If they tried to pick a worse time to enter the market, they couldn't have done better

No mention of the Pundit in this story, but yet another report about analysts who see chinks in the Fresh & Easy Concept. The convergence of economic factors has not been kind to Tesco's efforts either. Try to process this quote from one observer: "If they had tried to pick a worse time to enter the market they couldn't have done better."

From The San Gabriel Valley Tribune of March 24:


A spokesman for the Fresh & Easy Neighborhood Market chain says sales at the grocery stores are good, despite claims to the contrary by a senior research analyst with Piper Jaffray.
In a research note titled "Miles Off Target," Piper Jaffray's Mike Dennis suggested that Fresh & Easy, the U.S. division of British food giant Tesco, is about $70 million behind sales expectations.
Dennis said Jeff Adams, an American executive recruited from Tesco's Thailand operations, has been brought in to assist Tim Mason, who launched the U.S. chain last year with a team of other British executives.
Adams, he said, is tasked with understanding "what has gone wrong with the concept" and how the company will recover its investment. Fresh & Easy spokesman Brendon Wonnacott said the markets are doing well, although he didn't offer specific numbers.
"We've been encouraged by the response to our stores thus far," he said. "Sales and repeat visits are growing."
Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corp., said Tesco's timing was certainly not the best given the nation's current climate of housing woes, problems in the financial sector and record-high energy prices.
"If they had tried to pick a worse time to enter the market they couldn't have done better," he said. "The consumer is now focused on value."
Kyser also noted that Fresh & Easy appears to be keeping a low profile.
"I haven't seen much in the way of advertising from them, and in this market you've got to call attention to yourself," he said. "You have to let the consumer know you're here."
Fresh & Easy entered the U.S. market Nov. 8 with the simultaneous opening of six Southland stores, including locations in Arcadia and Covina. The company has so far opened 59 stores throughout Southern California, Las Vegas and the Phoenix area. Eighteen more stores are planned for the Bay Area and 19 for the Sacramento region, according to Wonnacott.
Fresh & Easy is perceived by many as a more upscale, organic kind of market along the lines of Trader Joe's or Whole Foods. But "Supermarket Guru" Philip Lempert, food trends editor and correspondent for NBC News' "Today" show, said that's not the case.
"I would not agree that they are high-priced," he said. "In looking at about 10 of their stores, I found they are typically below a Ralphs or Safeway." Lempert describes the stores - typically about 10,000 square feet with 20 to 30 workers - as small warehouse club-style markets.
They are very efficient and very well-run, he said. "Their pricing has gotten other retailers very nervous," he said. "And to be honest, Tesco has one of the best food safety records in the world."