Reshuffling at the Top at Tesco: Retail Chief Adams Leaving Fresh & Easy For Turkey; China CEO Ashdown to Replace Him; Richie to Head China Operations

Jeff Adams, Fresh & Easy Neighborhood Market's top retail operations executive, is leaving the El Segundo, California-based grocery chain to become CEO of Tesco Kipa in Turkey, Fresh & Easy Buzz has learned.
He will be moving to Izmir, Turkey, where Tesco Kipa is based, later this month.

Adams is being replaced at Fresh & Easy by Tim Ashdown, a 31-year Tesco veteran.

Ashdown has held a variety of international positions at Tesco. Currently he's CEO of Tesco's operations in China. Before taking over in China, Ashdown was chief operating officer of Tesco-Homeplus in Korea. Prior to that was operations director at Tesco's global headquarters in the UK.

Paul Ritchie is replacing Tim Ashton as CEO of Tesco China.

Richie joined Tesco in 1980. He's been CEO of Tesco Kipa in Turkey for three years. Prior to that position he was head of development for the retailer's Tesco Express stores and business in the UK. Trevor Masters, Tesco's CEO for Asia, is also going to be spending more time in China, which is a key growth market for Tesco, Clarke said in the internal e-mail to company employees.

The changes involving Adams' move from Fresh & Easy to Tesco Kipa, along with those involving Ashdown and Richie were announced today by Tesco CEO Philip Clarke in an internal memo to company employees. Neither Tesco or its Fresh & Easy chain have publicly announced the leadership changes.

A Tesco source familiar with the reasons behind the move says it in part has to do with a desire by CEO Philip Clarke to bring in somebody new at Fresh & Easy who the believes has a strong operational focus and isn't afraid to "crack the whip" on store operations.

Shortly after he became CEO of Tesco in March 2011, Clarke, who ran Tesco's operations in Asia and Europe - Ashdown reported to Clarke at that time - announced that the United Kingdom-based retailer would break even with Fresh & Easy by February 2013. But when Tesco reported a $245 million loss for Fresh & Easy on April 18, Clarke announced it would instead push-back that date, saying it will now break-even with Fresh & Easy by early 2014.

The $245 million loss at Fresh & Easy Neighborhood Market for Tesco's 2011/12 fiscal year is only an $8 million improvement from the $253 million Tesco lost on Fresh & Easy two years ago. If Clarke's promise that Tesco will break even with Fresh & Easy by early 2014 were to come true, it would mean in just two years the retailer would be able to go from a $245 million loss this year to a zero loss by the end of February 2014.

United Kingdom-based Tesco transferred Jeff Adams, who at the time was the CEO of its Tesco-Lotus division in Thailand, to its then start up El Segundo, California-based Fresh & Easy chain in 2008 to co-direct (co-executive vice president of retail operations) retail operations with Brian Pough, who left Tesco and Fresh & Easy not long after Adams' arrival and currently is a senior retail executive with the Walgreens' drug chain, where he focuses on the food and grocery segment at its corporate hheadquarters in Illinois.

Following Pugh's departure, Adams was put in sole charge of Fresh & Easy's retail operations and given the title of executive vice president of retail operations.

Adams is the second senior executive to leave Tesco-owned Fresh & Easy Neighborhood Market in six months. In early November, Fresh & Easy Buzz broke the news that chief marketing officer Simon Uwins was out at the El Segundo-headquartered grocery chain. Following our scoop, which revealed the changes being made in the marketing department at Fresh & Easy, the grocery chain's spokesperson announced his departure.

Related Stories

September 22, 2008: Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market

May 29, 2008: Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 5

March 12, 200: Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team

November 10, 2011 Chief Marketing Officer Uwins Out in Top-Level Reshuffling at Tesco's Fresh & Easy Neighborhood Market

Key Personnel Breaking News: Co-Vice President of Retail Operations Brian Pugh No Longer Employed At Tesco Fresh & Easy Neighborhood Market

Brian Pugh, Tesco Fresh & Easy Neighborhood Market's co-vice president of retail operations has left the company, according to information obtained by Fresh & Easy Buzz.

Additionally, we've independently and directly verified Mr. Pugh no longer works for Fresh & Easy Neighborhood Market at its corporate headquarters in El Segundo or elsewhere for the grocery chain.

Brian Pugh left Fresh & Easy Neighborhood Market around the first week of this month, close to the the Labor Day holiday.

In addition, Brian Pugh's wife, who worked for Fresh & Easy Neighborhood Market and whom he met while both worked at the corporate headquarters office in El Segundo, also is no longer with the company, leaving at about the same time he Pugh did.

Mr. Pugh was one of the original Tesco Plc. executives who came to the U.S. to start up the Fresh & Easy Neighborhood Market small-format, convenience-oriented, combination basic grocery and fresh foods chain.

Others key senior corporate executives who in addition to Brian Pugh came from Tesco's United Kingdom or other international divisions to Southern California to start-up Fresh & Easy, and who remain in positions with the company, include CEO Tim Mason, director of marketing Simon Uwins, Tony Eggs, who's head of the retailer's store development program, and others.

As we reported in August, Charlotte Maxwell, who came from Tesco's UK operations to head Fresh & Easy Neighborhood Market's grocery merchandising department, recently returned to Tesco-UK to accept a director-level position there. Her title at Fresh & Easy corporate was director of grocery merchandising.

On March 12, 2008, we reported in this piece, "Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team ," that Tesco was reassigning Jeff Adams, the then CEO of Tesco-Lotus in Thailand, to Fresh & Easy Neighborhood Market to share the vice president of retail operations position and duties with Brian Pugh.

Nearly three months later, as we reported in this May 29, 2008 story, Tesco Fresh & Easy Neighborhood Market confirmed in a press release our March 12 report that Jeff Adams had joined Fresh & Easy at the El Segundo corporate office and that he would be sharing duties with Brian Pugh; both men holding the title of co-vice president of retail operations.

In the May 29 piece we discussed how unusual of an arrangement having co-vice presidents of retail operations is for a grocery chain, commenting in the story that time will tell how such an arrangement works out.

Less than four months later, Mr. Pugh has left Fresh & Easy Neighborhood Market. Jeff Adams now is the vice president of retail operations for the chain, holding that title alone.

We haven't learned the specific reason Brian Pugh left Tesco Fresh & Easy Neighborhood Market, at least not to the verification standards we employ in reporting on Fresh & Easy Buzz. Further, we aren't suggesting Mr. Pugh's departure had anything to do with the relationship between him and Jeff Adams or the fact they shared the position.

However, we have learned two things. First, according to sources in the UK in a position to know, it appears Mr. Pugh no longer works for Tesco Plc. Additionally, we've learned Brian Pugh's departure from Fresh & Easy corporate was rather abrupt -- that he hadn't discussed with any co-workers having any plans to leave the company, nor that he was leaving to accept another job opportunity in the industry or elsewhere.

Mr. Pugh's voice mail at Fresh & Easy's El Segundo office still works. However, it doesn't have his recorded voice on the system. Additionally, his company mobile phone no longer works. An employee verified he no longer works for the company.

Brian Pugh is the latest in a long line of Tesco Fresh & Easy Neighborhood Market headquarter employees to leave the grocery chain this year.

As we reported in this August 17, 2008 story, "Special Report: Tesco Fresh & Easy Neighborhood Market Experiencing A Category Manager and Buyer 'Brain Drain'," five category managers and buyers have left the company in just a four -to- five month period -- from February -to- June, 2008 -- this year.

Additionally, about 11 category managers and buyers overall have left Fresh & Easy since it set up shop at the corporate office in El Segundo, California about two year's ago.

Further, as we mentioned above, and reported in this piece on August 17, 2008, " Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department," Charlotte Maxwell, who was the director of grocery merchandising since Fresh & Easy launched in the U.S., recently left, returning to the UK to accept a director level position with Tesco there. Ms. Maxwell is a British citizen. [Click here for an addition story on Charlotte Maxwell's departure from Fresh & Easy.

Brian Pugh has a prior working history with both Jeff Adams, who up until this month he shared the vice president of retail operations title and position with, as well as with Tesco Fresh & Easy Neighborhood Market CEO Tim Mason.

Those who know both Mr. Pugh and Mr. Mason describe them as friends. Jeff Adams and Brian Pugh worked closely together in the past at Tesco-Lotus in Thailand. Both men also are former employees of Wal-Mart, Inc.

Since Brain Pugh and Mr. Adams shared the vice president of retail operations position, we don't expect there to be a major problem in terms of Jeff Adams' getting up to speed on the portion of the shared duties that belonged to Mr. Pugh.

However, Brian Pugh did have an institutional memory of the chain since he was part of Fresh & Easy's start up. That knowledge could be a loss to the grocery chain, along with other aspects of his knowledge and experience.

Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 5

On March 12 Fresh & Easy Buzz was one of the first publications to report that Jeff Adams, the former CEO of Tesco PLC's Tesco-Lotus retail division in Thailand, was joining Fresh & Easy Neighborhood Market USA in a senior executive position reporting directly to CEO Tim Mason.

Yesterday, Tesco's Fresh & Easy Neighborhood Market formally announced (and confirmed our March 5 report) that Adams has joined the small-format food retailing venture as executive vice president of operations, reporting directly to Tim Mason.

An interesting aspect of Adams' position and title is that he will share it with Bryan Pugh, who held the executive vice president of operations title (and keeps it) and position prior to Adams' arrival from his duties as CEO of Tesco-Lotus in Thailand.

Adams has been working at Tesco's Fresh & Easy Neighborhood Market corporate offices in El Segundo in Southern California for some time, despite the retailer only making the official announcement (and confirmation of our March 5 report) yesterday.

A Fresh & Easy corporate spokesman says Adams, who was born in the United States, will be on the same level as all of the grocery chain's senior corporate executives, each who reports directly to CEO Mason.

For Adams, assuming the co-executive vice president of operations position at Fresh & Easy, which is essentially a start-up with only 61 stores currently open in Southern California, Arizona and Nevada, has likely been a change from his last assignment with Tesco as the CEO of Tesco-Lotus in Thailand, which not only has higher sales than Fresh & Easy, but of which he was number one as CEO.

Additionally, it isn't clear how the co-executive VP's of operations will divide up their duties.

Austin, Texas-based Whole Foods Market, Inc. has a similar arrangement however, with Walter Robb and A.C. Gallo both having the title co-president and the same job description, and reporting directly to CEO John Mackey.

Despite the Whole Foods example, it's still the exception rather than the norm to have two senior executives sharing the same position and title in U.S. food and grocery retailing. Perhaps it's enlightened though, if it can work.

The official position of Tesco's Fresh & Easy Neighborhood Market is that Adams, who was raised in West Virginia and reportedly worked for Wal-Mart in the USA for a time, was added to the grocery chain's senior executive ranks in order to help with Fresh & Easy's rapid store expansion program.

While this is part of the reason for Tesco having Adams leave his CEO post at Tesco-Lotus in Thailand, it's not the complete reason.

Our sources for the March 5 report, including one very close to Tesco PLC operations in the United Kingdom, told Fresh & Easy Buzz Tesco CEO Sir Terry Leahy hoped at the time the fact Adams was a native of the U.S. would help the fledgling Fresh & Easy chain better adapt to U.S. food retailing conditions, as well as add an experienced hand to the team.

Fresh & Easy is preparing to resume its rapid new store opening program however. That program saw the retailer open 61 stores from late October, 2007 -to- March, 2008, which is a new store opening rate of about one new store every 2.5 -to- 3 days over that less than six month time period.

As we reported here On March 29, Fresh & Easy Neighborhood Market is taking a three month pause in opening new stores from April until the end of June next month. The next new Fresh & Easy small-format, convenience-oriented grocery store will open on July 2nd in the Orange County city of Manhattan Beach in Southern California.

Tesco has been inking numerous leases for new stores in the last couple months, as Fresh & Easy Buzz readers are aware from our numerous reports on the topic. The company also has numerous Fresh & Easy grocery markets in the pipeline set to open throughout this year in Southern California, Arizona and Nevada.

Additionally, Fresh & Easy Neighborhood Market recently acquired 10 empty former Rite Aid drug store buildings in the Las Vegas Metropolitan region which the grocer is in the process of converting to Fresh & Easy combination basic grocery and fresh foods markets.

New markets also are in the works. Tesco plans to open five Fresh & Easy grocery stores in Bakersfield and Fresno respectively in California's Central Valley early next year. These will be the first Fresh & Easy stores for Tesco in these markets.

One store also is thus far planned for Modesto, which is in the Northern San Joaquin Valley region of the Central Valley, about 130 miles north of Fresno.

Further, next year will bring Tesco's big push into Northern California, when it starts opening the first of its planned 19 stores in the Sacramento Metropolitan region and 18 stores in the San Francisco Bay Area.

Lastly, Tesco plans to build and operate a Northern California distribution center in Stockton, which is in the Northern San Joaquin Valley, about 30 miles from Modesto and about 70 miles from San Francisco. The plan is to have the DC up and running by the end of this year or early next year so it can supply all of the planned Fresh & Easy grocery stores set to open in Northern California.

This aggressive new store opening schedule, beginning with the Manhattan Beach store opening on July 2, should keep both Adams and Pugh busy as co-executive vice presidents for operations.

Tesco originally said it planned to have 200 of the small-format, convenience-oriented combination basic grocery and fresh foods Fresh & Easy markets opened in California, Arizona and Nevada by the end of 2009. The retailer recently scaled back that number, saying it expects to have in the neighborhood of 150 Fresh & Easy grocery stores opened and operating by the end of 2009.

Breaking News: Tesco plc. Makes Major Personnel Change to Fresh & Easy Neighborhood Market USA Senior Management Team

United Kingdon-based Tesco plc. has made its first major change to the senior management team of its Fresh & Easy Neighborhood Market grocery store venture in the U.S.

Jeff Adams, the American-born chief executive of Tesco's Tesco Lotus retail business in Thailand, is moving to Tesco's Fresh & Easy's Neighborhood Market's Southern California-based corporate headquarters as the second in command to CEO Tim Mason.

As our readers are aware, we recently reported that our sources have been telling us that average weekly sales at the 58 Fresh & Easy grocery markets opened to date in Southern California, Arizona and Nevada, are seriously below company targets for this point in time.

Based on information from multiple sources, we estimated in February overall weekly sales at Fresh & Easy stores of about $70,000 -to- $100,000, compared to the retailer's goal of $175,000 -to- $200,000 per week. About a week after our report, the Wal-Street investment firm Piper Jaffray said its research shows the stores underperforming as well. The firm suggested the stores were averaging about $170,000 a week in sales which was about $30,000 less than Tesco's weekly sales numbers of $200,000 are.

In a follow-up analysis, we suggested Piper Jaffray's weekly numbers were too high. We offered that, based on the firm's much higher estimate than ours, we would give the retailer the benefit of the doubt and use our high weekly sales number of $100,000 as the average, which still results in significant underperformance for the stores relative to the retailer's internal targets.

We also argued--and continue to argue-- that a $200,000 a week (too high) estimate at this point in time for Tesco demonstrates a fundamental lack of knowledge of the competitive nature of the Western U.S. retail grocery market. It also shows a failure to properly research the numerous start ups in the region that have failed, or taken years to break even.

However, we also said that if we are wrong--which based on our source information we doubt--and the Piper Jeffrey weekly sales number of $170,000 is correct, then Tesco should be happy and revise their expectations--and sales projections--downward, since if the retailer is really doing average weekly sales of $170,000 in its stores, then its doing far better then our analysis, our sources' analysis, and the analysis of others writing about Fresh & Easy believe.

In our February 21 piece linked here, as well as in numerous other pieces, we've suggested to Fresh & Easy senior management that the fledgling chain needs a major shot of "Localism" in its format, merchandise mix, and overall style of doing business in the Western USA.

Perhaps bringing American-born Adams on board as Fresh & Easy Neighborhood Market's number two reporting directly to Tim Mason is a step in that direction. After all, not one member of the pre-Jeff Adams Fresh & Easy senior management team is a U.S. native. Now there is one.