Tesco's US Roll Out Follows Two Years of Research

Following a two-year research programme which has seen Tesco's US CEO Tim Mason and his team invest thousands of hours investigating the needs of the American consumer, the supermarket giant will be launching its Fresh & Easy stores in the US by the autumn.

Preparation has included hiring researchers to examine the fridge contents and lifestyles of 60 American families; building a prototype store in a Los Angeles warehouse and flying people in from San Francisco, Las Vegas and Phoenix to test new ideas and products there; and encouraging HQ staff to try out different products each week to hone and refine the product range.

The retailer has given serious attention to studying typical American shoppers. For starters, Mason says, 'We literally went into their kitchens and looked in their refrigerators.' The team also conducted research to examine the Hispanic consumer market to ensure an ethnic range of brand products will be on offer at competitive prices.

One of the major findings has been that consumers who have always visited a variety of different stores to buy their groceries are now demanding a one-stop shop for all their purchases. Mason added: 'Based on our research, we are confident our stores will be a hit in every neighborhood we open in.'

The new chain will aim to provide shoppers with a 'neighbourhood market' shopping experience offering about 3,000 products, focusing on fresh meat, vegetables, packaged goods, wine and beer. Products will be split half and half between Tesco own-brand and other companies' products.

Mason said that most importantly the format will be fresh, saying: 'It is an American store designed for American consumers.' He added that Tesco will not match Wal-Mart's rock bottom pricing strategy, but will instead be somewhere in the middle, offering what he describes as 'good value'.

Tesco is planning to invest £250 million a year in up to 100 site openings; with 50 sites launched by the end of February 2008, and the creation of more than 2,500 jobs within a year. Seven sites in the San Diego area have already been secured and additional locations are being researched. The firm says that it expects the venture to break even in two years. The web site is at www.freshandeasy.com .

In the UK, latest supermarket share figures from TNS Worldpanel show Tesco secured 31.6% of all grocery spend in the 12 weeks to June 17, but with lower percentage growth rates than Asda and Sainsbury's. Tesco operates more than 2,800 stores across 12 countries and employs more than 370,000 people. Its corporate web site is at www.tescocorporate.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.