Tuesday, June 24, 2008

Upcoming New Markets News: Tesco to Locate Yet Another Fresh & Easy Store in San Francisco Bay Area; 21 Thus Far By Fresh & Easy Buzz's Reporting

Tesco's Fresh & Easy Neighborhood Market USA has inked a deal for another new store location in Northern California's San Francisco Bay Area even before the small-format grocer's first store has opened in the region.

Fresh & Easy Buzz has learned from the California Department of Alcoholic Beverage Control that Tesco has applied for an off-sale beer and wine license for a new Fresh & Easy store at 5550 Coast Highway in the San Mateo County city of Pacifica, which is just 12 miles south of San Francisco (and five miles from San Francisco International Airport) on the coastal peninsula. [Read and learn more about Pacifica here.]

The application, filed by Fresh & Easy Neighborhood Market, Inc., which is Tesco's U.S. corporate entity for its Fresh & Easy combination basic grocery and fresh foods markets, is still pending approval by the California ABC.

But that's merely a procedural formality generally. Unlike obtaining licenses for the off-sale retailing of hard liquor in California, obtaining an off-sale beer and wine license in the state is normally a matter of applying and paying a fee for retailers, except in situations where a particular city or neighborhood objects to having another store which sells beer and wine. In those cases, an appeal process can delay a retailer from obtaining the license, as well as even having it denied in some instances.

The Fresh & Easy store at 5550 Coast Highway is part of a new shopping center currently being developed in Pacifica, according to the city mayor's office. A city spokesperson said the city and its Chamber of Commerce have been trying to lure additional food retailers to the coastal city for some time, and were pleased Tesco is locating one of its small-format Fresh & Easy grocery markets in the city.

The Pacifica store will be Tesco's first Fresh & Easy grocery market to be located in San Mateo County. Thus far, the retailer has confirmed 18 San Francisco Bay Area locations for its Fresh & Easy small-format, convenience-oriented grocery stores.

In addition, Fresh & Easy Buzz has discovered two other planned locations, both in the East Bay Area city of Vallejo, in addition to this latest store site in Pacifica.

That brings the total number of Fresh & Easy combination basic grocery and fresh foods markets to 21 to date for the San Francisco Bay Area.

Tesco plans to open its first Bay Area stores at the earliest at the end of this year. However, it's most likley the first stores in the region won't start opening until early 2009.

Here is a list of the 18 San Francisco Bay Fresh & Easy store locations confirmed thus far by Tesco:

>Antioch: Somersville & Buchanan roads; Lone Tree & Golf Course
>Concord: Clayton & Ygnacio Valley roads
>Danville: Diablo Road & Interstate 680
>Fairfield: Beck Avenue & West Texas Street
>Hayward: Mission Boulevard & Rousseau Street; A Street & Hesperian Boulevard
>Mountain View: Middlefield Road & Rengstorff Avenue
>Napa: Jefferson Street & Imola Avenue
>Oakland: 73rd & Bancroft avenues
>Oakley: Laurel Road & Ohara Avenue
>San Francisco: Third Street & Carroll Avenue; Silver Avenue & Goettingen Street
>San Jose: Bird & Minnesota avenues; Almaden Road & Curtner Avenue
>Sunnyvale: Tasman Drive & Fair Oaks Avenue
>Vallejo: Oakwood Avenue & Springs Road
>Walnut Creek: Ygnacio Valley Road & San Carlos Drive

Read here about the two additional Fresh & Easy grocery store locations, both in Vallejo, that Fresh & Easy Buzz has discovered, along with this new store location in Pacifica.

With 21 Fresh & Easy store locations locked-up in the San Francisco Bay Area--and more to come--before even the first store is opened, Tesco is demonstrating it plans to be a serious food and grocery retailing player in the nine county, seven million resident-strong region.

As we regularly write on Fresh & Easy Buzz, Tesco's retail store strategy with its Fresh & Easy grocery markets is all about "critical mass"--opening stores within about two miles of each other in the market regions it picks to enter, like it's doing currently in Southern California, the Metropolitan Las Vegas, Nevada region, and in the Phoenix, Arizona Metropolitan market.

The strategy is no different for the upcoming new San Francisco Bay Area Market. That strategy also includes opening a thus far confirmed 19 stores in the Sacramento region, which is connected by major roads to the Bay Area. It's about a two hour drive from San Francisco to Sacramento, for example. Further, the closest Bay Area county is only about a 40-minute drive from Sacramento.

Under this "critical mass" retail store strategy--think Starbucks for coffee retailing and Rite Aid and Walgreens in drug retailing for example--Tesco will be locating more stores in both the Bay Area and Sacramento regions of Northern California. In fact, Fresh & Easy Neighborhood Market representatives are currently out in the markets negotiating additional leases at present. You will read about those new store locations here first.

Note: For a Chronology of various reports, stories and analysis Fresh & Easy Buzz has written about Tesco Fresh & Easy's march from Southern California to Northern California, read this piece, "Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California."

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