fresh & Easy supermarkets in 48 cities in Southern California’s Inland Empire, the area in the Riverside and San Bernardino region. And it’s no big surprise, since its first U.S. distribution center is located in Riverside, Calif.
In announcing the openings, Tesco chief executive officer of U.S. operations Tim Mason said the first two stores would open this year in the cities of Upland and Hemet, with 17 due to open in 2008 and 29 in 2009. He said stores would serve “underserved” communities and that multiple locations are planned for such cities as Riverside and Morena Valley. The 10,000-square-foot stores will emphasize fresh and prepared foods with an emphasis on Hispanic fare.
In the short term, building nearly half of its first 100 stores in the Inland Empire makes sense because it will allow Tesco to ramp up its distribution center slowly as it serves a store base with most locations nearby. Long-range plans call for Tesco to open up to 300 stores in California, Nevada and Arizona over the next several years.
As for its first opening, Tesco still hasn’t made an announcement, but analyst George Whalin said he thinks it will debut in Phoenix instead of the higher-profile Los Angeles market. “It was supposed to be Los Angeles, but with all the issues they had with the unions and other problems out here, I’m hearing it’s going to be Phoenix in early November,” said Whalin, president of Retail Management Consultants in San Marcos, Calif.
Once the first store opens, though, they should expand at a rapid clip, said Whalin, who said he’s seen several stores that are well along in the construction process. “They have a lot of stores that are almost done, so I’d expect them to roll out fast.”
The impending arrival of Tesco has grocery chains in the region concerned, but most are waiting to have a first look at Fresh & Easy before responding. Safeway chief executive officer Steve Burd said he wants to see what the stores look like and how they’re merchandised before making a move.
“We’re just waiting to see them go to market first, and then we’ll respond to that,” said Burd, who added that Safeway has no plans to test a small-format store.