Tesco has just announced in this statement it will conduct a "strategic review" of its 199-store Fresh & Easy Neighborhood Market chain, which is one of three options we reported yesterday the United Kingdom-headquartered global retailer would announce this morning. It's 7 am in the United Kingdom.
As part of the review, Tesco also announced that Tim Mason, who's been the CEO of Fresh & Easy since its start over five years ago, is leaving the company.
Mason, who's been with Tesco for over 30-years and is married to the daughter of a former Tesco CEO and Chairman, was given the added title of deputy CEO of Tesco in March 2011, following the retirement of Sir Terry Leahy, the former Tesco CEO who hatched the idea for Fresh & Easy. Philip Clarke replaced Leahy as CEO.
Mason, who lives in Southern California and has made millions of dollars in salary and bonuses while CEO of Fresh & Easy, was also given the position and title of chief marketing officer for Tesco last March, which was the position he held at the global retailer before departing for America in 2006 to head up its now failed fresh food and grocery retailing venture as CEO.
Here's what Tesco and its CEO Philip Clarke said (italics) about the "strategic review" in a very brief press statement just released:
In October, we announced that new capital investment in Fresh & Easy was to be tightly constrained whilst the business focused on reducing costs and improving the profitability of its existing stores.
It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate timeframe in its current form.We have therefore appointed Greenhill to assist with the review of options. In recentmonths, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business. We will communicate progress on this process when we present our full year results for the current financial year in April 2013.We are also announcing that Tim Mason is to leave Tesco after 30 years' service with the company.“I have been clear since my appointment as CEO was announced that my role is to deliver long-term value for shareholders. Following a year in which my priority for Fresh & Easy was to improve its performance, I have now made a fully-informed assessment of its longer term potential.“Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities. I have therefore decided to conduct a strategic review of Fresh & Easy, with all options under consideration. “Tim Mason, who leaves Tesco today, has played an important part in our success over a 30 year career with the company, and he leaves with my thanks and good wishes.”
Tesco also just posted a piece in its 'Talking Shop' blog from Philip Clarke, which you can read here.
Clarke makes it very clear in both the corporate news release and in his blog post that Tesco will exit the U.S. with Fresh & Easy one way or the other - be it the sale of the chain as a whole (very unlikely to happen), selling it off in pieces, or closing the operation and moving on - as we've been reporting all year would be the case, and as we correctly reported in this piece yesterday: "The End For Tesco's Fresh & Easy is Here."
Like we reported on Tuesday, the end is hear for Tesco's Fresh & Easy, regardless of when it occurs or how the disposition comes down.
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39 comments:
I only hope they take care of there employees who have been with them so long.Also what can you expect from a uk company they are losers
As a Brit living in the US (at the moment), I really miss the choice, prices, and one-stop-shop experience that we have become used-to in Europe. Tesco and Carrefour were at the forefront of that in the mid-80s.
If FnE go, I am left with the poor choice and high prices of American supermarkets - the kind of market that existed in Europe in the 1970s. Whilst food in the US is incredibly cheap given that transport costs are much cheaper than most of the rest of the world, quality is awful and choice limited.
I want a one-stop shop experience - like going to a very large Tesco, a Carrefour Hyper or a El Campo Hyper. These exists ALL OVER THE WORLD - except in the US.
Tesco should have been much, much bolder, stated what was wrong with the US retail market and really gone for it in a big way.
Tesco is a world retailer - as with so many other aspects of life, yet again it is the US that is out-of-step and old-fashioned.
Terrible news.
But if I understand it, strategic review means stores remain along for more time right?
Finally the torture and dysfunction is OVER....
Like I've expressed before, Great concept , beyond reason poor execution from all fronts.
"We will communicate progress on this process when we present our full year results for the current financial year in April 2013." So does that mean that most stores are likely to stay open for the foreseeable future? Our local F&E is the only real grocery store within three miles, so we really hope it stays open!
I am confused. Mason is out. Online media says business as usual. You can't run a chain without a leader. Some sources say they're all closing. I have no idea what to think. -bubba
To say that there was poor execution on all fronts, which was commented earlier is incorrect. There was however processes in place that were more reactive as opposed to proactive. Having left the company 6 months ago I feel for the dedicated employee's who still call fresh and easy home. My experience working for the company was interesting to say the least and I'm not surprised by the news.
It is a great day this company is horrible to work for .
Bubba:
Mason is out. As our story says, Jeff Ashdown has basically been running F&E day-to-day. He was CEO of Tesco Asia. So, no lack of continuity. But, he has zero experience in America, just like Mason, just like all the F&E senior executives.
Tesco CEO Clarke - see story - said conducting a strategic review of F&E, which will likely lead to end of business in USA. Like we say, the end is here, regardless of how and when it comes in terms of time.
James Sinclair:
Yes, the stores aren't being closed today, or tomorrow.
FnE is a good concept. However, poor early merchandizing, sku quantity and mix dug its early grave. I must say the original management team was arrogant and failed to listen and learn from their experienced suppliers and customers. The economy did the rest.
I suppose now that Aldi will purchase a 100 or more stores. That would make sense as they are making a move in the Southland and sister sub Trade Joes has deep roots. I found it coincidental that Aldi was scounting distribution space in Ontario. How convenient. Can you say Fresh and Aldi.
Yes, Wendy, its business as usual for your F&E store. As a 5+ yr employee the news was and is hard to hear. I started out as a part time employee and moved my way up into management. The employees may be taking the news hard, but I know they surely would benefit from your support. Thank you and all of the customers that continue to support us at this difficult time.
What bothers me about the entire thing is the fact that there are at least 100 employees that bought their Core Values hook line and sinker. We treat people with respect, we have integrity. We were told about à loyalty raise for the employees who have worked for the company five years. Well heres the catch, if you had drive, goals and ambition and moved up, no raise. Its only for those who stayed as they were. How is that fair, but Mr. Mason received a hefty multi million dollar exit package. As stated by a former employee we've worked some long hours, hard shifts. Putting away 15 pallets that are 7 to 10 feet high with only two people. How is that fair. What will become of those that believed and left other companies? Its a sad day all around, except for Mr. Mason.
Employees at the Riverside DC have been told F&E will 'cease to function' within a year.
These guys came in real hot and cocky with their 'market research' (I was around when they were calling them selves International Resource and Research, the early concept group for F&E). The research was a waste of time, totally incorrect and the smug, arrogant attitudes of the Brit expats didn't help the cause. F&E was also horrible to work with, really treated vendors abominably, so this news comes as no surprise and as a little relief.
and as for 'Brit lining in the US' above...The food at F&E was crummy, admit it. Salsa that tasted like Marinara Sauce...come on. I'm sorry in your time here you never experienced TJ's, Whole Foods, Sprouts, and the many many independent and wonderful food stores in F&E's territories. Truly a shame you missed out.
Goodbye F&E!
Seen the F&E announcement and I we know the writing is on the wall about their future. As an employee who has invested A LOT more hours than the average person at any other normal job, I am somewhat sadden that it didn’t work out. Many employees worked harder than they ever had to anywhere else, under crazy ridiculous expectations from management with NOOOO appreciation at all but still gave 100% commitment, service and dedication into this business. Honestly yeah that sucks! But on the bright side, the possibly of it being sold to another retailer or outlet who knows what the heck they are doing for a change sounds pretty positive. I can only HOPE F&E does find a buyer and then finally OUT WITH THE OLD, Brit "decision makers" aka level 4 & 3's who are complete A-holes who think they know it all and would never listen to an American idea that actually would make them some money. And then OUT with all the incompetent managers that were promoted as “Puppets” who agreed to all of their dumb decisions without question just because their job was to simply say “YES”. SHAME on both of you. If you would have lowered your egos for just a minute (might be physically impossible but let’s pretend it could happen) and actually listened to those ideas on how to save money & make money then you wouldn’t be packing your bags right now! IT'S ABOUT DANG TIME!! Seeee ya Lodge, Ewart and Fletch, the super duper sloppy decision makers for manufacturing. FYI - Money trees and unicorns are NOT real, they do not exist apparently not even at TESCO. Okay so best part, IN WITH THE NEW... Seriously send them home ALREADY, please!!! It sure would be great to finally get a retailer/buyer who is a competent leader that understands the US market. Just maybe those who have gone over and beyond all of these years to try and make F&E successful will reap some benefits from hard work. Hey they might finally get an employer who actually values and appreciates their service. Unlike the rejects that came from Tesco...Soooo GO BACK HOME BYE BYE :) Chow!!! And don’t let the door hit ya in the a$$. See I bought into the dream and all its been is an effing nightmare...
Fresh and Easy management foolishly did what so many other companies have done in the past do and continue to do. They were losing money due to Tesco shareholder pressure and were forced to make economies like decreasing opening hours of poor performing stores, mothballing stores that were ready to open (and would probably perform well given the chance) and also ceased developing their existing stores. They stopped their radio advertising, they forced stores to make do with a poorly treated skeleton staff and now they wonder why they are still losing money?
The big elephant in the room, as you have pointed out so regularly, has always been the lack of manned checkouts, that is the main reason why more people don't shop there. Don't get me wrong, there are other issues, but I think all those are very secondary to the checkout issue.
Im not worried about today or tomorrow, but the decision means they've all got at least another 3 months in them right?
So sad, this (as predicted for me) has become my favorite grocery store and we shop exclusively here. Nothing else even comes close. So bummed / pissed.
Lodge, Ewart and Fletch are the most fare and decent individuals I have ever dealt with. I am a better person for knowing them. They demanded only the best and push others to give it their best. I am an American, and truly believe Europe is way ahead of the US in terms of offering good food and fresh ideas in the store. The US is so far behind. The model is fantastic. The problem is in order to be vertically integrated and process the food for the stores and cover the tremendous amont of over head and fixed costs, they had to be at 400 stores minimum more like 600 stores to be profitable. They needed to come out quickly and hit that #. This model can possibly take 36% of you're cost out of the food. Other retailers will swoop in and carry this model on. The business will explode. It's the right way to go. I hope the good people at F&E can stay on to realize the success.
I'd love to see you do a piece adding up all the millions of dollars Tim Mason received over the years on this venture. Apparently the rewards for failure are very high.
http://www.guardian.co.uk/business/2012/dec/05/tesco-tim-mason-resignation
In the last few days there have been huge amounts of editorial written about Fresh & Easy, and hundreds of comments have been written about the many articles. I’m glad that readers of this blog are grounded in reality over Fresh & Easy’s failings as the comments threads I’ve read elsewhere have been bizarre to say the least, particularly in the UK newspapers. One thing that escapes many commenters notice is that Fresh & Easy stores do not and have not ever resembled Tesco’s UK stores in the slightest, so stating that “they were trying to import British style stores to the US” is nonsense. And whoever keeps bringing up the sweeping statement that “Brits unlike Americans, like all their fruit and vegetables wrapped in plastic” has probably never been to either a British or American supermarket.
F&E Level 3 & 4 are the worst top management team I've seen in my career. Brits said that they came to America to show Americans how business is done..........really? You're not even leaving a good image behind, you'll be remembered for the humilliation, ridicule and stress you made many of your employees and vendors go through given by your TESCO power. Very sad that so many hard working, dedicated and loyal employees were directed by such an unprofessional team. Great job Brits, you really think that your stupid accent makes you smarter? It does actually take real Managers with real skills to make a business sucessful oh yeah, and a bit of humility to listen and learn, I forget that blue blood is not actually human, the way you treated many sure proved it. Thanks for making us believe you were competent and bringing nothing back to the business but your ridiculous expense bills.
I can't agree less with the comments. To the person that said that "Lodge, Ewart and Fletch are the most fare and decent individuals I have ever dealt with. I am a better person for knowing them" I am sure he or she is either involved or married to a Brit or one of the American puppets they have and I’m sure you’re still jumping around. A quick FYI, we know exactly who you are and to us, you are a joke just like them. They use you and kept you around by throwing bones at you to cover the fact that the % of their levels 3 & 4 staff did not give equal opportunity in this country. They did not give a chance to qualified Americans to get to their level and much less women. So what did they do, they looked for the dumb Americans that got excited to be around fake royal talent and you are one of the high jumpers. That’s the reason why you think Mark, Kate and Ian are that way. For the rest of the peasants Americans that still work at F &E and were never worth of their acceptance, (which was probably the 99.9%) they are not only arrogant, intolerant and selfish but UNFAIR! It’s amazing how they constantly demanded everyone in the company to please their most obtuse requests. They loved the fact that whenever anyone said Ian, or Kate or Mark is requesting it, it had to get done one way or another. They are some of the worst people I’ve met; including Kate Hancock, Neil King and all the other British people that still look at their employees like we’re worthless. They never had the decency to include anyone but the ones they chose. Professionally or personally, I did not learn anything from them but that power means everything for the Brits even if you are a complete idiot. They never followed their own motto, and honestly they’re just darn rude. I have to admit that we unfortunately did have some awful Americans to add to this atrocity as well such as Davar and Nahal. I’m not sure why they also thought that their crap didn’t stink but it’s pretty entertaining to watch them actually. They are so in denial that they are just like the rest of us. The staff in El Segundo, or let’s say the second mother land, thought that coming to Riverside was denigrating. Their HR Team is to say the least the most “in discretional” I’ve worked with. As long as you were involved with the right people in this company, you are fine. Just like if their idiocy wasn’t enough, every time there was a need for more Managers; they will bring them from the UK, of course, with the inflated high salaries that they all make plus expenses. So, we became the training center for so many non effective Managers that is not even funny. Some not only did not have any idea about Management in general, much less how to run a business in America but still, they had to come all the way to bring their own grain of destruction to the company. Did you become a better person when they made all of us serve their Board of Directors? Was your role to keep the door open and point the way as a robot or did you actually had the great pleasure to dry their hands or put their boots on? Come on, that’s what you call fare and decent individuals. I’m sure they’ll be even more dishonest now than ever, and for sure they’re not taking responsibility for destroying so many dreams, they are the Level 3 and 4 of Fresh & Easy, they’re the smartest and most efficient team there is because they are TESCO, they just needed more support from….. somewhere and someone to make it. Hahahaha is actually almost sub real that adults act this way but sadly there is and their actions ended up affecting so many families. We’re starving for true leadership, we need real Managers with real skills. We’re counting the minutes until they’re all gone, anything will be better than the British geniuses they sent.
"I am an American, and truly believe Europe is way ahead of the US in terms of offering good food and fresh ideas in the store. The US is so far behind. The model is fantastic"
Thank you - I am the Brit living here....
The US is behind in SO many ways, it would be rude of me to state them. If it was the UK that was unique in having decent, vertically integrated retailing alone, I would agree with the other commentators - but it isn't. Look around the world and the model is large Hyper-markets offering everything in one location. Home delivery is the norm and usually free - here trying to get even Safeways to deliver is impossible and costs a fortune. WholeFoods etc, don't even do that !
Look at the Tesco/Carrefour model in EVERY other developed country of the world - yet less than 4% of the population hang on a quaint 1950s-view of shopping coupled with endless hours driving from store-to-store using petrol, polluting the environment and clogging the roads up.
Now, Tesco should have come here strong - built the "Xtra" style stores and taken down the competition. Drive the suppliers hard as they have in Europe (and Carrefour have as well), but they were too timid. Be able to do one-stop shopping for everything from food to TVs, but with good quality if I'm prepared to pay for it (Organic, fair-trade, etc).
Here, I can spend hours just burning fuel going from FnE to Gap to Best Buy to...... and then 90% of the time, what I want is out of stock and I have to wait DAYS for it to be delivered because the post service here is disfunctional.
I've lived in France, Belgium, Germany, UK - all developed Western nations, and I am sorry to say, on so many levels, the US is stuck in the past.
I worked for f&e almost three years as a team lead. I agree with the statement about the checkouts, but other problems abound. We (store staff) spent many hours, weeks, and months re-setting departments, and almost the whole store on a regular basis. I had a patron with a half filled cart, leave the store and the cart when he got to the frozen foods and saw we were re-setting that department - again, never saw the couple visit the store after that.
We also had a training day with SM, DM and two managers from El Segundo. Store staff spent five hours learning how to set endcaps, first as a group, then working with each of the managers individually to learn the "concept". It was a total waste of time! When we worked with the managers on a one to one basis, every one of them had us set the end cap differently, not one of the four managers were even close to what the others demonstrated! On top of that, our store team was nearly written up because we failed to get fresh product on the floor that day! Talk about the chickens in the barnyard, and a couple of fox in with you!
Customers were upset with the continual re-sets of the stores. We had no absolutes in what the stores are or were to be, just a continual throw it against the wall to see if it would stick - never did.
Maybe a good concept of smaller grocery store, but a bad implimentation.
To the person that said... I can't agree less with the comments above. I wanta give you a HIGH FIVE seriously you are amongst many who feel the exact same way. I would like to add that now it is beyond sickening to see level 3-4’s Brit so called leaders of F&E that screwed us over royally making all of those uneducated, ridiculous, DUMB decisions, and take NOOOOO accountability for where we are at today. Now they walk around with fake smiles that look painful for them to pose with fake good mornings as they escort potential buyers around. That’s funny how they purposely walked pasted all of us for years and NEVER acknowledged anyone’s existence unless it was their “Puppets”, now pass by with a fake smile and a Hi, how are you… ARE YOU KIDDING ME, we all see how fake this is. So please stop and go pack a bag instead. That would be better than a fake good morning after all these years. And it is crazy that these are now the ones who are responsible to help sale off F&E. God help us then because they shouldn’t have any responsibility at all after what they have done to F&E. So if their incompetence wasn’t enough to prove this is a bad idea, but now they are looking for another job somewhere else in the UK so how interested are they at all in the future of F&E and finding a buyer? Really how is this a good idea to let them be the face for a potential buyer at all… Please can we get someone else to do this? Why hasn’t Phillip Clark figured them out yet? Lastly, it is really disheartening how everyone at F&E is worried about what their future is and how they will be able to support their families while these Brit so called leaders will likely have a job back home in Tescoland… If anything, they should be totally embarrassed for the mess they caused here in the US at F&E. Sadly, they never considered giving American employees a chance to help make it a profitable business because if it wasn’t their idea, it wasn’t an idea for them to even consider… They are walking around telling employees not to worry because nothing has changed from a week ago… HEEELLLLOOOOooooooo, seriously everything has changed. While you pack your bags to go back home, the rest of the 5,000 F&E workers who dedicated their heart and soul into this business while sacrificing their families for all these years are now wondering what the heck are they going to do and will they have a job next year. So please save the fake smiles and don’t worry speeches, give us a little more credit, we can see right through all of this BS. I just really hope they finally do the RIGHT thing and take care of the people left at F&E.
To the person who said Now, Tesco should have come here strong - built the "Xtra" style stores and take down the competition. Drive the suppliers hard as they have in Europe (and Carrefour have as well), but they were too timid. Be able to do one-stop shopping for everything from food to TVs, but with good quality if I'm prepared to pay for it (Organic, fair-trade, etc). I have to say, this couldn’t be more WRONG… Speaking from experience from the beginning of F&E clearly Tesco came to the US with strong intentions. They took KEY suppliers with them from the UK to build factories in the US to supply ONLY to F&E stores... Yes that meant manufacturing for 1 store to 10 stores to 500 stores. Tesco came to the US and built LOTS of stores in WRONG locations which several still are vacant today. Tesco did not come to the US timid. They came here with the goal of opening hundreds of stores over night and move across the country in 3-5 years. If they came and started with Xtra stores to compete with Super Wal-mart they would have failed miserably because they had no clue about the US market place or the US consumer. The bigger the store, the bigger the mess they would have made of it. Yes, they attempted to drive suppliers hard and they certainly wore out, WE ARE TESCO which meant nothing to suppliers when they only bought a few cases of anything. Suppliers in the US already have national retailers they supply to and F&E never had volume to drive them anywhere. Tesco had no clue what they were doing in the US and brought along Brit leaders that had NO CLUE what they were doing. It was a formula for failure and disaster. So in the end, this UK shopping experience did NOT work in the US because we are not UK shoppers.
My husband is a store mgr of f&e so obviously we are upset with the news as he will be put of a job in this horrible economic time....along with hundreds of others. But reading some of there comments on here frustrates me enough to take the time to reply to those whining about pouring blood sweat and tears into their jobs and getting little to no recognition....or saying having to unload "pallets 10 ft high by yourself isn't fair"....blah blah! It's called WORK! And your recognition is the paycheck u receive every week!! If u don't like where u work or how u are treated, LEAVE! Find another job...where u will no doubtedly feel the same way since u are a victim in your own mind! This is what is wrong with our society these days!! Fresh n easy opened 200 stores and employed thousands of people in the US with hopes of making their idea work....but crap happens! It didn't work out for them and they owe u and US...NOTHING more than a paycheck for the hours u put in!
To the poster that posted on : December 20, 2012 8:21 AM
Yes and no!
There are legitimate safety concerns that were ignored in favor of transportation costs. Also, it is every employer's responsibility to lead by example (Living Service), to respect, acknowledge and take seriously the input of their employees (without hubris, arrogance, retaliation). Responding to your employees as if they are children with limited experience, knowledge and wisdom has its consequences!
I worked long and hard as a TL, and helping KT with recipes (I'm a chef-retired). After a year and a half of frustration trying to get fne to publish employee recipes using fne products plus items ready to be waste (shrink), I figured out why they did not want to use items close to disposal date. Items that are put in shrink (waste) come off employee bonus, items used at KT were a part of advertising budget, not taken off bonus. Hmm, pay more bonus, or send it to waste? MGT took the track of reducing the bonus system. This was another reason why I was pushed to leave, I made it to the point of six months prior to my 62nd b-day and took early retirement.
To the one whos husband is a store manager or a or glorified person with keys how is that package he is being offered to stay till the end as I saw on twitter.
The idea to open F&E in areas other supermarkets refused to operate in was a bit arrogant.I lived in Vegas when they opened many stores.The ones in poor areas Fremont/Eastern were empty from Day1.The stores in middle class neighborhoods W.Desert Inn are popular and should be profitable.
I didn't like the decision to eliminate the tasting counters.I do think they have improved the products,even introducing Tesco brand goods.
The cool staff all became disillusioned and left.
So many people seem bitter and angry. I worked at Fresh and Easy for 2 years. It was a great experience. I left when we moved out of state. I made some amazing friends that are more like family than coworkers. We worked hard and it was a bit stressful at times, but what job out there is stress free? A lot of people focus on the negative aspects of the company. All I know is I was out of work for 16 months put in 100's of applications and not one person would give me a chance. Fresh and Easy gave me a chance and I will be forever greatful for everything I have gained for being part of that company!
@steve hall, the w. Dessert inn store is profitable however that building is a lease so a huge amount is being spent paying rent on it. That store is amazingly busy and in the top 5 in the company. I am sad that it will be closing because the employees are a family but the store morale has went up 10 fold since we found out we are closing and getting severance pay. I have no regrets for staying until the end, it's going to be a blast.
You only get a severance if they close their doors. If f&e gets bought out or partners w someone there is no severance pay. Your employment will be transferred so therefore ur haven't been severed from anything. This is another way of the company misleading the employees.
Im a f-e employee started as c/a went to being a t-l step down to c/a it's a joke management suck's they treat there c/a's like crap,c/a's do all the work while management get treated like king's and queen's they do no wrong when they come in all late but if a t/l or c/a did this they get written up then you have managers that don't do a damn thing but stand at recieving desk and act like there doing something important in the meantime you might have two people doing the load if your lucky.if fresh and easy get's brought hopefully they will clean house on there managers because some of them are asshole's and have no business being in that role .
I am a manager, and many managers are lazy that has been one major reason why this company is going going. The other problem has always been corp office, they refuse to listen to anyone. Yes they talk to us managers about a severance pay that is good, however that is only if we lose our job.
Having read all these comments I am very sad that there is so much anger and animosity towards the Brits. yes we agree that there are some that are arrogant, but not all. I have worked with a few Brits that are actually nice-yes I said it nice! They care just as much as us Americans do, and want fresh and easy to succeed. Are we not all one team.....
F and E employees - you have NEVER had more negotiating leverage IN YOUR LIFE. Demand 1 year retention bonuses or walk out on your job. If Tesco gets even the slightest hint that a ground swell is coming which could poison the well they will have NO CHOICE but to pay out. No one will take over at your store. Everyone knows F and E is ending who would take that job? Find some friends at your store. Get everyone to agree to a single day walk out. And watch what happens.
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