Tesco Opens First Fresh & Easy Neighborhood Market Store in California's Northern Central Valley Today - in Modesto

A long line of shoppers waited this morning for the opening of the Fresh & Easy store in Modesto, California, as you can see in the photograph above, and in the next two photos below.

[Related Story: March 19, 2011: Preview: Fresh & Easy Neighborhood Market is Headed to Save Mart Supermarket's Hometown of Modesto]

A big crowd of shoppers braved the wind and rain this morning to attend the grand opening of Tesco's first small-format Fresh & Easy Neighborhood Market store in Modesto, California.

The store's not only Tesco's first Fresh & Easy market in Modesto (population 205,000), it's also the retailer's first store in the Northern Central Valley, which runs from San Joaquin County to Merced County, and is home to about 1.3 million people. (We'll explain why it's significant for Fresh & Easy to be opening its first store in the Northern Central Valley in an upcoming piece.)

The Modesto Fresh & Easy store, which opened this morning at 10 a.m. and is the first of four units Tesco thus far has planned in Modesto and nearby Ceres, is located in a shopping center at 1717 Oakdale Road (at Lancey Drive). The store is about a half mile from a Save Mart supermarket and an equal distance from a Raley's Superstore.

Prior to Tesco's Fresh & Easy acquiring the location in 2008 [See - November 6, 2008: Upcoming New Markets News: Tesco Will Open A Second Fresh & Easy Store in Modesto, California], the store was previously a supermarket operated by Modesto-based Save Mart Supermarkets. Save Mart closed the store a few years ago when it built and opened a larger and more modern supermarket half-a-mile away. Fresh & Easy renovated the building into the about 12,000 square-foot market it opened to a solid crown of shoppers this morning.

The opening of the Fresh & Easy store at Oakdale Road and Lancey Drive in Modesto was kicked off shortly before 10 a.m, when Modesto Mayor Jim Ridenour and the store's manager (both pictured here) cut the ceremonial ribbon, which was good news to the crowd waiting outside in the wet weather because they were allowed to enter the store shortly thereafter.

The store had a steady stream of shoppers following the 10 a.m opening. A Fresh & Easy Buzz correspondent who attended the opening said a second wave of shoppers showed up between 10:30 a.m. and 11 a,m., keeping the store's aisles fairly packed until noon, when a fresh batch of shoppers, many who work at the nearby businesses, showed up to take a look at Modesto's newest grocery store.

United Kingdom-based Tesco, which is the third largest retailer in the world, is the second major global chain to open a grocery store, Fresh & Easy, in Modesto in the last couple years.

In 2008 Walmart Stores, Inc., the world's largest retailer, opened its first Supercenter in Modesto. That supercenter, which has about 80,000-90,000 square-feet of selling space, also happens to be Walmart's first - and to date only we're aware of - hybrid supercenter located in what was an existing vacant big box building.

The supercenter, which is located on McHenry Drive in Modesto, previously contained a warehouse format supermarket and a drug store. Walmart converted the building into a "hybrid supercenter" in an existing building, something the Bentonville, Arkansas-based global-retailer is now doing elsewhere in California and in other regions in the U.S. The average new construction supercenter is about 170,000 square-feet, although Walmart is currently building some as small as 125,000-145,000 square-feet.

Walmart also has a discount format store in Modesto. The store isn't currently on Walmart's list of those in California it plans to expand and add food and grocery sections to, however.

Despite Walmart's opening of the hybrid supercenter in 2008 and now Tesco's entry into Modesto with its first Fresh & Easy store, the city's dominant food and grocery retailers remain locally-based.

The top grocer in the city of 205,000 is Modesto-based Save Mart Supermarkets, which has seven stores in Modesto - five Save Mart banner supermarkets, one Food Maxx discount warehouse store and a Maxx Value Foods discount supermarket.

Maxx Value Foods, a take off on its bigger cousin Food Maxx, is Save Mart's newest format. The Modesto headquartered grocery chain, which has 241 stores throughout Northern California, northern Nevada and as far south in the Central Valley as Bakersfield and about $5 billion in annual sales, converted a former Save Mart supermarket on Paradise Road in west Modesto into the Maxx Value Foods discount supermarket, which currently is the only one in operation. The format is a test for Save Mart and if it succeeds the retailer could convert some of its older, existing Save Mart stores located in lower income neighborhoods, which Paradise Road in Modesto is, into Maxx Value stores.

West Sacramento-based Raley's is Save Mart's leading competitor in Modesto. It has four stores, all under the Raley's banner. [ See - March 19, 2011: Preview: Fresh & Easy Neighborhood Market is Headed to Save Mart Supermarket's Hometown of Modesto.]

The big turnout at this morning's Fresh & Easy store opening was likely due to a number of factors, including the fact the grocer mailed its weekly ad flyer, which included a coupon good for $10-off purchases of $20 or more and another offering a free reusable canvas shopping bag for purchases of $10 or more, to homes throughout the immediate area, along with to those located in neighborhoods at least as far as two and a half-to three miles from the 1717 Oakdale Road store.

Additionally, Modesto has a very high unemployment rate. the city and Stanislaus County, which it's the county seat of, currently suffers from a joblessness rate of nearly 19%, compared to California's overall 12.4 unemployment rate.

The city and county also have among the highest housing foreclosure rates in the country. Stanislaus County has rated among the top five U.S. counties for residential foreclosures since 2008. The median value of a home in Modesto has dropped by about 40% since 2005.

As a result of these continuing economic struggles, a grocery store grand opening is the perfect venue for the unemployed - a decent outing without a ticket price - and for those looking for a good deal on groceries. A number of shoppers told our correspondent just that this morning.

Lastly, over the last few years grocery store openings have simply become rather popular outings, particularly for the people who live in the neighborhoods where the new stores open. After all, from sociological and anthropological perspectives, grocery stores are far more than merely places to buy food. Their "third places" in which much of the needs of societies and neighborhoods, along with individuals, are met.

Before and after: Pictured above is the inside of the Fresh & Easy store at 1717 Oakdale Road in Modesto on January 31, 2001. Below is the store this morning at the grand opening.

Walnut Creek

In addition to opening the store in Modesto today, Tesco also opened a Fresh & Easy market in Walnut Creek, which is in the eastern part of the San Francico Bay Area. Walnut Creek is next door to Concord, where the grocer opened a store last Wednesday. Walnut Creek is about 65 miles from Modesto.

There are now seven Fresh & Easy markets in Northern California, all opened between March 2 of this year and today. Four additional stores are scheduled to open in Northern California in April.

With the opening of its two newest stores in Modesto and Walnut Creek today, Tesco's Fresh & Easy now operates 171 stores in California, Nevada and Arizona. The majority of the stores, 122 units, are in California. Of the 122 California Fresh 7 Easy stores, 108 units are located in Southern California. In addition to the seven stores in Northern California, there are seven Fresh & Easy markets in the Bakersfield metropolitan region and seven units in the Fresno area.

[Photo credit: Fresh & Easy Buzz, March 23, 2011.]

Related Stories

Readers: See (click on) the following links - Fresh and Easy Modesto CA, Fresh and Easy Northern California, Modesto California market, Northern California Market Region, Raleys, Save Mart, Tesco's Fresh and Easy in Norcal 2011 - for related stories in Fresh & Easy Buzz.

A 'Sign of the Times': New Form of Customization and Localization Spotted at Fresno Fresh & Easy Store

The "Sign of the Times" pictured above was spotted and photographed today by @thehieb (on Twitter) at the Fresh & Easy Neighborhood Market store at Cedar and Nees (3040 North Cedar Avenue) in Fresno, California. Tesco has seven Fresh & Easy markets in the Fresno metro region.

As you can see in the photo at top, the store manager, most likely, or a store employee, decided to customize and localize the Fresh & Easy Neighborhood Market standard issue corporate sign, which the grocer installs in all the stores, by adding: "Even if you just came in here to cry" at the bottom, using what looks to be a Magic Marker.

Here at Fresh & Easy Buzz we've said since 2008 that one of Tesco's week points with its 169 Fresh & Easy stores in California, Nevada and Arizona is senior management's failure to customize and localize its stores based on the demographics and lifestyle criteria in the neighborhoods where the stores are located. But we frankly haven't thought about doing the same with the hand wash signs. But then we can't think of everything.

One example of our lack of custom and local-focused product mix critique of Fresh & Easy is this: The Fresh & Easy stores in Riverside and San Bernardino counties in Southern California, which just-released U.S. Census Bureau figures show both have a population that's nearly 50% Latino, as is the case in many other parts of Southern California, the Central Valley and metro Phoenix, Arizona, is identical to the product mix in the stores where the Latino population is less than 10%, such as in parts of Southern California's Orange County.

The store-level Fresh & Easy managers can't doing anything about the product merchandise mix situation however: It's controlled and dictated by Fresh & Easy Neighborhood Market's corporate buying and merchandising department in El Segundo, California.

But in the case of the standard issue hand washing sign, one of which goes up inside every Fresh & Easy store when it's built, it does appear that some customization and localization is going on at store-level, at least at the Fresno store at Cedar and Nees.

And in terms of the 'crying in the bathroom' customization aspect and the local angle explanation, Fresno currently suffering from a variety of economic ills, including having an unemployment rate of about 15%, along with having one of the highest housing foreclosure rates in the U.S. So perhaps that's it? At least we hope its that or something similar in the macro sense that might elicit the potential crying in the bathroom rather than the crying being a reflection on how the store employees feel on a regular basis because of store management.

Either way, it's a creative form of store-level customization and localization. And it's ... a "Sign of the Times."

[Readers: If you spot something you think is unique at a Fresh & Easy store, or in any grocery store or supermarket, shoot a photograph of it and send it to us at freshneasybuzz@yahoo.com. Or if you use Twitter, tweet it to us @FreshNEasyBuzz. If we think it's a suitable "Sign of the Times" we'll use it in Fresh & Easy Buzz.]

Fresh & Easy Neighborhood Market's California WIC Voucher Expansion Program Stalled

Related story - December 15, 2010: A Tale of Two California's: Welcome to the Once Thriving Central Valley.

In July of this year we reported that after much delay, Tesco's Fresh & Easy Neighborhood Market finally began accepting WIC Vouchers at one of its 106 stores in California, the unit at 1025 East Adams Boulevard (Central & Adams) in low-income South Los Angeles. There are 155 Fresh & Easy stores. In addition to the 106 California markets, there are 28 units in Arizona and 21 stores in Nevada.

In our story about the development - July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow - we reported that following the test at the Central & Adams store in South Los Angeles, which opened in February 2010, Fresh & Easy planned to roll out the acceptance of the vouchers, which are provided by the state to low-income mothers so they can purchase specific nutritious foods like whole milk, infant formula, whole grain cereals and breads, and fresh produce, for their children, to selected other stores in California.

At the time, Fresh & Easy was looking to expand its acceptance of the WIC Vouchers to additional stores by at least the early fall, according to our sources.

However, nearly five months later, the grocer has yet to begin accepting the vouchers at any additional Fresh & Easy Neighborhood Market stores in the Golden State, according to our research.

Not long after it began taking the WIC Vouchers at the south Los Angeles market in July, Fresh & Easy sent out a memo, which included a "WIC cabinet/shelf schematic," to store managers at various stores in Southern California and in the Central Valley (Bakersfield and Fresno regions), alerting them that an expansion to other stores would be coming in the near future. But five months later, and with 2010 coming to an end, the roll out has been long-stalled.

We've recently talked to a number of store managers and team leaders at Fresh & Easy markets in Southern California and in the Central Valley, particularly those in low-income neighborhoods, who tell us they aren't sure if or when the acceptance of WIC Vouchers will be rolled out to additional stores, despite being under the impression since this summer that such a roll out was coming well before the end of the year.

One Fresh & Easy management employee in the Central Valley tells us that at least three of the seven stores in the Bakersfield region could see a 10%-15% sales boost simply if WIC Vouchers were accepted at the markets. The employee also told us the other four stores should see an at least 5%-10% increase from WIC because WIC Voucher use is up so much since the recession hit the area hard in 2007-2008.

The Fresh & Easy worker sited a Save Mart-owned Food Maxx discount grocery store and a Safeway-owned Vons supermarket, both located near a Fresh & Easy unit in Bakersfield, that generate tens of thousands of dollars a week in sales from customers using the WIC Vouchers to purchase high-ticket items like infant formula, whole grain breads and cereals, and gallons of whole milk.

A store-level manager in the Fresno area told us a similar story, saying WIC Voucher and food stamp use has grown so much in the Central Valley region over the last few years because of the high joblessness and growing poverty rate that the particular store turns away customers regularly who attempt to purchase WIC-approved items like whole milk, produce, cereals, eggs and other items but are unaware the Fresh & Easy stores don't except the vouchers.

The manager, who has extensive grocery retailing experience in the region, said all seven of the Fresno-area Fresh & Easy stores would see sales growth if they could accept the vouchers, with at least three of the stores likely gaining double-digit sales increases if the WIC acceptance to expanded to the area.

The Central Valley has the highest joblessness rates in California, ranging from 14% unemployment in the best counties to 20% in the worse areas. California's unemployment rate is currently 12.4%.

The region's poverty rate is also among the highest and fastest-growing in the nation. Many experts have taken to calling the Central Valley "America's new Appalachia," for example, because of its high and growing poverty rate.

Unlike food stamps, which today are called SNAP and come loaded on a plastic debit card so grocery stores can handle the transfer of payments electronically at the point-of-sale, WIC Vouchers are paper, similar to a check. Grocers must process the vouchers in the same way they do paper checks.

Tesco's Fresh & Easy Neighborhood Market has self-service checkout and doesn't accept paper checks in the stores. Therefore, its point-of-sales systems aren't set-up to process the paper vouchers - along with paper checks or manufacturers' cents-off coupons.

In order to process the WIC Vouchers at the south Los Angeles store, Fresh & Easy had to make modifications to the store's point-of-sale system. Additionally, store clerks must assist each customer who pays for their purchases using the vouchers.

Based on our reporting, it appears two factors are primarily behind Fresh & Easy's having not rolled out the acceptance of the WIC Vouchers to additional California stores, despite the fact its plans, at least this summer, were to do so.

First, Fresh & Easy Neighborhood Market has had numerous problems with the adapted point-of-sale system at the Third & Adams store in south Los Angeles, in terms of processing the paper WIC Vouchers.

In addition, the grocer doesn't want to establish a full-service checkout lane in each of its stores, which it might have to do if it accepted the vouchers in all 106 of its California stores. Doing so would add to overall store labor expenses. (In our experience and analysis, the added sales from WIC would more than make up for any such added labor costs though.)

Meanwhile, store managers and clerks at numerous Fresh & Easy markets in California, particularly those in low-income neighborhoods in Los Angeles and other parts of Southern California, as well as in the Central Valley, wonder what's taking so long in terms of expanding the acceptance of the WIC Vouchers to additional stores in California?

It seems like a good question for them to ask, since as they've told us, Fresh & Easy store workers are regularly sending shoppers who come in the stores wanting to use WIC Vouchers - as well as customers who use food stamps and cash to shop at the stores but also get WIC Vouchers but can't use them when they shop at Fresh & Easy - down the street to a Vons, Ralphs, Stater Bros., Albertsons, Walmart, Save Mart or other competitor's store - virtually every chain and independent of note in California accepts WIC Vouchers - and losing needed sales in their stores.

[Editor's Note: Three years ago, Fresh & Easy Buzz first pointed out and reported on the fact that Tesco's Fresh & Easy Neighborhood Market, which opened its first stores in November 2007, didn't accept WIC Vouchers. Additionally, in analysis and commentary pieces beginning in 2008 - and right up until the grocer decided to accept the vouchers at its first store, the Central and Adams unit in South Los Angeles on July 29 - we've also pointed out in detail how, from both business (added sales) and ethical grocer perspectives, Fresh & Easy was missing the boat by not accepting WIC in its stores. All this time later, the grocer continues to miss that same boat by failing to roll out the acceptance of WIC to additional stores in California.

Below is a selection of some of those past stories from Fresh & Easy Buzz:

July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow

July 28, 2010: What A Long, Strange Trip it's Been: South Los Angeles Will Be First Fresh & Easy Neighborhood Market Store to Accept WIC Vouchers Starting Tomorrow

July 7, 2010: Tesco's Fresh & Easy Neighborhood Market to Start Accepting WIC Vouchers at Central & Adams Store in South Los Angeles This Month

September 7, 2008: Analysis & Commentary: Should Tesco's Fresh & Easy Put An Asterisk Next to its Motto? Yes; Unless it Corrects Four Operational Omissions

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

February 10, 2008: Tesco's Fresh & Easy Opens Latest New Store in 'Food Desert' City of Compton, California

July 2008: Tesco's to Open A Fresh & Easy Grocery Market in Low Income, Underserved South Central Los Angeles Neighborhood

March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track

July 11, 2008: 'Food Desert' Neighborhoods and Southern California: More on the Fresh & Easy Store Planned For South Central Los Angeles

July 15, 2008: Fresh Food to Bloom in An Inner-City Food Desert: Tesco's Fresh & Easy Breaks Ground For New Store in Underserved South Los Angeles Neighborhood

February 23, 2010: Food Deserts & WIC Vouchers: Half A Loaf For the New Fresh & Easy Store Opening Tomorrow in South Los Angeles

February 24, 2010: Fresh & Easy Store Opens its Doors in South Los Angeles

April 22, 2010: Breaking Buzz: Tesco's Fresh & Easy to Accept WIC Vouchers at its East Adams Store in South Los Angeles

May 14, 2010: Fresh & Easy Neighborhood Market Not Yet Accepting WIC Vouchers at South L.A. Store; No Start Date Set

July 6, 2008: Former NBA Great Earvin 'Magic' Johnson is Working His Business Magic in Urban, Inner City Neighborhoods; We Offer An Idea For Tesco's Fresh & Easy

May 12, 2008: Food Deserts: Coalition to Create 'Blue Ribbon' Commission, Draft Report to Encourage Grocers to Open Stores in Underserved Los Angeles Neighborhoods

February 13, 2008: Leading Democratic Candidate for President Barack Obama Joins Group in Asking Tesco's Fresh & Easy to Put More Stores in Underserved Neighborhoods

June 3, 2008: Fresh & Easy Buzz Redux: Barack Obama to Tesco's Fresh & Easy in Our February 13 Piece: 'Build More Stores in Underserved Neighborhoods'

September 23, 2008: Food Retailing, Society & Economics: 'Food Deserts' and Public Health

March 20, 2009: Federal Government Spending Bill Increases WIC Voucher Program Dollars by $1.2 Billion; 21 Percent Increase

May 28, 2008: Las Vegas Market Report: A 'Food Desert' Neighborhood to Get A New Grocery Store; But it's Not A Fresh & Easy Neighborhood Market

April 27, 2008: New Study Points to Increasing Urban 'Food Deserts' In North America: Locating Stores in 'Food Deserts' A Part of Fresh & Easy's Strategy

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

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

A Tale of Two California's: Welcome to the Once Thriving Central Valley

Related story: December 15, 2010: Fresh & Easy Neighborhood Market's WIC Voucher Store Expansion Program Stalled.

[Fresh & Easy Buzz editor's note: Noted historian, classics scholar and writer Victor Davis Hanson, who's also a senior fellow at Stanford University's Hoover Institution, is a native of Selma, a small city near Fresno in California's Central Valley, where Tesco's Fresh & Easy Neighborhood market has 14 stores - seven each in the Fresno and Bakersfield metro areas.

Hanson currently lives in Selma, where he runs a family farm in addition to pursuing his scholarly work. Two of his most recent books are, 'Makers of Ancient Strategy: From the Persian Wars to the Fall of Rome,' which he edited, and 'The Father of Us All: War and History, Ancient and Modern,' which he authored.

Victor Davis Hanson, who's also a contributing writer for the conservative publication National Review, spent the last three weeks touring the Fresno, California area and other parts of the valley, including its many rural cities and small towns, by bicycle and automobile. The Central Valley native son scholar- farmer wrote about the results of what he calls his "unscientific experiment" in an essay, "Two California's," published in today's edition of National Review Online.

People of differing political ideologies can disagree with Victor Davis Hanson's arguments as to why the Central Valley is where it is today in terms of its high poverty and high joblessness. But despite those reasonable disagreements, the writer paints a very real picture of a region - California's Central Valley - which just happens to produce more food and fiber than any other place in the world - that's in very real and serious economic trouble.

Below is the Central Valley native's essay, which we're pleased to share with our readers today, courtesy of National Review Online.

December 15, 2010
Two Californias
Abandoned farms, Third World living conditions, pervasive public assistance - welcome to the once-thriving Central Valley.

By: Victor Davis Hanson

The last three weeks I have traveled about, taking the pulse of the more forgotten areas of central California. I wanted to witness, even if superficially, what is happening to a state that has the highest sales and income taxes, the most lavish entitlements, the near-worst public schools (based on federal test scores), and the largest number of illegal aliens in the nation, along with an overregulated private sector, a stagnant and shrinking manufacturing base, and an elite environmental ethos that restricts commerce and productivity without curbing consumption.

During this unscientific experiment, three times a week I rode a bike on a 20-mile trip over various rural roads in southwestern Fresno County. I also drove my car over to the coast to work, on various routes through towns like San Joaquin, Mendota, and Firebaugh. And near my home I have been driving, shopping, and touring by intent the rather segregated and impoverished areas of Caruthers, Fowler, Laton, Orange Cove, Parlier, and Selma. My own farmhouse is now in an area of abject poverty and almost no ethnic diversity; the closest elementary school (my alma mater, two miles away) is 94 percent Hispanic and 1 percent white, and well below federal testing norms in math and English.

Here are some general observations about what I saw (other than that the rural roads of California are fast turning into rubble, poorly maintained and reverting to what I remember seeing long ago in the rural South). First, remember that these areas are the ground zero, so to speak, of 20 years of illegal immigration. There has been a general depression in farming — to such an extent that the 20- to-100-acre tree and vine farmer, the erstwhile backbone of the old rural California, for all practical purposes has ceased to exist.

On the western side of the Central Valley, the effects of arbitrary cutoffs in federal irrigation water have idled tens of thousands of acres of prime agricultural land, leaving thousands unemployed. Manufacturing plants in the towns in these areas — which used to make harvesters, hydraulic lifts, trailers, food-processing equipment — have largely shut down; their production has been shipped off overseas or south of the border. Agriculture itself — from almonds to raisins — has increasingly become corporatized and mechanized, cutting by half the number of farm workers needed. So unemployment runs somewhere between 15 and 20 percent.

Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World. There is a Caribbean look to the junked cars, electric wires crisscrossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming around the yards. The public hears about all sorts of tough California regulations that stymie business — rigid zoning laws, strict building codes, constant inspections — but apparently none of that applies out here.\

It is almost as if the more California regulates, the more it does not regulate. Its public employees prefer to go after misdemeanors in the upscale areas to justify our expensive oversight industry, while ignoring the felonies in the downtrodden areas, which are becoming feral and beyond the ability of any inspector to do anything but feel irrelevant. But in the regulators’ defense, where would one get the money to redo an ad hoc trailer park with a spider web of illegal bare wires?

Many of the rented-out rural shacks and stationary Winnebagos are on former small farms — the vineyards overgrown with weeds, or torn out with the ground lying fallow. I pass on the cultural consequences to communities from the loss of thousands of small farming families. I don’t think I can remember another time when so many acres in the eastern part of the valley have gone out of production, even though farm prices have recently rebounded. Apparently it is simply not worth the gamble of investing $7,000 to $10,000 an acre in a new orchard or vineyard. What an anomaly — with suddenly soaring farm prices, still we have thousands of acres in the world’s richest agricultural belt, with available water on the east side of the valley and plentiful labor, gone idle or in disuse. Is credit frozen? Are there simply no more farmers? Are the schools so bad as to scare away potential agricultural entrepreneurs? Or are we all terrified by the national debt and uncertain future.

California coastal elites may worry about the oxygen content of water available to a three-inch smelt in the Sacramento–San Joaquin River Delta, but they seem to have no interest in the epidemic dumping of trash, furniture, and often toxic substances throughout California’s rural hinterland. Yesterday, for example, I rode my bike by a stopped van just as the occupants tossed seven plastic bags of raw refuse onto the side of the road. I rode up near their bumper and said in my broken Spanish not to throw garbage onto the public road. But there were three of them, and one of me. So I was lucky to be sworn at only. I note in passing that I would not drive into Mexico and, as a guest, dare to pull over and throw seven bags of trash into the environment of my host.

In fact, trash piles are commonplace out here — composed of everything from half-empty paint cans and children’s plastic toys to diapers and moldy food. I have never seen a rural sheriff cite a litterer, or witnessed state EPA workers cleaning up these unauthorized wastelands. So I would suggest to Bay Area scientists that the environment is taking a much harder beating down here in central California than it is in the Delta. Perhaps before we cut off more irrigation water to the west side of the valley, we might invest some green dollars into cleaning up the unsightly and sometimes dangerous garbage that now litters the outskirts of our rural communities.

We hear about the tough small-business regulations that have driven residents out of the state, at the rate of 2,000 to 3,000 a week. But from my unscientific observations these past weeks, it seems rather easy to open a small business in California without any oversight at all, or at least what I might call a “counter business.” I counted eleven mobile hot-kitchen trucks that simply park by the side of the road, spread about some plastic chairs, pull down a tarp canopy, and, presto, become mini-restaurants. There are no “facilities” such as toilets or washrooms. But I do frequently see lard trails on the isolated roads I bike on, where trucks apparently have simply opened their draining tanks and sped on, leaving a slick of cooking fats and oils. Crows and ground squirrels love them; they can be seen from a distance mysteriously occupied in the middle of the road.

At crossroads, peddlers in a counter-California economy sell almost anything. Here is what I noticed at an intersection on the west side last week: shovels, rakes, hoes, gas pumps, lawnmowers, edgers, blowers, jackets, gloves, and caps. The merchandise was all new. I doubt whether in high-tax California sales taxes or income taxes were paid on any of these stop-and-go transactions.

In two supermarkets 50 miles apart, I was the only one in line who did not pay with a social-service plastic card (gone are the days when “food stamps” were embarrassing bulky coupons). But I did not see any relationship between the use of the card and poverty as we once knew it: The electrical appurtenances owned by the user and the car into which the groceries were loaded were indistinguishable from those of the upper middle class.

By that I mean that most consumers drove late-model Camrys, Accords, or Tauruses, had iPhones, Bluetooths, or BlackBerries, and bought everything in the store with public-assistance credit. This seemed a world apart from the trailers I had just ridden by the day before. I don’t editorialize here on the logic or morality of any of this, but I note only that there are vast numbers of people who apparently are not working, are on public food assistance, and enjoy the technological veneer of the middle class. California has a consumer market surely, but often no apparent source of income. Does the $40 million a day supplement to unemployment benefits from Washington explain some of this

Do diversity concerns, as in lack of diversity, work both ways? Over a hundred-mile stretch, when I stopped in San Joaquin for a bottled water, or drove through Orange Cove, or got gas in Parlier, or went to a corner market in southwestern Selma, my home town, I was the only non-Hispanic — there were no Asians, no blacks, no other whites. We may speak of the richness of “diversity,” but those who cherish that ideal simply have no idea that there are now countless inland communities that have become near-apartheid societies, where Spanish is the first language, the schools are not at all diverse, and the federal and state governments are either the main employers or at least the chief sources of income — whether through emergency rooms, rural health clinics, public schools, or social-service offices. An observer from Mars might conclude that our elites and masses have given up on the ideal of integration and assimilation, perhaps in the wake of the arrival of 11 to 15 million illegal aliens.

Again, I do not editorialize, but I note these vast transformations over the last 20 years that are the paradoxical wages of unchecked illegal immigration from Mexico, a vast expansion of California’s entitlements and taxes, the flight of the upper middle class out of state, the deliberate effort not to tap natural resources, the downsizing in manufacturing and agriculture, and the departure of whites, blacks, and Asians from many of these small towns to more racially diverse and upscale areas of California.

Fresno’s California State University campus is embroiled in controversy over the student body president’s announcing that he is an illegal alien, with all the requisite protests in favor of the DREAM Act. I won’t comment on the legislation per se, but again only note the anomaly. I taught at CSUF for 21 years. I think it fair to say that the predominant theme of the Chicano and Latin American Studies program’s sizable curriculum was a fuzzy American culpability. By that I mean that students in those classes heard of the sins of America more often than its attractions. In my home town, Mexican flag decals on car windows are far more common than their American counterparts.

I note this because hundreds of students here illegally are now terrified of being deported to Mexico. I can understand that, given the chaos in Mexico and their own long residency in the United States. But here is what still confuses me: If one were to consider the classes that deal with Mexico at the university, or the visible displays of national chauvinism, then one might conclude that Mexico is a far more attractive and moral place than the United States.

So there is a surreal nature to these protests: something like, “Please do not send me back to the culture I nostalgically praise; please let me stay in the culture that I ignore or deprecate.” I think the DREAM Act protestors might have been far more successful in winning public opinion had they stopped blaming the U.S. for suggesting that they might have to leave at some point, and instead explained why, in fact, they want to stay. What it is about America that makes a youth of 21 go on a hunger strike or demonstrate to be allowed to remain in this country rather than return to the place of his birth?

I think I know the answer to this paradox. Missing entirely in the above description is the attitude of the host, which by any historical standard can only be termed “indifferent.” California does not care whether one broke the law to arrive here or continues to break it by staying. It asks nothing of the illegal immigrant — no proficiency in English, no acquaintance with American history and values, no proof of income, no record of education or skills. It does provide all the public assistance that it can afford (and more that it borrows for), and apparently waives enforcement of most of California’s burdensome regulations and civic statutes that increasingly have plagued productive citizens to the point of driving them out. How odd that we overregulate those who are citizens and have capital to the point of banishing them from the state, but do not regulate those who are aliens and without capital to the point of encouraging millions more to follow in their footsteps. How odd — to paraphrase what Critias once said of ancient Sparta — that California is at once both the nation’s most unfree and most free state, the most repressed and the wildest.

Hundreds of thousands sense all that and vote accordingly with their feet, both into and out of California — and the result is a sort of social, cultural, economic, and political time-bomb, whose ticks are getting louder.

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

Northern California Market Region Special Report

Tesco's Fresh & Easy Neighborhood Market is planning to open an additional store in Northern California's Northern Central/San Joaquin Valley, Fresh & Easy Buzz has learned.

The planned new Fresh & Easy unit will be at 1342 East Hatch Road in Ceres, California, which is a city of 43,000, located next door to Modesto, which has a population of 205,000. Modesto and Ceres are in Stanislaus County.

The store will be Fresh & Easy Neighborhood Market Store Number 1360.

The East Hatch Road future Fresh & Easy market is located near another future Fresh & Easy Neighborhood Market store site, which is at Crows Landing Road near Whitmore Avenue. The location is in Ceres but most local residents consider it as part of South Modesto. The two cities literally border each other in the area. [See - March 31, 2009:Despite Having Postponed its Northern California Launch Indefinitely; Tesco's Fresh & Easy Planning Third Store in Modesto, California.]

The 1342 East Hatch Road future Fresh & Easy store location is located at the entrance to the Ceres Plaza Shopping Center and next to an existing Home Depot big box store. It's off Highway 99, which is the major freeway connecting the Central Valley.

In terms of competing grocers, there's a Raley's supermarket nearby, which is a branch of the Sacramento, California-based 133-store chain. A Kmart discount store, which sells a limited assortment of food and grocery items but not fresh foods like meats and produce, is also nearby.

Walmart is planning to build a new food-grocery-general merchandise supercenter in Ceres, not far from the Crows Landing Road/Whitmore and East Hatch Road future Fresh & Easy store locations.

Tesco's Fresh & Easy Neighborhood Market recently applied to the California Alcohol Beverage Control (ABC) Department for an off sale beer and wine license (license number 472764) for the 1342 East Hatch Road location. The license application is a transfer sale from an existing convenience store retailer, Oakdale Chevron & Mini Mart, 260 North Yosemite Avenue, Oakdale, California, according to the California ABC.

We've also verified the Ceres location through additional sources.

Tesco's Fresh & Easy Neighborhood Market doesn't confirm new store locations until it's ready to make a formal annoouncement.

The new Hatch Road site makes for four potential Fresh & Easy markets thus far that Tesco could open in the Modesto-Ceres area. We say potential because obtaining the sites doesn't mean for sure a store will eventually open at the given location, although one most likely will.

One of those stores, the unit at Oakdale Road and Lancey Drive in Modesto, is part of the first batch of 11 Fresh & easy stores Tesco plans to open in early 2011. [See - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011.]

See the three linked stories below for details about the other Modesto and Ceres store locations:

>March 31, 2009:Despite Having Postponed its Northern California Launch Indefinitely; Tesco's Fresh & Easy Planning Third Store in Modesto, California

>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

>November 6, 2008: Upcoming New Markets News: Tesco Will Open A Second Fresh & Easy Store in Modesto, California

Tesco's Fresh & Easy Neighborhood Market continues to look for future store sites in the Northern Central Valley, along with elsewhere in the Northern California region, as it prepares to open its first batch of stores early next year.

For example, so far this year we've reported on the following new Northern California Fresh & Easy store locations the retailer has obtained:

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

>October 26, 2010: Going Semi-Rural: Fresh & Easy Neighborhood Market Buys Property For New Store in Northern California Town of Clear Lake

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

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

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

In terms of opening new stores, nearly all of Tesco Fresh & Easy Neighborhood Market's focus in the first half 2011 will be on California - south, north and in-between.

We see few if any new Fresh & Easy markets being opened in Metropolitan Las Vegas, Nevada during the first-half of next year, based on the information we currently have.

Additionally, based on current information, look for no more than a couple new Fresh & Easy stores to open in Arizona in the first-half of 2011.

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

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

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

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.]

No Additional New Fresh & Easy Neighborhood Market Stores Set to Open This Year; Ten New Units Planned For January 2011

Breaking Buzz

United Kingdom-based Tesco isn't planning to open any additional new Fresh & Easy Neighborhood Market stores this calendar year, Fresh & Easy Buzz has learned. No new stores are set to open in October, November or December 2010 at present, and likely won't be.

However, the retailer is currently planning to open 10 new stores in January 2011, according to our sources. All 10 stores are in Southern California.

New store openings are dynamic and fluid at Fresh & Easy Neighborhood Market headquarters in El Segundo, California. Therefore, the current 10 planned store openings for January 2011 could change in either a plus or minus direction between now and the end of 2010.

Tesco opened nine new Fresh & Easy stores in September. [See - September 22, 2010: California Dreamin': Fresh & Easy Neighborhood Market, Whole Foods Market Combined Open a Total of Four Stores Today in California.]

Fresh & Easy Neighborhood Market was originally considering opening at least three new stores in November 2010. However, that was before Tesco decided to close 13 Fresh & Easy stores - six each in metro Phoenix, Arizona and metro Las Vegas, Nevada, and one unit in Southern California - which it announced on October 5. (there's a list of the addresses of the 13 locations set to close by November 2, 2010 at the top of Fresh & Easy Buzz. Just click the "13 Closing Fresh & Easy Stores List" link.)

Tesco's Fresh & Easy is now in the process of closing the 13 stores. It plans to board the stores up, something it's referring to as "mothballing," saying it might open some or all of the units up again at some time in the future.

All 13 stores are set to be shuttered by November 2, 2010.

Fresh & Easy's real estate department is also trying to sub-lease the stores, which will be difficult, particularly in metro Phoenix and metro Las Vegas, where there's an abundance of vacant retail commercial real estate on the market currently. Apparently "mothballing" is a situational process. If Fresh & Easy is fortunate enough to sub-lease some or all of the stores, that would tend to render opening the stores up in the future a moot point, wouldn't it?

As of today there are 168 Fresh & Easy stores - 93 units in Southern California; seven stores each in metro Bakersfield and metro Fresno, in California's Central Valley; 34 units in metropolitan Phoenix, Arizona; and 27 stores in metro Las Vegas, Nevada.

After closing the 13 stores, Fresh & Easy Neighborhood Market's store-count will be 155. There will be 92 units in Southern California, 28 stores in metro Phoenix, and 21 units in metro Las Vegas. The Bakersfield and Fresno region store numbers will remain unchanged.

On October 5, 2010, Tesco said it plans to open 19 Fresh & Easy stores over the next six months. [See - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market]

The new store opening schedule - 19 stores over the next six months or so - tracks with our research and analysis. Besides the 10 Southern California stores set for January 2011 openings, as we've previously reported, Tesco plans to open 11 stores in Northern California in early 2011. [see - September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011.]

The retailer's plans call for opening some of the 11 stores in February 2011, and opening the remaining units in March. However, that schedule depends on how many of the stores are ready to open at the time. A few of the 11 stores might not be ready to open until April 2011.

Either way, if all 11 are open and operating by the end of March 2011, that equates to 21 stores in six months. If a couple aren't ready to open until April that would work out to about 19 new units six months from now.

As we've previously reported, Tesco's Fresh & Easy plans to distribute to the Northern California stores from its Riverside County distribution center in Southern California, rather than opening its Northern California facility, which has been sitting idle since 2008.

The Northern, Southern and to a lessor degree Central California regions will be Tesco's focus in 2011 in terms of opening new Fresh & Easy stores, based on our information, as well as analysis.

We expect the retailer to open a few stores in metro Phoenix, Arizona, in selected locations, in 2011. Tesco has a number of Fresh & Easy store locations in the region. A few stores are completed but sitting empty. Tesco holds leases on still other metro Phoenix sites where no work at all has been started.

At present we would be surprised if Tesco opens any Fresh & Easy stores in metro Las Vegas, although one or two are possible. Like in metro Phoenix, Tesco has a number of unopened and future store locations it acquired a considerable amount of time ago and is sitting on.

When it reported its half-year sales and earnings on October 5, Tesco said it plans to have 400 Fresh & Easy stores open and operating by the end of its 2012/13 fiscal year. It's currently in its 2010/11 fiscal year, which ends in February of next year.

The retailer also said fiscal year 2013-end is when it plans to break-even. [See - October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market]

To achieve that 400-store mark, Tesco will have to open 245 new stores in less than three years. That's in contrast to having opened 168 - and it will be 155 when the 13 stores close - in its first three years of operation with Fresh & Easy. The first batch of Fresh & Easy stores opened in late November 2007.

In our analysis its a very tall order to open 245 stores in that period of time - and to do so without ending up with numerous poor to very poor locations, which is something Tesco's Fresh & Easy has done - choose way too many bad locations in the first place - in opening the 168 stores in a bit under three years, which is the primary reason it's closing 13 stores, some of which have been open for far less than three years.

For example, three of the six metro Phoenix, Arizona region stores that are closing are in the city of Mesa and two are in Gilbert. See 13 Closing Fresh & Easy Stores List. A more thoughtful store location process would not result in five of the six stores being closed being in just two cities.

[Editor's Note: We will elaborate on Tesco's strategy and plans to open 245 new Fresh & Easy stores by the end of its 2013 fiscal year in an upcoming analysis piece.]

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

Breaking Buzz: Northern California Market Special Report

Tesco's Fresh & Easy Neighborhood Market is hooting for a mid-to-late February 2011 opening for some or all of the eight stores it said on Thursday, August 19 it plans to open in "early 2011," Fresh & Easy Buzz has learned.

[See this related story: August 19, 2010 - Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.']

Of particular importance to the grocer, Tesco wants to open the future Fresh & Easy store at Third Street and Carroll Avenue in San Francisco's Bayview neighborhood and the unit at Cabrillo Highway & Linda Mar Boulevard in Pacifica in February of next year. It would like to open as many of the first eight Northern California Fresh & Easy units as possible in February 2011. But the two stores are a top early priority for Tesco.

The reason Tesco didn't offer a specific opening date for the eight Northern California Fresh & Easy stores and instead said "early 2011" is because the fresh food and grocery chain isn't sure it will have the stores ready to open by the end of February 2001, which is the target opening month. If the stores aren't ready to open by the end of February, Fresh & Easy Neighborhood Market feels confident they will be able to open some if not all eight Northern California units by mid-to-late March 2011.

The Third Street & Carrol Avenue condominium development (pictured above), which includes a Fresh & Easy Neighborhood Market store as the ground floor retail anchor, in San Francisco's Bayview district was kicked off with a big bang on December 13, 2007, featuring a ground-breaking ceremony and press conference attended by San Francisco Mayor Gavin Newsom, Goldman Sachs (financer and owner) executives, Tesco Fresh & Easy Neighborhood Market CEO Tim Mason and other dignitaries. Tesco's Fresh & Easy used the ground breaking ceremony and press conference to signal its intention to open numerous Fresh & Easy markets in the San Francisco Bay Area and elsewhere in Northern California. In January 2008 the grocer announced it's plans to open 18 Fresh & Easy stores in the San Francisco Bay Area. We predicted in May 2010 it would be one of the first Northern California stores to open. It's at the top of the list of the eight stores in Tesco's August 19, 2010 announcement.

In this April 2010 story - Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait - we predicted Tesco would start opening the first of its batch of Fresh & Easy stores in Northern California before the end of its 2010/11 fiscal year, which is over at the end of February 2011. That remains the target opening date, particularly for the San Francisco and Pacifica stores mentioned above.

In this July 29, 2010 piece - July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California - we noted the February 2011 Northern California store opening target date was (and is) fluid at Fresh & Easy for the reason described above. In the piece, published three weeks before the grocer's August 19 Northern California store opening announcement, we also said a March opening of the first batch of stores in Northern California was being discussed if the February 2011 deadline can't be met.

In this story - June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open - we predicted Tesco would announce when it plans to open the first Fresh & Easy stores in Northern California by the end of July 2011. The retailer made the announcement a mere 19 days later. Late July was the initial target date for the announcement.

Pacifica

As we've reported previously, the Pacifica Fresh & Easy location at 5550 Coast Highway in the city's Pedro Point neighborhood, which is where the Mayor of Pacifica, Jim Vreeland, lives, has been completed for nearly two years, although no interior work has been done. That's about to change though: Fresh & Easy is preparing to begin the interior work in the store any day now, according to our sources.
Pacifica, California Mayor Jim Vreeland at the Fresh & Easy Neighborhood Market location at 5550 Coast Highway in the city's Pedro Point neighborhood, where the mayor just happens to live, in October 2008. As you can see in the photograph, the store's exterior is completed.

A representative of the construction company doing the interior work tells us the firm has met in the store with Fresh & Easy Neighborhood Market real estate executives who've approved the final interior plans for the store.

Additionally, according to Mary Ann Nihart, the Mayor Pro-Tem on the Pacifica City Council, Fresh & Easy representatives who tell her the interior work should be starting soon, and that the grocer is shooting for a February 2011 opening for the store in the coastal city located just a few miles from San Francisco.

San Francisco

In a May 2011 story - May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June - we reported that the first phase of a condominium development at Third Street and Carroll Avenue in San Francisco's Bayview neighborhood was set to be completed by the end of June 2011. A Fresh & Easy store is the ground floor retail anchor of the new development. It's the San Francisco store at the top of the list in Tesco's August 19 announcement about the first eight Fresh & Easy stores to open in Northern California in "early 2011."

That "first phase," which includes the ground floor Fresh & Easy space of about 14,000 square-feet, has essentially been completed, with just a few minor details needing to be finished. According to the developer, Tesco's Fresh & Easy is planning, like it is with the Pacifica location, to soon start work on the interior of its future store at 5800 Third Street (at Carroll Avenue) in San Francisco's Bayview district.

Remaining six stores

The Bayview San Francisco and Point Pedro Pacifica stores are the only two of the first eight Fresh & Easy stores set to open in February (or possibly March) 2001 that are built from the ground-up units. And as noted above, both buildings are completed.

In contrast, the remaining six of those first eight Northern California Fresh & Easy stores - San Jose: Bird Ave & Minnesota Ave; Danville: Diablo Blvd & Hwy 680; Walnut Creek: Ygnacio Valley Rd & San Carlos Dr; Concord: Clayton Rd & Ygnacio Valley Rd (all in the San Francisco Bay Area); Modesto (Northern Central Valley): Oakdale Rd & Lancey Dr; and Vacaville (located between the Bay Area and Sacramento): Elmira Rd & Nut Tree Rd - are all existing, vacant retail buildings Fresh & Easy acquired in late 2007-early 2008.

Since the six buildings are existing, all Tesco has to do now that it has a February 2011 opening date target and has publicly announced the eight stores will open in "early 2001," is to start interior construction in the stores and do whatever minor exterior remodeling is needed; paint the exteriors in the Fresh & Easy colors and add signs and logos.

Some minimal exterior work has already been done on some of the six stores. Fresh & Easy Neighborhood Market plans to begin interior work in these stores, like it does in the San Francisco and Pacifica locations, in the coming days, according to our sources.

Since the grocer has a ready-made interior layout and package, which it customizes only minimally depending on a particular store's location and configuration, it's perfectly feasible for all eight stores to be ready to open by mid-to-late February 2011, a full six months from now.

Fresh & Easy would like to be able to open all eight of its first Northern California stores in the same month, in February 2011.

However, according to our sources, it's not wedded to that scenario. Instead, depending on how many units are completed by then, along with some other criteria, it could open some in February and others in March, even extending two or three of the openings to April 2011, although our present information is that it wants to have all eight opened and operating by the end of March 2011, since it has numerous other Northern California units in the pipeline. [See our Northern California Fresh & Easy Store List.] If only one or two of the eight stores are completed in February, Fresh & Easy might also wait until March to open all eight. Remember, the February-March target is fluid, as we've been saying for many months.

Tesco is also in the process of obtaining new store sites in Northern California, in the San Francisco Bay Area, Sacramento region, Northern Central Valley and elsewhere in the market region. We will be reporting on some of those new store sites soon.

Meanwhile, perhaps in a nod to Fresh & Easy Buzz's 'The Insider' columnist - who titled his July 18, 2010 column: 'When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle' - Tesco has stopped paying the fiddle when it comes to Fresh & Easy Neighborhood Market and Northern California, and instead of continuing to watch its competitors burn from the sidelines, is preparing to soon join the fray. Stay tuned.

Below are the linked stories thus far in our '2010 Northern California Market Special Report' series. Note: There are links to other related stories on most of the linked stories below.

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

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

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

Related

March 31, 2009: Despite Having Postponed its Northern California Launch Indefinitely; Tesco's Fresh & Easy Planning Third Store in Modesto, California.

Additionally: Click here to read a selection of past stories on Tesco's Fresh & Easy Neighborhood Market and Northern California. Click the "older posts" link at the bottom of the linked pages for additional posts/pages.

After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

Kroger's Foods Co store in Redwood City, California. Foods Co is a price-impact chain. The format is discount warehouse but has traditional supermarket elements mixed in, making it somewhat of a hybrid. Everyday low-price is the key positioning element.

The Insider: Heard on the Street

After four years of retrenchment in Northern California by Kroger Co., which saw the retailer close its Ralphs Supermarkets division in the region in 2006 - which included selling and closing all of its Ralphs banner supermarkets and beginning to sell off and eventually close all but one (the Cala Foods unit on Hyde Street in San Francisco, which is slated to close soon) of its Cala Foods and Bell Market stores - the second-largest grocery retailer in the U.S. is in the process of making a comeback in the region, focusing on growing its Foods Co discount warehouse store chain. (Note: Harley Delano, the former president of Ralphs' Northern California division, and his son bought five of the Cala Foods/Bell Market stores. The stores - three in San Francisco and two in Marin County - operate today under the Delano's IGA Markets banner.)

Although Kroger closed its Ralphs division in Northern California in 2006, and sold off or closed all of the about 20 Cala Foods and Bell Market supermarkets (except the one) in the market over the following two years, it kept its price-impact Foods Co stores, which today number 11 in Northern California. There are five Foods Co units in the San Francisco Bay Area - two in San Francisco, one in Richmond, one in Pittsburg, and one in Redwood City. There are four Foods Co stores in Sacramento and two units in the south coast region - one in Salinas and another unit in Soledad.

There are 21 Foods Co stores in total. In addition to the 11 above, the remaining units are located as follows below.

Kroger has five Foods Co stores in the Fresno region in the Central Valley - three in Fresno, and one each in nearby Hanford and Tulare. There are also two Foods Co units in Bakersfield and another two stores in the Central Coast region of the state (closer to Southern California like Bakersfield is). Those stores are in Santa Maria and Lompoc.

Only the first 11 listed - the five Foods Co stores in the San Francisco Bay Area, the four in Sacramento, and the Salinas and Soledad units - are considered in the Northern California market proper. Fresno is classified as the Central Valley. Bakersfield and the Central Coast are much farther south. However, all 21 of the stores under the Foods Co banner are operated as an integrated chain by Kroger's Ralphs division, which is headquartered in Southern California.

Kroger Co. inherited most of the 11 Foods Co stores when it acquired the Ralphs/Food 4 Less chain, which was based in Southern California, from Ron Burkle's Yucaipa Company in 1999, in a mega-deal worth $13.5 billion.

In the deal here's what Kroger bought from Burkle: Southern California chains Boys Markets, Hughes Markets and ABC Markets, which were all acquired by Burkle and consolidated over a number of years into Ralphs; Cala Foods/Bell Markets and Foods Co in Northern California; the QFC chain in Washington state; Fred Meyer in the Pacific Northwest and Intermountain region; Smitty's in Arizona; and Smith's Food & Drug Co. in Arizona, Nevada and Utah. The deal is what put Kroger where it is today in terms of being the second-largest food and grocery retailer in the U.S.

Yucaipa had named the Northern and Central California discount warehouse stores, which are similar to the Food 4 Less format but a bit more supermarket format looking in design, Foods Co because the Food 4 Less name was already taken in the regions. Food 4 Less started out as a franchise format and banner for independent grocers. There are a number of different independent, multi-store Food 4 Less owners in Northern and Central California today.

With this brief history established, let's look to the future.

After four years of thinking about what if anything to do in the Northern and Central California market regions - a period in which Kroger didn't grow the Foods Co chain much if any - the retailer has now decided to move forward and open numerous new Foods Co stores, which average about 55,000 -to- 72,000 square-feet, in the San Francisco Bay Area and Sacramento regions in Northern California primarily, but also in the other existing regions.

The Foods Co store growth isn't going to be fast and furious. But but if Kroger's strategy goes as planned, based on what I've been able to learn thus far, the Foods Co new store growth program will be significant and substantial over time.

The first two new stores Kroger hopes to build and open are in the San Francisco Bay Area city of Oakland. In a story on July 17, the Oakland Tribune newspaper reported on the development in the city. Kroger has been working with city officials for nearly a year on the two projects. Read the Tribune story here.

Both of the two planned new Foods Co stores (72,000 square-feet each) are at locations in East Oakland, a low income part of the city that's underserved ("food desert") by food and grocery retailers. One unit is slated for 66th Avenue and San Leandro Street. The other store for an area called Foothill Square.

Most of the existing 21 Foods Co stores in Northern and Central California are in low income neighborhoods. As such, "food dessert" neighborhoods aren't new to the chain. For example, two of the top performing Foods Co stores are in low-income neighborhoods in San Francisco that are underserved by grocers. Those two stores are at 1800 Folsom Street and 345 Williams Ave.

Members of the Oakland City Council have been courting grocers, including Safeway Stores, Inc. which is based in Pleasanton near Oakland, for many years, trying to get one or more supermarkets for East Oakland.

Among the other grocers the members of the Oakland City Council and its Redevelopment Agency have talked with over the past three or so years is Tesco's Fresh & Easy Neighborhood Market. Tesco has one of its 37 confirmed (and additional 14 Fresh & Easy Buzz has uncovered and reported on) Northern California future store locations in Oakland. (See our Fresh & Easy Northern California store list here). Tesco came close to doing a deal on a second location in Oakland but decided not to go forward for various reasons. The grocery chain continues to look for additional sites in Oakland.

I've known about the Oakland sites for some time, since as I mentioned the city of Oakland has been talking to Kroger representatives for many months. But what makes the development interesting now is that the two new Oakland stores are part of a real stategy by Kroger Co. to build the Foods Co chain in Northern and Central California. There's been speculation for the last four years that Kroger might sell or close Foods Co. Clearly the retailer has decided not to do so.

But Oakland isn't a solo play for Kroger with its Foods Co discount warehouse chain in Northern California and the Central Valley.

Kroger is currently looking for Foods Co sites throughout the nine county Bay Area, with a particular focus on the East Bay Area and the South Bay Area regions. Oakland is in the East Bay. The Pittsburg and Richmond Foods Co stores are in the East Bay. The Redwood City unit, near San Jose, is in the South Bay. It's important to note Kroger isn't limiting its Bay Area site search to just the two regions. But they are the key priorities at present.

Kroger Co. also is looking for future Foods Co store locations in the Sacramento Metropolitan region and north of Sacramento. All four of the current units in the region are in the city of Sacramento.

And although its lower on the agenda list, Kroger is also interested in sites in the Northern Central Valley - the Stockton, Tracy, Manteca, Modesto and Merced Metropolitan regions.

Lastly, the retailer is looking for good sites in the Fresno and Bakersfield Metro regions in the Central Valley, along with in the Central Coast region near where it has the two existing stores, in Lompoc and Santa Maria.

Based on the information I have, the two highest priority regions for new Foods Co store locations at present are in Northern California's San Francisco Bay Area and Sacramento Metro regions, however.

Fresh & Easy Buzz has been running an ongoing series since March 2010 on the Northern California market. (See the links at the bottom of this post.) Today's column will become part of that series by virtue of its subject matter.

What is clear from what Kroger is up to with Foods Co - and what all of the grocers the blog has written about thus far in the series are up to in various ways vis-a-vis Northern California and the Central Valley - is... growth. They see loads of opportunity in the region even though it's hyper-competitive.

In fact, Northern California, and to a somewhat lessor degree the Central Valley, is rapidly becoming one of the most hyper-competitive regions in the Western U.S. At present I would rate it as being less hyper-competitive than Arizona and Southern California, but right after Metropolitan Denver, Colorado. And Northern California is rapidly gaining on my hyper-competitive rankings list.

In late June of this year at the company's annual shareholders meeting, Kroger Co. CEO David Dillion said the retailer is interested in making selective acquisitions of healthy grocery chains located in or near its existing markets in 31 U.S. states. Kroger recently raised some cash to do just that, by the way.

The CEO said Kroger is being "highly selective" regarding such acquisitions and doesn’t want turnaround projects or "somebody else's problem." That rules out distressed chains I suppose, if Kroger keeps true to Dillion's word at the shareholders meeting last month.

All my good information right now is that Kroger's current focus and strategy in the Northern California and Central Valley, California market regions is on organically growing the number of Foods Co discount warehouse stores it operates in the markets, along with growing the overall sales of the banner.

But let's remember what Kroger Co. CEO Dillion said about "healthy" acquisitions...in or near the various markets the retailer currently operates in. I plan to take up that discussion in my next column, which will be coming soon. Stay tuned.

['The Insider,' a feature column in Fresh & Easy Buzz, runs weekly -to- fortnightly.]

Recent columns by 'The Insider'

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

~July 13, 2010: A Few Words on The Life and Death of Veteran Southern California Grocer Roger K. Hughes

~June 27, 2010: The Insider: Will Tesco Acquire Supervalu, Inc. and Change its 'Fresh & Easy' Game in America?

~June 12, 2010: Will Phil Clarke Shake Things up at Fresh & Easy Neighborhood Market USA When He Becomes Tesco CEO in 2011?

~May 20, 2010: Welcome to Discountopia USA

~April 29, 2010: Heard on the Street: There's Something About Albertsons ... In Southern California