Despite Postponing its Northern California Launch Again Earlier This Year Tesco's Fresh & Easy Planning Third San Francisco Store; First Stockton Unit

Upcoming New Markets Special Report: Northern California

Despite postponing its Northern California launch once again earlier this year, and having not yet opened any of the numerous Fresh & Easy Neighborhood Market store sites it's paying monthly lease payments on in Northern California, Tesco is planning a third store in San Francisco, California, Fresh & Easy Buzz has learned.

Tesco's Fresh & Easy has also signed a lease for what will be its first small-format grocery and fresh foods market in the Northern San Joaquin Valley city of Stockton, in Northern California. Stockton is located about 75 miles from San Francisco and about 30 miles from Modesto, where we've previously reported the grocery chain now has three Fresh & Easy stores planned.

San Francisco

The planned third San Francisco Fresh & Easy market will be located at 32nd and Clement Street in the City's Richmond District.

The two other planned Fresh & Easy store locations in San Francisco are at 5800 Third Street and Carrol Avenue in the low-income Bayview-Hunters Point Neighborhood, and at Silver Avenue and Goettingen Street, which is a mixed-use residential and commercial neighborhood in the city off of the 101 freeway.

The 5800 Third Street Fresh & Easy store is a new, built from the ground up store which will be the ground floor retail anchor to what is a multi-unit residential condominium building currently being constructed at the location.

The Silver Avenue Fresh & Easy market is planned to go into what is a now vacant building that previously housed a Cala Foods supermarket. Like many of its current 118 stores in California (Southern and Bakersfield), southern Nevada and Metro Phoeniz, Arizona, the Silver Avenue vacant, former supermarket building will be gutted and remodeled by Tesco and turned ino one of its small-format combination grocery and fresh foods markets.

Cala is (or more precisely was) owned by Kroger Co. Kroger Co., through its Ralphs supermarkets division based in Southern California, exited the Northern California market a few years ago, selling off or closing its about 50 Ralphs' banner supermarkets and about 25 Cala and Bell Market banner stores in the region.

All of the Cala and Bell banner stores were in the Bay Area, most in San Francisco or nearby cities. The Ralphs' stores were in the Bay Area and parts of the Central Valley and Sacramento region.

Kroger's Southern California-based Ralphs still operates a couple Cala-Bell stores in the Bay Area, which it is in the process of either selling or closing.

It also operates a couple of its FoodsCo banner discount warehouse stores in the region, including one in San Francisco's Bayview-Hunters Point neighborhood, not far from where Tesco is putting its Third Street Fresh & Easy market in the condominium development. Kroger-Ralphs has no plans to close the FoodsCo warehouse format stores in the region.

San Francisco's Richmond District is a part of the city, along with the next door Sunset District, that collectively also are referred to as "The Avenues," because its numbered streets -- all avenues -- start in the low numbers and run all the way to the high-forties as the streets get closer to the ocean. The Richmond and Sunset neighborhoods end at San Francisco's Ocean Beach, which is the end of land in the city's western portion.

The Richmond and Sunset neighborhoods, both the flatest residential parts of the city, run alongside San Francisco's famed Golden Gate Park -- the park is in the middle, dividing the two neigborhoods, which are two of the largest residential neighborhoods in the city in terms of the numbers of housing units and resident population. San Francisco's population is about 850,000.

There currently are a couple Safeway supermarkets in the Richmond district, along with a couple independent supermarkets. Safeway has a large store right near Ocean Beach that serves residents of both the Richmond and Sunset neighborhoods because of its central location. The store does are very high weekly sales volume.

Safeway Stores, Inc., which is the market share leader in the Bay Area and in the city of San Francisco, is based in Pleasanton, in the eastern part of the region, about 30 miles from San Francisco.

The 32nd and Clement proposed future Fresh & Easy store site once was home to a supermarket. However that store has since closed.

Tesco is only beginning the permitting and approval process for the 32nd and Clement store. And in San Francisco that can be a detailed and long process in terms of gaining approval.

For example, on Wednesday evening, April 15, Mark Warden, a vice president for the Costa Mesa-based Bergman Companies' design and building firm, will be making a presentation to the members of the Planning Association for the Richmond, which is an influencial group comprised of neighborhood residents, Fresh & Easy Buzz has learned. The group's mission is to guide planning and development in its neighborhood.

The presentation is from 7 -to- 9 p.m. at the Richmond Recreation Center, 251 18th Avenue, San Francisco. The Bergman Companies' Warden, representing Tesco's Fresh & Easy, will detail the grocer's plans for the site, including the store's design and other details, according to a member of the neighborhood group, and a notice on the planning association's Web site.

In San Francisco gaining the approval of neighborhood associations -- there's one in nearly every neighborhood in what is a city comprised of many distinct neigborhoods --is crucial to gaining approval from the city to build a commercial project like a retail store.

Most neighborhood groups in San Francisco tend to favor local retail stores over chains, although that doesn't mean chain stores don't get approval in the city. It often depends on the neighborhood. A couple neighborhoods though actually no longer allow chain retail stores of any kind.

San Francisco neighborhood associations like the Richmond District group look not only at a retailer's proposed design for a store when evaluating a proposal -- it's size, physical design, energy use -- they also look at the retail company proposing the store -- it's ethical reputation, environmental policies, whether its union or non-union, for example -- in evaluating if they will support the development or not.

Neighborhood associations in San Francisco don't legally make the decisions as to whether or not retailers get the green light on new retail store proposals in the city -- city government does. But the groups are so influential that seldom does a project a neighborhood association is against get build in San Francisco. On the plus side, it's very seldom if ever the city refuses to approve a retail project supported by a neighborhood association.

This is a key reason that Tesco's Fresh & Easy is having its representative make a presentation to the Richmond District neighborhood planning group.

Other new Northern California developments

Modesto

Fresh & Easy Buzz reported in this March 31, 2009 piece [Despite Having Postponed its Northern California Launch Indefinitely; Tesco's Fresh & Easy Planning Third Store in Modesto, California] that Tesco is building its newest and what it plans to be its third Fresh & Easy Neighborhood market store in the Northern California city of Modesto.

Modesto, which has a population of about 205,000 residents, is located about 90 miles from San Francisco in the Northern San JoaquinValley. Modesto is about a 45 minute drive from the nearest Bay Area city, Livermore, which is located in the Easy Bay region.

Fresh & Easy Buzz has now learned from a commercial real estate source that Tesco is looking closely at a handful of potential sites in Modesto for a possible future fourth Fresh & Easy store location in the city. None of the Fresh & Easy stores have yet to open in Modesto, or anywhere in Northern California.

Tesco hasn't confirmed the three Fresh & Easy planned store sites in Modesto that we've reported on. However we've documented each location through various means, including physical observation of the site, through commercial real estate sources, and via the California Alcoholic Beverage Control Department, in the case of the two stores -- Sylvan Square and Oakdale Road --that Tesco's Fresh & Easy Neighborhood Market has already applied for on sale beer and wine licenses for.

We agreed at the request of our source not to mention the potential sites Tesco's Fresh & Easy is looking at in Modesto for a possible fourth store at this point in time.

Stockton

Tesco's Fresh & Easy is also planning to build a store in Stockton, California, which like Modesto is located in the Northern San Joaquin Valley. Stockton is about 30 miles from Modesto, about 75 miles from San Francisco, and about a 30 -to- 40 minute drive from Livermore. This is the first future Fresh & Easy store site in Stockton we've been able to document.

The planned first Stockton Fresh & Easy market will be located in a redevelopment project in Stockton's Midtown area on what is the location of a former State of California mental hospital which was closed some years ago.

The 103 acre redevelopment site is now owned by the California State University System. Commercial real estate developer Grupe Co. is redeveloping the site, which is called University Place.

Tesco's Fresh & Easy Neighborhood Market has signed a 25-year lease for an about 14,000 square foot parcel in the redevelopment project where it will build a fresh & Easy store from the ground up, according to our sources. Grupe Co. verifies the lease.

Plans call for a mixed-use residential and commercial development, including condominiums and apartments, along with office buildings and retail stores, at the 103 acre site. The development also is the future home for a new satellite campus of the California State University System, hence its name -- University Place.

The closest state university campus is about 35 miles away, in Sacramento. California State University, Stanislaus, which is located about 45 miles from Stockton, in Turlock near Modesto in Stanislaus County, operates a small satellite campus in Stockton. Sacramento State University also offers some classes in Stockton. But the city wants its own comprehensive satellite campus.

Colliers International, which has an office in Stockton, is marketing the University Park redevlopment project in partnership with developer Grupe Co.

We said well over a year ago, when we first reported on Tesco Fresh & Easy's plans to open stores in Northern California, that the grocer would be locating stores in Stockton.

Our research shows that whenever Tesco's Fresh & Easy leases a site for an initial store in a city like Stockton, more units will follow. As a result, look for addialtion Fresh & Easy store locations to come in the city. In fact, we are aware that Tesco is currently shopping for sites for additional Stockton stores.

Fresh & Easy Neighborhood Market's store location strategy is one we've termed a "critical mass" store location strategy, meaning it likes to open and operate numerous stores, located not far from one another in a city, especially in larger cities like Stockton, which has a population of about 320,000. The Modesto example is a good one. It started with one planned store site and is now up to three planned locations.

In terms of the "critical mass" store location strategy, think about what Walgreens does with its drug stores and what Starbucks does with its cafes, opening numerous stores not far from each other in various neighborhoods in a city, hoping that the stores will become defacto neighborhood retail outlets by virtue of their mass availability throughout a given city's various neighborhoods. Critical retail mass.

This (the "critical mass" store location strategy) is what Tesco's Fresh & Easy has been and is doing in its current markets in California (Southern and Bakersfield), Metropolitan Las Vegas, Nevada and in the Phonix, Arizona Metro region. The strategic goal being to become the "neighborhood" grocery market of choice. There are 118 Fresh & Easy stores split between these market regions.

Stockton is where Tesco plans to build its Northern California distribution center. That distribution center is nowhere near completed however. In fact, Tesco has in our analysis intentionally postponed completing its Northern California distribution center as part of its decision to postpone its Fresh & Easy store launch into the region. Tesco has yet to confirm the distribution center will be located in the Stockton area.

As we first reported over a year ago, Tesco has and continues to look for potential Fresh & Easy store sites in cities throughout the Bay Area, the Sacramento-Vacaville region, and in Northern California's Northern San Joaquin Valley (and elsewhere in Northern California), near the cities of Stockton and Modesto. Those cities include Tracy, Manteca and Ripon, along with Turlock, Patterson and Merced, as well as others.

Tesco at present has eight Fresh & Easy locations planned for Fresno, which is about 45 miles south of Merced (which is 30 miles south of Modesto) in the central-near-southern Central Valley.

The grocery chain currently has three stores open and operating in Bakersfield, which is in the southern Central Valley, with plans to open six more in the coming months. Bakersfield is closer to Southern California geographically than it is to Fresno (Central California) and the Northern San Joaquin or Central Valley in Northern California. A good rule of thumb is that anything north of Merced, including Merced, is considered Northern California. Fresno -to- Bakersfield is generally considered Central California. Southern California begins once over the Grapevine, which seperates the southern valley from Los Angeles.

Fresh & Easy Northern California

Originally Tesco planned to have its first Northern California stores opened by mid-2008. Then it said the first stores in the region would open in late 2008. Early this year the grocery chain said it was postponing its Northern California launch indefinately, leaving open the date when it would open its first stores in the region.

Tesco has confirmed it plans to open and initial 37 stores in Northern California; 18 in the San Francisco Bay Area and 19 in the Sacrameno-Vacaville region of Northern California. It's now been over 15 months since it confirmed the 37 Northern California locations.

Fresh & Easy Buzz however has identified numerous additional Northern California planned locations in adition to the 37 announced and confirmed by Tesco's Fresh & Easy.

Below is a list of the 18 planned Fresh & Easy store locations in Northern California's San Francisco Bay Area that have been confirmed by Tesco. Tesco's Fresh & Easy officially announced the 18 locations in January, 2008. [Read our January 30, 2008 story here: [Fresh & Easy Goes On the Record: Announces 18 Northern California Stores in the Bay Area .] Fresh & Easy Buzz had already reported on a number of the planned Northern California locations prior to the public announcement/confirmation by Tesco

The 18 confirmed San Francisco Bay Area locations

>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.

Below is a list of the planned Northern California Fresh & Easy store locations identified and reported on by Fresh & Easy Buzz (with the exception of the Seaside and Oroville locations which were first reported on by local newspapers), but not confirmed to date by Tesco:

San Francisco Bay Area

>Vallejo (two sites). Two additional Fresh & Easy locations in Vallejo; in addition to the Oakwood Avenue unit in the city confirmed by Tesco as one of the 18 sites listed above. Read our report - May 21, 2008: Breaking News: Tesco Has Two New Fresh & Easy Stores in the Pipeline For San Francisco Bay Area; Brings Total to Date to 20 Units For the Region

>Pacifica: 5550 Coast Highway. Pacifica is located about 12 miles south of San Francisco. [Read our report - June 12, 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.]

[Related stories: October 7, 2008: Fresh & Easy Corporate Reps to Meet With Pedro Point Pacifica, CA Neighborhood Residents to Address Concerns Over Store to Open in 2009. October 9, 2008: Pacifica, CA Mayor Jim Vreeland Says He's Excited to Have Fresh & Easy Store Coming to Pedro Point; Says New Center Will Be One of the Best in Town. October 13, 2008: Pacifica Riptide & Fresh & Easy Buzz Join Together to Offer Pacifica, California Citizen Opinions On the Fresh & Easy Store Coming to the City.]

>Palo Alto: Edgewood Plaza Shopping Center. [Read our report - October 15, 2008: Tesco to Locate Fresh & Easy Store in Palo Alto, California; it's First in the City and SF Bay Area Store Number 22 By Our Reporting.] Note: We wrote this piece [ Upcoming New Markets Special Report: Upscale Palo Alto, California is Laying Out the Welcoming Mat to Grocers: Will Fresh & Easy Knock On the Door?] five months earlier, On June 12, 2008. Tesco's Fresh & Easy did come knocking at Palo Alto's door.

[Related story - March 19, 2009: Another Tesco Fresh & Easy Future Market City Bans the (Plastic) Bag: No Plastic Carrier Bags In Palo Alto, CA Supermarkets Starting September 18th.

Sacramento-Vacaville region

Click here to view a list and map of the 19 Tesco-confirmed Fresh & Easy stores in the Sacramento-Vacaville region in Northern California.

Sacramento-Vacaville region - not confirmed by Tesco

>Suisun City: Sunset Shopping Center. Sunset Avenue and State Highway 12. Suisun City is located between Sacramento and the San Francisco Bay Area, not far from the city of Vacaville. [Read our report - September 11, 2008: Tesco's Fresh & Easy Adds Another Store to its Sacramento-Vacaville Market Region Portfolio in Northern California.]

Elsewhere Northern California - not confirmed by Tesco

>Seaside: West Broadway Village Shopping Center. Seaside is located in Monterey County, in Northern California's south-central coast region. Note: The Herald (Monterey County) newspaper first broke the story on the Seaside location. We followed-up and verified the site. [Read our report - July 27, 2008: Fresh Buzz: Tesco's Fresh & Easy Neighborhood Market, Tesco PLC and Related Food Retailing News and Insight.]

>Modesto (3 stores thus far). (1) Sylvan Square Shopping Center; Coffee Road and Sylvan Avenue. (2) 1717 Oakdale Road. (3) Crows Landing Road near Whitmore Avenue.

[Read our reports: Sylvan Square - May 10, 2008: New Markets: Tesco's Fresh & Easy to Move Into Modesto, California Market; Open its First Store in the City Early Next Year. 1717 Oakdale Road - November 6, 2008: Upcoming New Markets News: Tesco Will Open A Second Fresh & Easy Store in Modesto, California. Crows landing Road - March 31, 2009: Despite Having Postponed its Northern California Launch Indefinitely; Tesco's Fresh & Easy Planning Third Store in Modesto, California.]

>Oroville, Butte County: Goldtown Plaza Shopping Center. The local newspaper, the Oroville Mercury Register, first reported on this location. Fresh & Easy Buzz verifield the lease and added some details in our report. [Our report - December 4, 2008: Despite Postponing its Northern California Launch, Fresh & Easy Continues to Grab New Locations in the Region, Including Going Rural.] Oroville is located in a rural region north of Sacramento.

Possible but not yet verified category
>Grass Valley, Nevada County. The local The Union newspaper reported in December, 2008 that Tesco's Fresh & Easy was negotiating with the owner of a closed Ford auto dealership in the city's Goldtwon Plaza to lease the dealership for a Fresh & Easy store. We verified the negotiations but haven't been able to verify the signing of any lease. [Our report - December 4, 2008: Grasss Valley - More on the Northern California Rural Strategy: An Existing Ford Auto Dealership in Grass Valley, CA Could Become A New Fresh & Easy Market.] As a result, we put this potential location in the "possible but not varified category" and don't count it yet as a "verified" Northern California Fresh & Easy planned store location.

Updated May 6, 2009:

Below are additional planned Northern California Fresh & Easy store locations we've uncovered and reported on since this piece was published. Tesco's Fresh & Easy has not yet confirmed these planned locations:

San Francisco Bay Area

>San Francisco, California. 32nd and Clement, Richmond District. This is the third planned Fresh & Easy store for San Francisco thus far, based on our reporting See our April 13, 2009 story here: Despite Postponing its Northern California Launch Again Earlier This Year Tesco's Fresh & Easy Planning Third San Francisco Store; First Stockton Unit.

>Hercules, California. New Town Center planned development. Hercules is in the Easy Bay Area, in Contra Costa County. See our April 17, 2009 story here: Another Planned New Location For Tesco's Fresh & Easy in San Francisco Bay Area: Market to Be Retail Anchor of New Development in Hercules, CA.

>Pleasanton, California. Rose Pavillion Shopping Center. Santa Rita Drive and Rosewood Drive. Pleasanton is in the East Bay Area. See our April 19, 2009 story here: Tesco's Fresh & Easy Signs Lease For New Store in Pleasanton, CA; We Reported 15 Months Ago the SF Bay Area City Was in its Strategic Sites.

Elsewhere Northern California - not confirmed by Tesco

>Stockton, California. University Place development, Stockton. This is the first planned Fresh & Easy store for Stockton. Stockton is in the Northern San Joaquin Valley; about 30 miles from Modesto and 35 miles from Sacramento. See our April 17, 2009 story here: Despite Postponing its Northern California Launch Again Earlier This Year Tesco's Fresh & Easy Planning Third San Francisco Store; First Stockton Unit.

Related stories from Fresh & Easy Buzz:

>November 12, 2008: Analysis: Hard Times at Fresh & Easy - Northern California Expansion to Be Postponed or Shelved Do to Economy; But its Only a Symptom Not the Cause

>November 20, 2008: Analysis & Commentary: Fresh & Easy Neighborhood Market and Tesco's Lowered Expectations

>May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California

>April 13, 2008: April 13, 2008: San Francisco: Cool Bay Breezes, A City Full of History, Cable Cars--And A 'Fresh & Easy' State of Mind

>July 29, 2008: Tesco's Fresh & Easy and San Francisco's Tenderloin Redux: Upcoming Developments Offer First Mover Opportunity For Fresh & Easy or Competitors

>December 29, 2008: Tesco's Fresh & Easy, 'Food Deserts' and WIC Vouchers; A 'Year-End' Analysis & Commentary

>September 30, 2008: News & Analysis: Tesco Reports Half-Year Financials; Reports Loss For Fresh & Easy USA and Sales Per Square Foot Averages

>September 17, 2008: Store Workers at Huntington Beach Fresh & Easy Demand Union Recognition From Tesco Fresh & Easy Neighborhood Market

>November 16, 2008: California: The State of the State and its Economy; Governor to Propose Tax Increases and Massive Spending Cuts to Fix $11 Billion Budget Shortfall

>February 11, 2009: Tesco to Open Third Bakersfield, California Fresh & Easy Store On February 25.

>December 3, 2008: Tesco Opens its First Two California Fresh & Easy Stores Outside of Southern California in the Central Valley City of Bakersfield Today

>November 5, 2008: Upcoming New Markets News: Tesco's Fresh & Easy Confirms Bakersfield, CA Stores; Says First Two Will Open Next Month on December 3rd, 2008

>March 10, 2008: Bakersfield, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade

>May 24, 2008: Upcoming New Markets Special Report: The Changing 'Face' of Retailing in Bakersfield, California

>March 26, 2008: Mid-Week Tesco Fresh & Easy Roundup

>May 14, 2008: Fresh & Easy Buzz Exclusive: Tesco's Fresh & Easy Neighborhood Market Plans to Open Five Stores In the Fresno, California Metropolitan Region

>March 8, 2008: Fresh & Easy Neighborhood Market Northern California DC Likely to Be At Arch Road Site In Stockton

>September 15, 2008: Wal-Mart Expanding its Discount Store-to-Supercenter Conversion Program As Part of its Strategy to Grab Even More Food and Grocery Sales Market Share

>December 29, 2008: Competitor News: Winco Foods to Expand in California and Nevada in 2009; Put Aggressive Focus on Central Valley, Northern California and Northern Nevada

>February 11, 2009: Tesco's Fresh & Easy Isn't the Only Food & Grocery Retailer With its Eyes on Bakersfield: Wal-Mart's Bakersfield Push and Central Valley, CA Strategy

>February 28, 2008: News & Analysis: Tesco's Fresh & Easy Confirms 19 Store Locations for the Sacramento-Vacaville Region in Northern California

>January 28, 2008: Fresh & Easy Applies For Liquor Licenses for Four Sacramento, California Stores

>Monday, November 17, 2008: Sacramento City Design Board Agrees With Oak Park Group on Design Changes For Proposed Fresh & Easy Store; Escrow Closed on $1.1 Million Parcel

>November 12, 2008: Analysis: Hard Times at Fresh & Easy - Northern California Expansion to Be Postponed or Shelved Do to Economy; But its Only a Symptom Not the Cause

>November 16, 2008: Tesco Fresh & Easy CEO Tim Mason Says He's 'Deliriously Happy' With the Chain's Progress Thus Far; We Prefer Andy Grove's 'Only the Paranoid Survive'

>Wednesday, October 8, 2008: Putting the 'Neighborhood' in Neighborhood Market: 'Localism' and Tesco's Proposed Fresh & Easy Neighborhood Market in Sacramento's Oak Park

>Tuesday, October 7, 2008: Sacramento's Oak Park Neighborhood Association Files Appeal On Design of Proposed Neighborhood Fresh & Easy Store; Hearing Set For Oct.15

>Wednesday, October 15, 2008: Hearing Tonight For Sacramento, CA Neighborhood Group's Appeal of Design of Fresh & Easy Store Proposed For Their Oak Park Neighborhood

>December 3, 2008: Swearing-In of New Sacramento, CA Mayor Kevin Johnson Delayed A Few Hours Over A $2.2 Million Tesco Fresh & Easy Agenda Item

>July 16, 2008: Fresh Feature: A Former NBA All-Star Who Wants to Become Mayor, A Trade Union, And A Future Tesco Fresh & Easy Grocery Store In Sacramento, California

>April 29, 2008: Tesco's Fresh & Easy an Issue in Sacramento, California Mayor's Race A Year Before its First Store in the Capital City Even Opens

>March 7, 2008: Former NBA All-Star and Sacramento Native Kevin Johnson is the Driving Force Behind a Fresh & Easy Market in Sacramento's Oak Park Neighborhood

>October 9, 2008: Tesco's Fresh & Easy Has Put 16 of its 93 Stores in Formerly Vacant Supermarket Buildings and Plans to Do More Coversions While the Deals Are Hot

>February 19, 2008: Tesco's Fresh & Easy Serving as an Economic Stimulus Package of Sorts for California's Troubled Commercial Retail Real Estate Industry

>January 30, 2009: Competitor News: Safeway Stores, Inc. Confirms Second Small-Format 'The Market' Unit to Be in San Jose, CA; Fresh & Easy Buzz Nailed it in June, 2008

>December 30, 2008: Competitor News: Smart & Final Appears Pleased With its Eight Hybrid 'Extra' Format Stores, More On the Way in 2009

>December 12, 2008: Competitor News: Safeway CEO Steve Burd Says Small-Format 'The Market' Is 'Good' So Far But Not 'Great;' But Must Be 'Great' in Order To Expand

>December 29, 2008: Competor News: Winco Foods to Expand in California and Nevada in 2009; Put Aggressive Focus on Central Valley, Northern California and Northern Nevada

>September 15, 2008: Wal-Mart Expanding its Discount Store-to-Supercenter Conversion Program As Part of its Strategy to Grab Even More Food and Grocery Sales Market Share

>May 18, 2008: Wal-Mart Looking For Sites in California For it's Small-Format 'Marketside' Grocery

>Tesco thus far has a couple Fresh & Easy stores planned for Northern Nevada, which is much closer geographically to Northern California (less than three hours from Sacramento), and is a much more similar market to Northern California than it is to southern Nevada, which is one of Tesco Fresh & Easy's existing market regions, along with Southern California, Bakersfield and Metro Phoenix, Arizona. Story link: Reno-Sparks, Nevada.

[You can follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]

Tesco's Fresh & Easy, 'Food Deserts' and WIC Vouchers; A 'Year-End' Analysis & Commentary

Fresh & Easy Buzz has written often this year about the concept of "food deserts," which are primarily urban, inner-city neighborhoods underserved by grocery stores that offer a good selection of fresh foods and groceries at affordable prices, but also include underserved rural communities as well.

Much of the emphasis in our coverage, writing and analysis regarding the "food desert" issue is do to the fact Tesco's Fresh & Easy Neighborhood Market has said since it set up shop over two years ago in Southern California that one of its key strategies with the small-format, combination grocery and fresh foods convenience-oriented chain was to locate stores in inner city "food desert" neighborhoods historically underserved by supermarkets.

The "food desert" issue also is a big one in the United States, which also is why we've written about it often this year in Fresh & Easy Buzz. Cities throughout the U.S. are searching for retailers to open and operate food and grocery stores that offer decent selections of groceries and fresh foods at affordable prices in their respective downtown districts and lower income inner city neighborhoods.

Additionally, community and neighborhood groups in many of these same cities have launched programs, often with federal and state government assistance, that attempt to create incentives to lure grocers downtown and into the inner city neighborhoods, where residents often have to drive or take public transportation miles away in order to shop at a full-service, reasonably-priced food store rather than at a high-priced neighborhood mini-mart stores.

In terms of Tesco Fresh & Easy's stated strategy to open a number of its its 10,000 -to- 13,000 square foot fresh food and grocery markets in "food desert" neighborhoods in Southern California, Metropolitan Las Vegas, Nevada and in the Phoenix, Arizona Metro region, the three Western U.S. markets the grocery chain currently has its stores in, the results to date have been less than...well, "strategic."

Out of the current about 104 Fresh & Easy markets Tesco operates in the three market regions, only two of the stores are located in "food desert" neighborhoods. Both of those stores are in Southern California -- one in Compton (Los Angeles) and the other in Los Angeles' Eagle Rock neighborhood, which happens to be a neighborhood undergoing fairly rapid gentrification.

None of the about 55 Fresh & Easy stores in the Metro Las Vegas and Phoenix markets are in low-income, inner city neighborhoods previously underserved by supermarkets. Most of the Arizona stores are in the Phoenix suburbs, in fact.

In terms of Las Vegas, Tesco's Fresh & Easy Neighborhood Market had an opportunity, including an offering of an economic incentive package by the city of Las Vegas, in late 2007 and in early 2008 to locate a Fresh & Easy market in a low-income West Las Vegas neighborhood underserved by supermarkets. However, the grocery chain wasn't interested in the location. A Southern California-based independent supermarket chain, Buy-Low markets, went into the location and recently opened a supermarket in the "food desert" neighborhood in West Vegas.

In terms of new stores in development, Tesco has a Fresh & Easy market being built in a low-income neighborhood in south Los Angeles that is underserved by food stores offering groceries and fresh foods at reasonable prices. That store is scheduled to open sometime in 2009. [Read our July, 2008 report here and an additional story here.]

Additionally, the grocery and fresh foods chain plans to build a Fresh & Easy market near downtown Tempe, Arizona. Downtown Tempe has been without a supermarket for many years. And although the proposed new Fresh & Easy store isn't in the downtown core, it is just about one mile away, making it at least a semi-"food desert" location. [Read our story here: Arizona Region Market Report: A Fresh & Easy Buzz Flashback - Tesco to Locate New Fresh & Easy One Mile Outside Downtown 'Food Desert' Tempe, Arizona.]

In Northern California, where Fresh & Easy was to begin opening its first stores in the San Francisco Bay Area and Sacramento/Vacaville Metropolitan regions early in 2009 but has postponed doing so, the grocery chain has two Fresh & Easy markets slated for "food desert" neighborhoods and two units slated for what we would describe as "semi food desert neighborhoods."

One of the Fresh & Easy stores is in San Francisco's Bayview Hunter Point neighborhood, a low-income area of the city that's been without a supermarket (except for a Kroger Co.-owned FoodsCo warehouse supermarket a couple miles away) for many years, and the other in Sacramento's Oak Park neighborhood, which also is underserved. The rapidly gentrifying Sacramento neighborhood at present has only a Food Source warehouse market, owned by local supermarket chain Raley's, located on the edge of the neighborhood.

The two Fresh & Easy Northern California locations we describe as being located in "semi-food desert" neighborhoods include one near downtown Oakland and another in the small, low to middle income rural Northern California city of Oroville.

The proposed Oakland store (one of two thus far proposed in the city), is in a "semi-food desert" neighborhood, although there are Trader Joe's, Safeway and Whole Foods Market stores nearby.

Fresh & Easy was negotiating to open a third store in west Oakland, in a low-income "food desert" neighborhood near downtown. However, the retailer pulled out of those negotiations saying the location and vacant building it was considering putting the store in were unworkable. [Read our May, 2008 story here: Food Deserts: Tesco's Fresh & Easy Neighborhood Market Won't Create A Retail Grocery Store Oasis in This Particular Oakland, California Food Desert.]

The proposed store for the city of Oroville, isn't particularly in a "food desert" neighborhood. However, since the community as a whole is underserved by supermarkets because of its rural setting and lower to middle income status, we qualify the proposed Oroville unit as a "food desert" location for Tesco's Fresh & Easy.

Lastly, as we've reported, Fresh & Easy Neigborhood Market plans to open two stores thus far in the Northern San Joaquin Valley City of Modesto in Northern California.

Both of the proposed Modesto stores are in neighborhoods (in the vacant buildings) where supermarkets have closed in recent years. There are supermarkets within a short distance of residents in both Modesto neighborhoods. However, because the neighborhoods are currently without supermarkets directly in them because of the closings by the former retailers, we score these as two additional "food desert," or at least "semi-food desert," proposed Fresh & Easy store locations for Northern California, for purposes of our analysis [Read about proposed Modesto store one here and Modesto store two here.]

Fresh & Easy's 'food desert' scorecard

Fresh & Easy Neighborhood Market's "food desert" store location scorecard then looks something like this to date:

>Total current number of stores in Southern California, Metro Las Vegas, Nevada and the Phoenix Metropolitan region equals about 104 units. Total number of those stores that are located in "food desert" neighborhoods -- equals two.

>Total number of new stores in development in "food desert" neighborhoods in these three market regions equals two; one store in south Los Angeles and the proposed Fresh & Easy market to be located on the edge of downtown Tempe, Arizona.

>Total number of stores proposed thus far for Northern California equals about 48 (Tesco's Fresh & Easy has confirmed 37 of those stores, we've discovered an additional 11 in our reporting).

>Total number of these 48 Fresh & Easy markets that are to be located in "food desert" neighborhoods or communities equals 3 units; the Bayview Hunters-Point neighborhood Fresh & Easy in San Francisco, the market in Sacramento's Oak Park neighborhood, and the proposed Fresh & Easy store in the rural city of Oroville.

>Total number of the 48 proposed to date Northern California Fresh & Easy stores to be located in "semi-food desert" neighborhoods or communities equals three; the one Oakland store not far from the Trader Joe's, Safeway and Whole Foods units, and the two Modesto markets. (we are being liberal in scoring these three stores in the "food desert" column for Fresh & Easy.)

On a percentage basis, even if you don't count the "semi-food desert locations," Fresh & Easy appears to be doing better with its proposed Northern California locations -- three out of 48 or six out of 48 if you count the "semi-food desert locations" -- than it has done to date in its three existing markets. OF course, keep in mind none of the Northern California stores have yet to even open.

This is odd in that from an economic and reality-based standpoint, Metropolitan Los Angeles, the city of Phoenix, Arizona, and Metro Las Vegas have as many or more opportunities to locate stores in inner-city neighborhoods (particularly in Los Angeles) than does Northern California.

Why the analysis and 'food desert' scorecard?

We only bring up this analysis and create the scorecard because locating its small-format, combination grocery and fresh foods markets in "food desert" neighborhoods and communities is a stated, strategic objective of Tesco's Fresh & Easy.

Additionally, It's a policy the grocery chain has used to generate much media publicity during the run-up of the opening of its first stores in November, 2007, for example.

Further, It's also something the retailer has used for immediate publicity whenever it has announced plans to open Fresh & Easy stores in underserved neighborhoods, such as on two occasions this year.

For example, earlier this year when it announced plans to built the Fresh & Easy stores in the south Los Angeles location and in Bayview-Hunters Point in San Francisco, the grocery chain held big media events that featured company CEO Tim Mason and city officials cutting ribbons (including Liberal San Francisco Mayor Gavin Newsom, who is strongly pro-union grocery chains, of which Fresh & Easy isn't), along with encouraging the local print and broadcast media to attend and cover the special events in both neighborhoods.

However, based on our scorecard, it appears to date that Tesco Fresh & Easy Neighborhood Market's "food desert" strategy isn't one being followed by the retailer in any real or meaningful manner. Having only two out of about 104 Fresh & Easy markets in neighborhoods underserved by supermarkets that offer fresh foods and groceries at affordable prices doesn't a key element to a retailer's overall store location strategy make, after all.

In addition, having only two (the store in south Los Angeles and the store on the edge of downtown Tempe, Arizona) of its numerous stores in development in Southern California, Nevada and Arizona located in "food desert" neighborhoods doesn't demonstrate that the grocery chain, as it has said publicly in defending its lack of stores in "food desert" neighborhoods, that it initially planned to have just a couple Fresh & Easy stores in underserved neighborhoods, then it would add a number of additional stores in such neighborhoods as time went on.

For example, Even when the two stores (south L.A. and Tempe, Arizona) open, along with the "food desert" neighborhood stores in Northern California, which is a market currently up in the air for the grocery chain anyway, it won't increase the percentage of units it operates in underserved neighborhoods. Actually, if you do the math, that percentage will actually decrease based on the number of new stores set to open in the coming year, compared to the number of those new stores, combined with existing stores, located in underserved neighborhoods.

Fresh & Easy Neighborhood Market spokesperson Brendan Wonacott recently told a number of Southern California newspapers, including the San Diego Union, that the grocery chain is looking to open about one new store every two weeks in 2009, down considerably from the number of new stores its opened this year, which has averaged about one new store every two to three days. If that is the schedule, that would mean opening only 26 new Fresh & Easy markets in 2009, which is less than half of the new stores in the pipeline for Northern California alone, not to mention the numerous new stores in development in Southern California, Arizona and Nevada.

As a result, this schedule would give the retailer about 130 stores at the end of 2009. That's compared to its earlier statements that it planned to have about 300 Fresh & Easy markets operating by the end of next year. If say 6-8 in total (a fair estimate) of these 130 stores are located in "food desert" neighborhoods, for example, that would mean only about 5% of the total 2009 store count would consist of stores located in underserved neighborhoods.

That doesn't seem a significant number for a chain touting such a policy as part of its strategic store location program. The percentage wouldn't be all that bad for a grocery chain that said nothing about locating stores in such low-income, inner-city neighborhoods as part of its stated policy but that's not the case regarding Tesco's Fresh & Easy, which has said all along it is committed to doing so as policy. It's hard to put the "food desert" policy genie back in the bottle when a retailer has used it successfully to gain free publicity.

WIC Vouchers, poor mothers and the 'food desert' issue

Based on our research and sources, it's our analysis that, with a few exceptions, locating its fresh food and grocery markets in "food desert" neighborhoods really is no longer a part of Fresh & Easy Neighborhood Market's store location strategy. Reasonable people could argue that it never was, if you look at the fact that to date only two of its about 104 markets are in such neighborhoods. We give the grocer the benefit of the doubt that it was though, despite the empirical evidence to the contrary.

One of the reasons we believe the "food desert" strategy is no longer something Fresh & Easy is incorporating in any meaningful way is -- besides the observable evidence that suggests it is so -- because Tesco's Fresh & Easy Neighborhood Market does not even accept U.S. federal government-issued WIC Vouchers (Woman, Infant, Children's Program) from the poorest of poor mothers, who are the only people who receive the couchers, in its stores.

The vouchers, which are accepted by close to every supermarket and grocery store in the U.S., including many drug and convenience stores, are given only to mothers who are extremely poor, and can be used only by these mothers to purchase specific items for their babies and toddlers. These specific items include infant formula, whole milk, whole grain cereals, fruit juice and selected fresh fruits and vegetables.

It is in these very low-income, inner-city "food desert" neighborhoods where the majority of poor mothers who receive WIC program assistance and vouchers live, although many live in other neighborhoods where Fresh & Easy markets are located as well.

So follow the logic: Tesco's Fresh & Easy says (and generates publicity from) one of its key strategic store location strategies is to locate stores in low-income, inner city neighborhoods underserved by supermarkets. Yet, never mind it's only opened two of its about 104 Fresh & Easy markets in these "food desert" neighborhoods to date, the fact is the grocery chain doesn't even accept WIC Vouchers in its stores; the very vouchers that enable the poorest of the poor mothers to be able to buy essential and healthy items like infant formula for their babies, and fresh produce and whole grain cereal for their toddlers.

The logic of this practice is non-existent. To take it a step further, suppose Fresh & Easy opened dozens of stores in low-income, inner city "food desert" neighborhoods in 2009. Even if it did, the poorest of the poor mothers in those neighborhoods will still have to take the bus to the nearest competitor's supermarket, likely outside the neighborhood, in order to buy infant formula, fruit juice, whole milk, cereals and fresh fruits and vegetables for their babies and toddlers because Fresh & Easy Neighborhood Markets's corporate policy does not allow the stores to accept the WIC vouchers.

Or use a present day example: Tesco's Fresh & Easy opened a store in Los Angeles' primarily minority, low-income Compton neighborhood earlier this year. Its only one of two supermarkets for the entire 100,000 population community.

Compton has one of the highest percentages of poor single mothers in California; in the entire U.S. for that matter. Thousands of poor mothers in Compton receive WIC Vouchers from the government. For most if not all of them its the only way they could and would buy nutritious foods and beverages for their children. But, the Compton Fresh & Easy store, like all of the other Fresh & Easy markets, doesn't accept WIC Vouchers. Therefore these poor mothers can't make use of one of the only two stores in the community where they can purchase nutritious foods for their babies and toddlers.

On top of this inconsistancy, is the fact Fresh & Easy is missing out on an important source of sales by not accepting the WIC Vouchers. Ironically, the items poor mothers are allowed to purchase with the vouchers are in most cases fairly high-ring products -- infant formula, fresh, whole milk by the gallon, fruit juice, whole grain cereals -- which are just the type of items Fresh & Easy stores need to increase sales of. The federal government pays retailers 100% of the value of the WIC Voucher; it's "free money" to the grocer -- which is one reason nearly 100% of food stores not only welcome the use of the vouchers but incourage it as well.

Lastly, we believe Fresh & Easy's not accepting the WIC Vouchers is an ethical and moral issue. Can a food retailer that claims to be an ethical grocer really be one if they refuse to accept WIC vouchers from poor mothers who in most cases are only able to provide nutritious foods to their kids because they get the vouchers from the government? We think not -- that's it's rather hard to square that dilemma and honestly claim to be an ethical retailer while refusing to accept the vouchers. Imagine the flack Wal-Mart would get if it refused to accept the WIC Vouchers from poor mothers, for example. There is no possibillity of course that the mega-retailer would do so since it loves the added revenue accepting the vouchers brings its stores.

In essense, by its policy Tesco's Fresh & Easy Neighborhood Market is saying to the poorest of the poor (and mothers at that), 'no thanks, we don't want your business in our stores.'

We've talked to Fresh & Easy store employees who on a daily basis have to refuse the WIC vouchers from poor mothers. Every single one of these store-level employees tells us they wish the company would accept them, both because they believe doing so is the ethically correct thing for the grocery chain to do, but also because they scratch their collective heads wondering why the fledgling retailer is willing to turn down added sales just because it doesn't want its store-level workers to process paper.

Fresh & Easy also doesn't accept paper checks or manufacturer's cents off coupons. It does take food stamps because they are distributed in the form of a plastic debit card. Oddly enough though, the grocery chain does accept plenty of its own, self-generated $5-off and $6-off paper store discount coupons. That sort of kills the store-level, labor saving "no paper handling" argument against not taking WIC vouchers, we believe.

Tesco's Fresh & Easy Neighborhood Market has the right to open as many or as few of its small-format, combination grocery and fresh food markets in "food desert" neighborhoods as it desires. After all, its competitors' aren't exactly rushing to open stores in the low-income, inner city neighborhoods in California, Nevada and Arizona, although that is changing as other food retailers are beginning to discover opportunities in these neighborhoods and are locating more stores in them.

However, neither are Fresh & Easy's competitors saying doing so is a key part of their respective new store location strategies and corporate policies, and using it as a publicity angle to generate media ink and impressions, with the goal of that positive press being to positively influence consumers and potential customers as part of the grocery chain's brand building efforts and positioning as a socially responsible grocery chain, which is what Tesco's Fresh & Easy has done and is doing, despite having only two stores located in real "food desert" neighborhoods.

WIC Vouchers: Time for a policy change at Fresh & Easy

On the issue of not accepting WIC Vouchers from the poorest of poor mothers, we suggest Tesco's Fresh & Easy should change its policy beginning with the new year and accept WIC Vouchers. Not only is excepting the vouchers from poor mothers in the stores the ethically correct thing to do, it also makes pure economic sense from a sales perspective. We've called for the grocery chain to do so a number of times this year (click here for those posts) -- and we do so again in this piece today.

It's also is the right thing to do by store employees, who shouldn't be in the position of having to tell mothers they can't purchase infant formula and other nutritious products for their children using the government provided vouchers in a Fresh & Easy store, particularly during the current severe economic recession we are in which finds an increasing number of mothers (many for the very first time in their lives) having to use the WIC Vouchers in order to feed their babies and toddlers.

In fact, we are astounded that groups like the Los Angeles-based Alliance For Healthy and Responsible Grocery Stores -- which has been trying for well over a year to get Tesco's Fresh & Easy Neighborhood Market to sign an agreement with the group, saying it will locate a set number of Fresh & Easy markets in "food desert" communities -- hasn't to date said a word about the fact Fresh & Easy does not accept WIC Vouchers from poor mothers in any of its stores. Perhaps the group doesn't know this to be the case, or it has failed to make the connection between not accepting the vouchers and the "food desert" issue, which if that is the case is a considerable oversight. [Click here to read a letter the group sent to Tesco on the "food desert" issue, along with other related information. There's not a word in all of their literature about the WIC vouchers that we can find.]

For example, here is an opinion piece two leaders of the Alliance For Healthy and Responsible Grocery Stores wrote about Tesco's Fresh & Easy and the "food desert" issue in November of last year in the Los Angeles Times. There's much about wanting the grocery chain to open stores in underserved neighborhoods in Southern California, particularly in Los Angeles, but not a word about the stores' not accepting WIC vouchers, which it would seem would be an issue important to the group since the point of locating stores in low-income, inner city neighborhoods is to make available more healthy and affordable food options to residents, including the poorest of poor mothers who can only provide infant formula and healthy and nutritious foods to their children by using the government-provided vouchers. What about the poor mothers in communities where the current 100-plus Fresh & Easy markets are located, for example, including the two stores in the underserved neighborhoods in Los Angeles?

We are told by sources that the group plans to renew its call early in 2009 for Tesco's Fresh & Easy to locate more of its markets in "food desert" neighborhoods. If it does so, we will be perplexed if the alliance doesn't also call for Fresh & Easy to accept WIC vouchers for poor mothers.

After all, locating new stores is a complex process, particualrly for Fresh & Easy since it has postponed the number of new stores it plans to open next year. The success of Tesco's Western USA fresh foods and grocery retailing venture also is up for grabs at present.

However, changing its policy beginning in January, 2009 to one of accepting the WIC vouchers in all of its stores is something Tesco's Fresh & Easy can do immediatly. And it is something that not only would offer poor mothers the same shopping opportunity at Fresh & Easy stores that they have at all of its competitors, but it would also give Tesco's Fresh & Easy a potential new source of revenue. That's a win-win no matter how you look at it. Plus, it's the right thing for Tesco's Fresh & Easy to do.

Putting the 'Neighborhood' in Neighborhood Market: 'Localism' and Tesco's Proposed Fresh & Easy Neighborhood Market in Sacramento's Oak Park

Fresh & Easy Buzz has received a number of notes today via email about our piece yesterday about the Oak Park Neighborhood Association's appeal of the design of the proposed Fresh & Easy grocery store to be located in Sacramento's Oak Park neighborhood.

[Click on the headline link to read the piece published in the Blog yesterday: "Sacramento's Oak Park Neighborhood Association Files Appeal On Design of Proposed Neighborhood Fresh & Easy Store; Hearing Set For Oct.15."]

The basic thrust of the contents of those notes is this question: Has Tesco's Fresh & Easy Neighborhood Market built and opened any stores to date in Southern California, Nevada and Arizona that are intentionally "Localized" in terms of their design to a specific community or neighborhood?

Here is what we know based on our observations, research and coverage of Tesco's Fresh & Easy Neighborhood Market:

Tesco basically has two store design formats for Fresh & Easy.

The first design format is the one for the Fresh & Easy stores it puts in vacant retail box-style buildings that formerly housed drug stores, supermarkets, big box stores and other retail formats. Fresh & Easy guts these buildings and then remodels them into a Fresh & Easy store.

At this link is a photograph of what the typical Fresh & Easy store that's located in a formerly vacant and then remodeled standard box retail store looks like. The stores can differ in exterior look in terms of their profile/ scale and facade depending on if they are in a former drug store, supermarket or big box store. But they have the same basic exterior design look.

The particular store in Manhattan Beach, California pictured in the link above went into a portion of a vacant Office Depot big box store. The store's profile/scale is higher (vertically) than those Fresh & Easy stores located in former supermarkets and drug stores. But the design look is essentially the same.

The interiors of the Fresh & Easy stores in remodeled retail standard box stores are essentially the same regardless of which market region, city or neighborhood the respective Fresh & Easy store is located at or in.

Fresh & Easy is in the process of adding interior design enhancements to the existing Fresh & Easy stores located in remodeled retail buildings. Therefore, although it has converted most of the existing stores to this new interior package, there still might be a couple not yet finished. Therefore they would look a bit different inside than the ones already converted since those stores would still lack the interior design enhancements. However, once finished all of the stores in this class will look essentially the same inside.

The exteriors of the stores in the remodeled standard box retail buildings also all look pretty much the same, as we mentioned above.

In some cases different types of graphics such as signage are used on the exteriors, along with a couple other differences in a few instances. But in the main the typical Fresh & Easy store located in a remodeled retail standard box building looks the same on the exterior, be it in Southern California, Metropolitan Las Vegas, Nevada or in the Phoenix, Arizona Metropolitan region.

At this link is a photograph of the exterior of a Fresh & Easy store in Anaheim, California that uses a slight signage addition (the metal backing on the sign) and a color change (the four-tone paint job on the exterior) which makes its exterior look a bit different than most of the other existing Fresh & Easy stores in remodeled standard box retail buildings do.

There also are a few Fresh & Easy stores in remodeled formerly vacant retail buildings that have a slightly different look on the outside then the Fresh & Easy store norm in this class because those existing buildings had for example brick on part of the exterior, such as a Fresh & Easy store in Las Vegas we have seen has, or has an archway or two in the front, such as another Fresh & Easy store (the Las Vegas Sun City store) located in a former vacant retail building we are aware of has. But those are a handful of exceptions, and the design isn't purposeful or local. It just happens to be what the existing building looked like in the main.

One significant exception to the standard design norm we are aware of is the Hollywood, California Fresh & Easy store. This store, which was put into an existing building, looks much different than all of the other Fresh & Easy stores located in existing buildings. This is primarily because the space the store went into is different than the former drug stores, supermarkets and other vacant standard retail buildings the majority of the Fresh & Easy stores (those not built from the ground up) are in.

The Hollywood Fresh & Easy store is in an urban center along Hollywood Blvd. The space it went into is of a design unlike those other typical retail boxes. Therefore the store is different from a design perspective because the existing space it went into is different. In other words, the Hollywood Fresh & Easy wasn't custom built to look different. Rather it followed the existing design of the space it went in.

Click here for a photograph of the exterior of the Hollywood, California Fresh & Easy store.

The second design format Tesco has for its Fresh & Easy stores is its built from the ground up new store prototype. Tesco uses this design for all of the new stores it is building from the ground up on empty parcels.

At this link is a photograph of a built from the ground up Fresh & Easy store. All of the new construction Fresh & Easy stores to date use this design or blueprint.

Some of these new store format stores might and can have certain cosmetic additions on the exterior. However, they are limited to graphics differences or slight additions as well.

Based on what we know, Tesco has thus far proposed to customize and localize somewhat one store. That store is a proposed unit in Fresno, California that would go into a popular former restaurant in the city. We reported on this development in Fresh & Easy Buzz on July 23, 2008.

Below is the July 23 piece from Fresh & Easy Buzz:

Wednesday, July 23, 2008

Fresno, California Fresh & Easy Grocery Store to Be First in Chain to Include Local, Community and Neighborhood Design Elements and Features

The Fresno, California City Council last night approved plans for an approximately 15,000 square foot Tesco Fresh & Easy Neighborhood Market at 2820 Tulare Street in the Central Valley city in California.

The 2820 Tulare Street location is the site of Fresno's historic old Hofbrau restaurant, pictured at top, which once was a city landmark famous for its generous portions of roasted beef, turkey, ham, pastrami and other meats and side dishes, along with its numerous varieties of cold draft beers, before it was closed down.

Fresh & Easy Buzz has learned the Tesco Fresh & Easy Neighborhood Market at the old Hofbrau location in Fresno will be the first store in which the grocery chain plans to incorporate local, community and neighborhood elements into the design theme of, which is something we've been suggesting since January Tesco do with its Fresh & Easy stores.

Plans for the Fresh & Easy grocery market going into the old Hafbrau include the store having a clock tower as part of the design, a masonry facade and murals that reflect the historic and cultural nature of Fresno and the 2820 Tulare Street neighborhood.

Including local (community and neighborhood) design features, including using murals with a local flair, is something Fresh & Easy Buzz has suggested in numerous blog pieces Tesco do with its Fresh & Easy stores in order to localize them, better fit into the communities and neighborhoods where it has its stores, and create a better "sense of place" to enhance the shopping experience in the stores for customers.

A member of the Fresno planning department told Fresh & Easy Buzz Tesco wants the store to fit into the historic elements of the neighborhood, as well as play up on the old Hafbrau's historic home there.

We've argued for a number of months that it's important--and will lead to greater success for the grocery chain--for Tesco to localize some of the design elements of its stores so as to respect and reflect the history and culture of the communities and neighborhoods it locates its small-format, combination grocery and fresh foods markets in because doing so will make the retailer not only a more accepted member of the neighborhood, but will pay dividends in the form of increased sales and customer loyalty in return.

As we were the first publication to report on March 17 (with a detailed follow up piece in May), Tesco plans to open at least an initial five Fresh & Easy grocery stores in the Fresno Metropolitan region, and likely will open additional stores in the region down the road. The first Fresno market region stores should start opening in early 2009.

We haven't heard anything from our Fresno sources, both within the city government and in the commercial real estate and business community in the city, about any of the other four planned Fresno region Fresh & Easy stores having localized design enhancements like plans call for the 2820 Tulare Street store going into the old Hofbrau to have. We are continuing to investigate that aspect however.

Meanwhile, based on the overview we received from a source who was at last night's Fresno City Council meeting, it appears the plans for the old Hofbrau building Fresh & Easy grocery store are singularly unique compared to the 63 small-format grocery stores the grocery chain has opened thus far in that the retailer is taking some local community and neighborhood elements and aspects into consideration in the design of the store, rather than it being a cookie cutter-designed grocery market like the current stores, the majority of which have gone into remodeled existing buildings, are.

Like we've been suggesting since December, 2007--localization of some elements of a grocery store's design, along with some aspects of its product mix, is key in today's food retailing and local consumer-conscious society. Or, as the late, longtime former Speaker of the U.S. House of Representatives Thomas "Tip" O'Neill used to say when asked to explain his fabulous success in politics..."Everything is local."

[Note: Here is a link to the original story from the Blog. At this link are links to a number of past Fresh & Easy Buzz about the "Localization" of store design and retail product selection. Those links are located at the bottom of the story at the link.]

[Reader Note: If any Fresh & Easy Buzz readers are aware of any existing Fresh & Easy stores that have customized, local design elements which were intentionally included in the store's design by Tesco's Fresh & Easy Neighborhood Market in order to fit into the style, history and culture of a given neighborhood, please let us know at: freshneasybuzz@yahoo.com. Please tell us the specific store and where it's located. Thank you. You also may offer any comments in that regard or in any regard on the topic using the "comments" link below.]

The proposed Oak Park, Sacramento Fresh & Easy

The Fresh & Easy grocery store slated to be built (and opened in 2009) in Sacramento's Oak Park neighborhood is a built from scratch store. Therefore, what the members of the Oak Park Neighborhood Association refer to in this piece as Fresh & Easy's "original design" is the built from the ground up format described above and pictured (the San Diego store) at the link above.

Theoretically and practically, if it wants to Tesco's Fresh & Easy can make any exterior additions and modifications to one of these new built from scratch stores that it desires. They can be painted different colors or multiple colors, different signs and graphics can be used on the exterior, bike racks can be added outside, as can umbrella tables with chairs and other additions. These modifications and additions can be added at very little cost in the larger scheme of things.

Additionally, Tesco can change how such stores face the street or how they are situated on the parcel without much added expense and very little effort, since the stores are built from the ground up.

Further, certain physical design modifications can even be made to the store exteriors at very little added cost.

Such neighborhood customization and "Localization" is done all the time by retailers ranging from Wal-Mart, Inc. and Safeway Stores, Inc. to Whole Foods Market. These are three very different chains. One is a traditional supermarket chain (Safeway), the other a natural foods retailer (Whole Foods), and the other the largest discount food and general merchandise products retailer in the world.

For example, if you look at Whole Foods' four stores in the city of San Francisco each one looks distinct from the other. Each has certain exterior (and interior) design elements intentionally designed-in so the store fits into its respective neighborhoods look, character, history and culture. They may not be what all neighborhood residents desire, which seldom is the case. But the point is the design elements are included intentionally to "Localize" the store to its neighborhood.

Whole Foods did this most specifically in the 55,000 square foot Oakland, California store it opened in September, 2007 near the city's downtown. That store, which is located in an old car dealership building Whole Foods' gutted, is designed like a European Food Hall.

Whole Foods did this on its own. There was no demand from either the city of Oakland or community groups to do so.

The reason Whole Foods designed the store this way is because the very popular historic Oakland Housewives Market, which closed down years ago, used to be nearby the new Whole Foods food market hall-style store.

The retailer wanted to pay honor to that historic market by making its store "Localized." At the same time the retailer knew doing so made good business sense because residents of a city love stores (and shop in them) that take local elements into consideration. The food hall-style Whole Foods Market store has received praise from Oakland residents, the local press and city officials. And it's doing very well.

Safeway Stores does this "Localization" throughout the U.S. with its Lifestyle supermarkets as well, both for new stores built from scratch and store remodels.

The supermarket chain currently has a proposal to remodel and expand a Safeway store in Washington D.C.'s Georgetown neighborhood for example that's specifically designed to fit into that historic neighborhood in the nation's capital. The neighborhood residents who've viewed the plans are even referring to it as the "Social Safeway," according to the Washington Post, because of how the design, which includes a patio and other features, for the remodeled store fits into the Georgetown neighborhood much better than the existing store does.

Safeway also has proposals for two San Francisco Bay Area store remodels -- one in Berkeley and the other in Oakland -- which include specific local elements suggested by community and neighborhood groups and associations. In fact the discussion involving additional design changes with a focus on neighborhood local elements is ongoing between Safeway and these groups in both cities.

Even Wal-Mart, which receives its share of attention for perhaps not being community minded enough, has in recent years put a major focuses on "Localizing" a number of its huge 160,000 -to over 200,000 square foot Supercenters.

For example, Wal-Mart opened a new Supercenter in Clinton, Tennessee On May 21 of this year that has specific local design elements incorporated into the entire store.

Additionally, Wal-Mart opened a "Localized" Supercenter in July, 2008 in Austin, Texas that included building and paying for the following local amenities: A bike path; a new road behind the store; a newneighborhood bus stop; and three retention ponds. The retailer also paid for and installed two traffic lights to improve neighborhood traffic management.

In 2007 Wal-Mart also built and opened a localized Supercenter in Highland Village, Texas, which is a city with a strong bicycling culture.

Wal-Mart bought additional land around the Supercenter where it built a system of bike paths for neighborhood and city residents. The bike paths connect to the shopping center.

Next to the Supercenter Wal-Mart built a gazebo for neighborhood bike riders. The gazebo features bike racks, drinking water fountains, benches to rest on and compressed air hoses cyclists can use for free to fill their bike tires. Wal-Mart also put a bicycle sales and repair shop inside the Supercenter, demonstrating how going local can also be smart merchandising.

Using local design elements and focusing on additional forms of community and neighborhood "Localization" actually is becoming more the norm rather than the exception for Wal-Mart not only with its Supercenters but with all of its various format stores. This includes paying for, creating and building local neighborhood improvements like it did in the stores mentioned above and has and is doing with numerous others. Wal-Mart is far from the perfect neighbor. But there's no question it has and is becoming a much better "local" retailer.

Epilogue

We end by mentioning what we think is an ironic twist.

Tesco chose the name "Fresh & Easy Neighborhood Market" for its small-format grocery and fresh foods stores specifically because it wants the stores to be the primary neighborhood grocery shopping choice for residents who live in the neighborhoods where the stores are and will be located. In other words Fresh & Easy is your neighborhood food store.

In the specific case of Sacramento's Oak Park neighborhood there are significant numbers (the members of the neighborhood association and others) of neighborhood residents who care so much about their neighborhood they want to have an impact on how what will be the neighborhood's only supermarket when it opens looks and is situated at its location, along with having an input on a few other design and related elements.

It seems to us Tesco's Fresh & Easy is missing out on a huge opportunity which presentins itself in Oak Park. That opportunity is to work closely with the Oak Park Neighborhood Association in the design of the neighborhood Fresh & Easy store. Bring them into the design and building process. Adopt as many of their ideas as they can -- that make sense and don't cost astronomical sums of money. After all it is their neighborhood

Follow that old saying: "If you aren't part of the solution, you're part of the problem." If one or more of the group's ideas for the store's design and siting don't make practical or economic sense, tell them so. Argue a bit. Debate. Explain why. They know the retailer has the last say if a final design is approved by the city.

But bringing them into the process will most likely create a better Fresh & Easy store for the neighborhood. It also will go a long way towards making the Oak Park Fresh & Easy Neighborhood Market the neighborhood's market once it opens. After all, unless we missed something really big, isn't that Tesco Fresh & Easy Neighborhood Market's mission statement?

Fresh & Easy Neighborhood Market's '5800 Third Street' Northern California 'Flagship' Store in San Francisco is Taking Shape

Northern California Market Region Special Report

The future Fresh & Easy Neighborhood Market store at 5800 Third Street (at Carroll Avenue), located in the new '5800 Third Street' residential development in San Francisco's Bayview neighborhood, is taking shape in anticipation of its early 2011 opening. Based on our current information, the store could open as early as February 2011, but no later than April of next year.

As you can see in the photograph at top, the outside signs are now on the store, which is the ground floor retail anchor for what will be a 340-unit residential complex when its fully completed. Up to 1,000 residents will eventually call the development home, according to Rick Holliday, the developer.

The first phase of 5800 Third Street, 137 residential units, has been completed. Oakland, California-based Developer Holliday Development says it's currently offering the 137 homes for sale. A few of the units have already been purchased.

Goldman Sachs' Urban Investment Group is the equity partner in the development. Citi Community Capital is the the construction lender for 5800 Third Street.

One bedroom/one bath units are listed starting at $339,000, with two-bedrooms with two-baths starting at $383,000. Three-bedroom flats with two-baths start at $479,000 and three bedroom/three-bath town homes are listed at $539,000. A percentage of the units are available to low-income residents of the neighborhood at significantly reduced prices.

In a series of stories starting in April of this year, we reported that Tesco would announce this summer its plans to open its first batch of Fresh & Easy Neighborhood Market stores in Northern California in early 2011.

See our story chronology below:

>April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

>May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

>June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

>July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

>July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

>July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

>August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

>August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

>August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA

>September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

>September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

The 5800 Third Street store in San Francisco's Bayview neighborhood is key to Tesco's Northern California launch because it will serve as a "flagship" store of sorts for Fresh & Easy in Northern California.

As we mentioned in a number of the stories linked above, Tesco's Fresh & Easy has started to do interior and exterior work to a number of its first 11 stores in Northern California, which have a February-April 2011 opening time-frame.

Eight of those 11 stores (see addresses here) are going into existing buildings that Tesco's Fresh & Easy Neighborhood market is renovating. The two exceptions are the 5800 Third Street unit, which as the retail anchor of the residential housing project is a build-from-the-ground-up store, and the unit in Pacifica, which is new construction, has been completed for over two years.

The 5800 Third Street (at Carrol Avenue) development in San Francisco's Bayview neighborhood is part of a larger public-private "new village" development in the area, Carroll Station, that's been in the works for over 10 years.

Carroll Station is named after the island platform light rail station of the the San Francisco Municipal Railway's Muni Metro system, which is located in the median of Third Street at Carroll Avenue in the Bayview district.

The new neighborhood community includes the 5800 Third Street residential development, which will eventually house 1,000 residents when it's built out , along with another similar development called Armstrong Place, which is a town home and senior housing complex.

Fresh & Easy Neighborhood Market purchased the 15,000 feet of commercial space at 5800 Third Street for its store.

In addition to the Fresh & Easy fresh food and grocery market the Carroll Station community so far is set to include a restaurant to be operated by Martin and Antonio Castillo, owners of the popular restaurant 'Limon,' which is located in the city's Mission district, along with a new cafe owned by the Delancey Street Foundation, which operates a 300,000 square-foot business training complex at Carroll Station.

The cafe will be called Crossroads Cafe and modeled after a similar cafe of the same name the foundation owns in San Francisco's South Beach neighborhood.

Delancey Street, which was founded by Mimi Silber in San Francisco and is considered an international model, is a residential rehabilitation and training center for ex-offenders, including those with substance abuse addictions. It now has facilities in Los Angeles, New Mexico, North Carolina and New York, along with the San Francisco flagship foundation.

We've said going as far back as early 2008, when Tesco first announced its plans to open a store in the 5800 Third Street at Carroll Avenue development, that it's our analysis the Carroll Station location will be on of Tesco's top five stores in terms of average weekly sales, and likely it's number one grossing store in Northern California, out of the over 50 sites in the region we've identified so far. (See our Northern California Fresh & Easy Store List.)

Look for the opening of the 5800 Third Street store to be used by Tesco's Fresh & Easy Neighborhood Market as its official and formal kick off for its Northern California launch in early 2011.

Linkage: 2010 'Northern California Market Region Special Report' series

November 5, 2010: Fresh & Easy Neighborhood Market Queuing Up Three Additional Stores in Northern California For Early-to-Mid 2011 Openings

November 3, 2010: Tesco's Fresh & Easy Neighborhood Market Plans New Store in Northern Central Valley, California City of Ceres

November 1, 2010: Tesco's Fresh & Easy Neighborhood Market Planning to Build its First Store in Northern California City of Brentwood

October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line

October 27, 2010: Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville

September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California

September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010

September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California

September 18, 2010: Keep On Truckin' - Whole Foods Market Celebrates 30 Years This Weekend

September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'

September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban

August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California

August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA

August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA

August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow

July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening

July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]