Tuesday, May 27, 2008

Building 'Critical Mass' in a New Neighborhood: Tesco to Open First Fresh & Easy Store in Oxnard in Ventura County

Tesco plans to open its first Fresh & Easy Neighborhood Market grocery store in the Ventura County Southern California central coast city of Oxnard, Fresh & Easy Buzz has learned.

Fresh & Easy Neighborhood Market, Inc., as Tesco does business in the USA, has applied for an off-sale beer and wine license with the California Department of Alcohol Beverage Control for a new store it plans to open on Channel Island Blvd. and Rose Avenue in Oxnard.

Oxnard is located in the central coast region of Southern California in Ventura County. Oxnard is the county's largest city with a population of about 200,000, according to the most recent data from the California Department of Finance. The Oxnard Metropolitan region has a population of about 800,000 residents.

Besides being the first Fresh & Easy store in Ventura County and in Oxnard, the significance of the location in the bigger scheme of things is that the new store in Oxnard, which likely will open next year, is Tesco's second planned for the central coast region.

As we reported here on May 2, Tesco applied for an off-sale beer and wine license for its first store in the general region, in Lompoc, California, recently. Lompoc, which is about 79 miles from Oxnard, is in the neighboring county of Santa Barbara.

Although both Lompoc (Santa Barbara County) and Oxnard (Ventura County) are in Southern California where Tesco already has about half of its 61 small-format, convenience-oriented Fresh & Easy stores open and operating, the region is a distinct food and grocery sales market from Los Angeles and Orange County, where the nearest Fresh & Easy grocery markets currently are located.

Ventura and Santa Barbara counties also have some geographic and economic distinctions vis-a-vis Los Angeles and Orange County.

For example, agriculture is still a main source of income and employment in both counties; more so in Ventura than in Santa Barbara County though.

Ventura County remains today one of the state's top strawberry-producing regions, for example, despite increasing urbanization in the region. The area in and around Oxnard is regularly the state's number one or two top strawberry crop producer, according to the California Department of Agriculture. The city holds the California Strawberry Festival each year to celebrate its famous crop.

Even though the two neighboring counties (Ventura and Santa Barbara) have experienced rapid urbanization over the last couple decades, they obviously are far more rural, due in part because of their geography and topography, than Los Angeles and Orange County, which are essentially one continuous urbanized region. The Simi Valley gateway area where Fresh & Easy stores are located isn't too far away either. It's "all in the neighborhood" in Southern California geographical terms.

Fertile Ventura county also is a major bean producer (especially Lima beans), as well as a source of various other fresh market crops.

Oxnard also is home to Port Hueneme, one of California's busiest commercial ports. The city was founded in 1903.

As we write often in Fresh & Easy Buzz, Tesco's retail store location strategy with its combination basic grocery and fresh, prepared foods-oriented Fresh & Easy grocery stores, is what we term a "critical mass" strategy. In other words, the retailer's strategy is to open the small-format grocery markets close to each other (about 2 miles apart eventually) in its target market regions, thereby creating a "critical mass," hopefully allowing the grocer to eventually become the "natural choice" for shoppers as their "neighborhood grocery store of choice.

Although Lompoc and Oxnard are nearly 80 miles apart, both cities anchor different parts of the central coast region, which makes sense as Tesco will likely fill in "the middle" with additional Fresh & Easy stores in other key cities in both counties, along with adding more stores in both cities.

The map above depicts graphically what we mean by the progression or march from other parts of Southern California to the coastal cities of Lompoc and Oxnard, and surrounding region.

The Oxnard and Lompoc stores also are significant in that they demonstrate Tesco's progression or March throughout Southern California.

The first Fresh & Easy grocery markets were opened last year (beginning in late October/early November) in the Southern California desert region. Other stores were opened on the heels of those first stores in the San Diego region, Orange County, the San Fernando Valley and Los Angeles. Tesco continues to open new stores in those regions.

Therefore, opening stores in the cities of Lompoc and Oxnard(with more to come per the "critical mass" strategy) and in other cities in Santa Barbara and Ventura counties, follows the grocer's strategy of filling out the entire geographical and market region parts of Southern California. Tesco will then focus on opening more additional stores in the region like it's doing in all of its other Southern California markets.

Ventura County has a relatively young population, with 68% of the city's residents under 45, and 38% under 24 years old, according to the California Department of Finance. About half the county's population is minority, with Hispanics or Latino's being the majority of those ethnic minorities represented: Hispanics, African Americans and Asians.

The remaining 45% of the population is classified as white, according to the California Department of Finance, with 5% classified as "other."

Oxnard's city motto: "The city that cares."

That's a warm welcome for any new food and grocery retailer.

1 comment:

Anonymous said...

When will the Lompoc store open?