Wednesday, March 5, 2008

Tesco Opens Three New Stores in the Phoenix, Arizona Metro Area Today; Ten More on the Way

Tesco Fresh & Easy Neighborhood Market achieved a trifecta today in the Phoenix, Arizona Metropolitan area, when it opened three stores in the same day.

Additionally, Tesco plans to open an additional 10 stores in the Phoenix Metro region this year. This will bring to 37 the number of stores the grocer will have in the region.

The three stores that opened today in the Phoenix area are at: 32nd Street and Greenway Road in Phoenix, at Sossaman and Southern Roads in Mesa and at Higley and Ray Roads in Gilbert. Mesa and Gilbert are suburbs located right next door to the city of Phoenix.

The three new stores bring Fresh & Easy Neighborhood Market's total grocery store count to date in the Phoenix Metro area to 15.

The additional 10 small-format, convenience-oriented Fresh & Easy stores Tesco will open in the Phoenix Metro region demonstrate what we call the retailer's "critical mass" strategy, which is to follow the model of U.S. retailers like Starbucks, Walgreen's Drug and a few others, and open numerous stores in neighborhoods throughout various regions (the critical mass) so as to try to establish a presence as the defacto or default "neighborhood" retailer.

The locations of the 10 new stores Tesco will open in the Phoenix Metropolitan area are:

  • 43rd Avenue and Bell Road, Phoenix
  • 19th Avenue and Greenway Road, Phoenix
  • Seventh Street and Thunderbird Road, Phoenix
  • Gilbert Road and Chandler Blvd., Chandler
  • Gilbert and Guadalupe Road, Gilbert
  • Gilbert Road and Southern Avenue, Mesa
  • Higley and Queen Creek Roads, Queen Creek
  • Pima Road and Union Hills Drive Drive, Scottsdale
  • Scottsdale Road and Shea Blvd., Scottsdale
  • Baseline and Kyrene Roads, Tempe
Many of these 10 new store locations aren't far from existing Fresh & Easy grocery markets, demonstrating the grocer's use of the "critical mass" strategy. In fact, note the three new stores that opened today, and a number of the locations of the 10 new store locations to come soon.

Tesco plc. is the number-three retailer in the world in terms of gross annual sales, and the biggest retailer in the United Kingdom. The retailer's Fresh & Easy Neighborhood Market USA division opened its first stores in Southern California, Arizona and Metropolitan Las Vegas, Nevada in November, 2007. There currently are 59 Fresh & Easy grocery stores in these three states.

Fresh & Easy stores are small-format, convenience-oriented grocery markets which average 10,000 square feet -to- 13,000 square feet. The grocery stores sell a limited-assortment combination of Fresh & Easy store brand and national brand basic or everyday grocery products at discount prices, along with selections of fresh produce and meats, prepared foods, specialty, natural and organic grocery items, wines and craft beers (spirits in some stores), fresh flowers, and a limited assortment of non-foods items.

The small-format stores feature self-scanning checkout counters, where customers checkout their own groceries with the assistance of a store clerk if needed. The stores are utilitarian in design but have a semi-upscale interior. They are positioned to be everyday neighborhood markets with a slightly upscale twist in terms of design and product selection. We describe them as sort of a warehouse-style discount supermarket meets Trader Joe's.

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