Tesco’s US division, Fresh & Easy, is not hitting the right buttons with the American public, according to the perishable pundit.
The US ‘Perishable Pundit’ Jim Prevor claims that Tesco’s Fresh & Easy division is not doing as well as the supermarket would like the industry to believe, despite the division’s finance and strategy director, Andrew Higginson, describing consumer response to the concept as “very encouraging”.
When Tesco announced its Christmas sales in the UK, the company had a projected growth of around four per cent in same-store sales market, but only achieved a 3.1 per cent increase. And, at the same time, it was reported that Tesco had exceeded expectations on its non-UK business, as well as on sales of non-food items in the UK. But Prevor, of website perishablepundit.com, is not convinced.
The website has received more than 200 comments, from wholesalers, growers, brokers, other retailers and consumers, reporting their perceptions of the Tesco stores in the US.
The website has reported that a vast majority of the comments indicate that sales at Fresh & Easy are not strong.
Several suppliers have also told the website that orders are well below their expectations and at least some primary suppliers have thought the business not worth the trouble and stepped back into secondary supplier roles.
Despite this Fresh & Easy has plans to open stores in San Francisco and Oakland, and plans are proceeding to open a Northern California distribution centre in Stockton.
“You have to tip your hat to the courage of the Tesco executives who decided to launch without a trial,” said the website. “In America, we call that kind of gutsy move a ‘brilliant or bankrupt’ strategy. A lot of suppliers are counting on Tesco’s executives to be brilliant.”
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