Tesco announces plans for 10 new Fresh & Easy stores in Las Vegas Valley
British grocer Tesco is defending its U.S. rollout of Fresh & Easy Neighborhood Market stores, unveiling in its Tuesday earnings report 10 new locations for local stores and evidence that they say shows the concept is performing better than expected.
The planned stores, all former Rite Aid drugstore locations, will be at Charleston Boulevard and Sloan Lane; Tropicana Avenue and Nellis Boulevard; Desert Inn Road and McLeod Drive; Lake Mead and Hollywood boulevards; Las Vegas Boulevard and Pecos Road; Eastern Avenue and Wigwam Parkway; Eastern Avenue and Fremont Street; Vegas Drive and Jones Boulevard; Vegas and Buffalo drives; and Las Vegas and Lake Mead boulevards.
They will join 11 Fresh & Easy stores already open across the Las Vegas Valley.
Tesco officials announced April 2 that they would take a three-month break from opening new Fresh & Easy stores so they could refine the concept, which features smaller stores that split merchandise 50-50 between national brands and Fresh & Easy house brands. Tesco representatives have emphasized the stores' easy maneuverability and have aimed for competitive prices on prepared meals, fresh fruits and vegetables and national-brand items.
Fresh & Easy has received mixed reviews since it launched in November.
A Review-Journal story earlier this month reported that analysts have estimated Fresh & Easy sales of $50,000 to $170,000 a week, below company targets of $200,000 weekly. Investment brokerage Piper Jaffray has pegged Fresh & Easy revenue in the brand's first six months at $30 million, about 70 percent below original projections.
Tesco officials denied Tuesday in their quarterly earnings update that the Fresh & Easy concept was in trouble.
They don't plan to supply detailed sales results for the chain until they release their September results. But they did reveal that Fresh & Easy's losses have totaled $123.4 million, slightly less than the $129.4 million they'd budgeted. They also said sales inside some of the 60 stores they've opened in California, Nevada and Arizona exceed $20 per square foot a week -- well above the roughly $7 per square foot U.S. supermarkets averaged in 2006, according to the Food Marketing Institute.
Tesco officials said Tuesday that they would open 150 more U.S. stores in 2008 after they renew the company's expansion program July 2.
They're forecasting about $200 million in Fresh & Easy losses in 2008.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.
