Another rosy report on Fresh & Easy
Guest blogger Lance Jungmeyer here ...
The hometown press sure goes easier on Tesco than other media, it seems. In addition to The Independent news story referenced in the following post, here is a wire story about Tesco's profit statements.
There have been numerous reports of Fresh & Easy locations missing sales targets by 50% or more. Yet, the article quotes Tesco's statements:
"We are very encouraged by the start Fresh & Easy has made," Tesco said in its earnings statement.
"The first stores opened only in November and we now have over 60 trading. Whilst it is still early days, the response of customers to our offer has surpassed our expectations ... Sales are ahead of budget," it added.
If sales were indeed ahead of budget, clearly Tesco would not be taking a three-month hiatus from opening new locations.
What is striking is how at least one UK analyst laps this up. The story quotes Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.
"Tesco has yet again confounded its doubters, not only with another sparkling set of figures, but also with an upbeat accompanying statement which sets it apart from the crowd," he said.
It is true that overall profits for the retailer are up more than 12%. But from this side of the pond, all that anyone wants to know is this: what are the real numbers at Fresh & Easy?
Don't hold your breath waiting for an official answer from Tesco.
Labels: FDA, Fresh and Easy
posted by Lance Jungmeyer @ 10:20 AM
3 Comments:
Yes, and it's also interesting when the American media miss things out. (Is it becuase it is a British business perhaps we should all want it too fail?!! What rubbish!)
If sales averages per square foot are exceeding $20 in some fresh & easy stores (double the industry average in the US) then given that the average store is 10,000 feet, does that not equal to $200,000 per store, exactly what they were aiming for?
And since 50% of the brands there are own labal, esitimates that the stores were only making $30,000 a week are speculative and now, seemingly, very wrong.
Look at the facts. Every country Tesco's has gone into to take on Wal-Mart, what has come out on top? Tesco. So let's not underestimate them!
Being an industry expert in the US and having the opportunity to visit every Fresh & Easy that is currently operating. There is no way they are performing to $20.00 per square foot in any of their stores let alone the best performing ones. It appears that a zero was left out of square foot part of the equation.
All the speculation of sales performance between $35K - $85K weekly is reality and does not allow anyone except Tesco management to arrive at $20.00 sales per sq ft.
Their recent earnings stating ahead of budget trends is merely because their construction schedule and opening plans are ahead of budget. When you open more stores than you budget, there is a good possibility you could exceed your expectations.
There is no doubt that Tesco has been and still is a successful retailer, but the fact remains they have not made the impact with the American consumer the way they were hoping for, ultimately customers have not rewarded fresh & easy with their patronage.
I've seen sales, customer counts, average transactions, and shrink results from a number of fresh & easy locations. The numbers I've seen directly correlate to the industry speculation rather than the hogwash that Tesco executives are try to feed the public.
Being an industry expert in the US and having the opportunity to visit every Fresh & Easy that is currently operating. There is no way they are performing to $20.00 per square foot in any of their stores let alone the best performing ones. It appears that a zero was left out of square foot part of the equation.
All the speculation of sales performance between $35K - $85K weekly is reality and does not allow anyone except Tesco management to arrive at $20.00 sales per sq ft.
Their recent earnings stating ahead of budget trends is merely because their construction schedule and opening plans are ahead of budget. When you open more stores than you budget, there is a good possibility you could exceed your expectations.
There is no doubt that Tesco has been and still is a successful retailer, but the fact remains they have not made the impact with the American consumer the way they were hoping for, ultimately customers have not rewarded fresh & easy with their patronage.
I've seen sales, customer counts, average transactions, and shrink results from a number of fresh & easy locations. The numbers I've seen directly correlate to the industry speculation rather than the hogwash that Tesco executives are try to feed the public.
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