TNS Retail Forward estimates that Tesco could be a $4 billion (£1.9bn) retailer in the US with 500 stores, with sales potentially reaching $10bn by 2015.

That figure would position Fresh & Easy, Tesco’s US banner, among the top 10 supermarket retailers stateside.

Fresh & Easy’s convenience-focused format potentially represents a significant threat to the US food retailing industry, says TNS, as the concept offers smaller stores, easy access, more ready meals and ‘grab-and-go’ items. Rapid expansion across the US will be a key sales driver for the retailer.

TNS Retail Forward believes Fresh & Easy’s small-size advantage gives it the opportunity to almost double space productivity per square foot compared with supermarket industry averages. The average size of a US supermarket is more than three times the size of Fresh & Easy’s 10,000 sqft stores. TNS Retail Forward predicts that Fresh & Easy could generate sales of $900 per square foot per store, nearly twice the supermarket average.

“The combination of Fresh & Easy’s smaller stores, self-service tills and ready-to-cook meals has direct appeal among US shoppers, whose primary concern is convenience,” said Jennifer Halterman, senior consultant at TNS Retail Forward. “There is demand for this type of concept, and we expect other US retailers to be watching Tesco closely for ideas on how to tap into this buoyant market. Fresh & Easy’s smaller store size gives it an ideal formula to replicate quickly throughout the US.”

Fresh & Easy stores also aim at a variety of shopper segments, attracting the value shopper through affordability, as well as the up-scale shopper through a gourmet offer.

“The idea of having 'ready-to-go meals' that are high quality, fresh, healthy and cost effective means that this type of meal option has the power to directly compete with restaurants,” said Mary Brett Whitfield, senior vice-president with TNS Retail Forward and director of the Retail Forward Intelligence System(tm). “Fresh & Easy’s arrival is part of an unfolding shake-up in the competitive food retailing landscape. We will need to wait and see what other retailers will do to respond to these changes in the market.”

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