Sunday, October 24, 2010

Tesco's Fresh & Easy Neighborhood Market On Track to Close 13 Stores By November 2, 2010

Tesco plans to have the 13 Fresh & Easy Neighborhood Market stores it's slated for closure - six in metro Phoenix, Arizona; six in metro Las Vegas, Nevada; and one in Southern California's Inland Empire region - shuttered and fully-closed by Tuesday, November 2, 2010.

The locations of the 13 closing Fresh & Easy stores are:

Metro Phoenix, Arizona

858 S. Greenfield Road, Gilbert
3232 E. Guadalupe Road, Gilbert
1045 S. Gilbert Road, Mesa
2009 N. Stapley Drive, Mesa
9124 E. Apache Trail, Mesa
5802 W. Olive Ave., Glendale

Las Vegas, Nevada

Desert Inn Road and Pecos Road
Vegas Drive and Jones Boulevard
Lake Mead Boulevard and Hollywood Boulevard
Warm Springs Road and Eastern Avenue
Eastern Avenue and Fremont Street
Las Vegas Boulevard and Lake Mead Boulevard

Southern California

25050 Alessandro Blvd, Moreno Valley (Alessandro Blvd. at Perris Blvd.)

Tesco announced the closing of the 13 stores on October 5, as we reported in this story - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market.

Fresh & Easy Neighborhood Market by the numbers

Once the 13 stores are closed, Tesco will have 155 of its small-format (10,000-12,000 square-foot) Fresh & Easy fresh food and grocery markets operating in California, Nevada and Arizona, down from the current 168 units.

Below is a breakdown by market region of the 155 stores after the November 2 closures:

Southern California
= 92 units

Central Valley, California/Bakersfield Metro Region
= 7 units

Central Valley, California/Fresno Metro Region
= 7 units

Metro Las Vegas, Nevada
= 21 units

Metro Phoenix, Arizona
=28 units

Total = 155 units

We have a permanent link listing the 13 stores to close at the top of the blog.

Tesco's Fresh & Easy Neighborhood Market is boarding up the 13 stores and will continue to pay the monthly rent on the units unless it can either sub-lease the units, which it has been attempting to do, or work out some sort of reduced rent arrangement with the landlords, which is unlikely.

Tesco has said it could open some or all of the stores at some point in the future. It's called the closures "mothballing," in reference to that possibility.

However, based on our reporting, along with the fact Tesco would like to sub-lease the 13 units, we doubt if once closed any of the 13 stores will fly the Fresh & Easy banner and be reopened anytime in the future.

In terms of subleasing, the metro Phoenix and metro Nevada commercial real estate markets are so flooded with available retail commercial real estate space, particularly vacant buildings, we don't see Tesco having much success with that goal, outside of perhaps being able to sub-lease a handful of the units if it offers extremely appealing monthly rates. The Moreno Valley unit in Southern California could be easier, although the Inland Empire region also has plenty of vacant retail commercial real estate on the market.

Additionally, since Tesco couldn't make a go with the Fresh & Easy stores at the 13 locations, it's doubtful any other small-format grocer, outside of a local independent or two perhaps, or drug store chain (the buildings would be a good size drug stores) will be interested in the locations. Niche specialty type stores would seem to be the best available opportunity, considering the market and the smaller footprints of the store buildings.

Tesco currently isn't plan on opening any additional new Fresh & Easy stores this calendar year. No new units are set to open this month, and none are at present planned for November or December 2010.

The retailer opened nine Fresh & Easy Neighborhood Market stores in September of this year. See the linked stories below for details:

>September 22, 2010: California Dreamin': Fresh & Easy Neighborhood Market, Whole Foods Market Combined Open a Total of Four Stores Today in California

>September 21, 2010: Fresh & Easy Neighborhood Market and Walmart Create A September New Grocery Store Rain Storm in Oceanside, California

>September 15, 2010: Two New Fresh & Easy Neighborhood Market Stores Open in Fresno, California Region Today

>September 8, 2010: Fresh & Easy Neighborhood Market Hits (and Breaks) the 100-Store Mark in California With Today's Openings

>September 7, 2010: 'Big Bang' September: First Four of Nine New Fresh & Easy Neighborhood Market Stores Opening on September 8

>July 14, 2010: Fresh & Easy Neighborhood Market Confirms Our June 25 Report it Will Open Nine New Stores in September 2010

>June 25, 2010: A Four Month Pause: No New Fresh & Easy Neighborhood Market Stores Set to Open Until September 2010

As we previously reported, Tesco's Fresh & Easy currently plans to open 10 new stores in Southern California in early 2011. The current opening time-frame for the stores is January 1, 2011-February 23, 2011.

Additionally, the retailer plans to open its first batch of Fresh & Easy Neighborhood Market stores in Northern California beginning in early 2011, probably starting in February but it could be March depending on a couple of variables. [See - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011. Also see the related stories links at the piece.]

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