Friday, December 12, 2008

Fresh & Easy Looking For Gold in Gilbert: Second Store in the Arizona City Set to Open Jan. 7; A Third Fresh & Easy Market to Open In Fall, 2009

Phoenix, Arizona Metro Region Market Report

Gilbert, Arizona could become Tesco Fresh & Easy Neighborhood Market ground zero.

The grocery chain plans to open its second small-format, convenience-oriented Fresh & Easy grocery and fresh foods market in the Phoenix Metropolitan region suburb of Gilbert right after the new year, on January 7, Fresh & Easy Buzz has learned. That store, the second Fresh & Easy in the city, is at Greenfield and Warner roads in the city of about 210,000 residents.

Two Fresh & Easy markets is far from a charm for Gilbert though. Tesco plans to open a third store in the city in the fall of 2009. That Fresh & Easy market will be at Gantzel and Ocotillo roads in the city's Queen Creek neighborhood.

Wal-Mart has one of its small-format, convenience-oriented Marketside combination grocery and fresh foods markets in Gilbert as well. The Marketside store opened in October.

Both Tesco's Fresh & Easy and Wal-Mart's Marketside stores are positioned as neighborhood grocery and fresh foods markets. Fresh & Easy markets average 10,000 -to- 13,000 square feet. The Marketside stores are 15,000 -to- 20,000 square feet.

Both retailers small-format stores sell basic groceries, fresh foods like meats, produce, dairy/deli and frozen, as well as a selection of non-foods.

Both Fresh & Easy and Marketside put an emphasis on selling ready-to-eat and ready-to-eat fresh, prepared foods. The difference between the two operations is that Fresh & Easy's prepared foods are made at a central kitchen in Southern California then shipped to the Arizona stores. Wal-Mart's Marketside stores have kitchens right in-store where the fresh foods are prepared. The stores also have a small eating area inside, along with tables outside, where people can eat if they choose.

In the basic grocery segment, Wal-Mart's Marketside stores offer mostly national and regional manufacturer's brand food and grocery items. About 85% of the stores grocery product mix is manufacturer brands and about 15% store brands. Tesco's Fresh & Easy is the opposite -- about 60-65% of the grocery items are store brands and about 30-35% are manufacturer's brands.

Fresh & Easy stores feature mostly pre-packaged fresh produce. On the other hand Wal-Mart's Marketside offers mostly bulk fresh produce with some branded, pre-packaged like salad mixes and other value-added items.

Wal-Mart has no plans to open a second store in Gilbert, Arizona in the near future.

The retailer has Marketside stores so far in the nearby Phoenix Metro region cities of Mesa and Chandler, and in Tempe, in addition to the store in Gilbert.

A new Marketside store is set to open soon in Peoria, Arizona, which isn't far from Gilbert.

That store will likely be Wal-Mart's last in Arizona for the immediate term. The retailer plans to open 10 Marketside stores -- about five in Arizona and five elsewhere (at least two of those five thus far being in the San Diego region in Southern California, both set to open early next year) -- and then evaluate the format and the 10 stores performance before going forward with additional Marketside grocery and fresh foods markets.

But for Tesco's Fresh & Easy, Gilbert looks like gold, as it will soon have three of the small-format, convenience-oriented combination basic grocery and fresh foods stores in the city.

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