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CORRECTED: Fresh & Easy Parent Company Takes $1.8B Hit; Will Sell U.S. Stores

About 200 grocery stores in California, Arizona and Nevada will be sold by Fresh & Easy's parent company, Tesco. That does not mean stores will close, a Fresh & Easy spokesman said Friday.

CORRECTION 2:01 p.m. April 19:

Despite reports earlier this week that Fresh & Easy stores would be closing in light of an announcement by its parent company, Tesco, that the stores would be sold, a Fresh & Easy spokesman told Patch Friday there were not immediate plans to close any stores.

"Unfortunately there were some early press reports that we are closing and it’s caused some confusion," Fresh & Easy Spokesman Brendan Wonnacott wrote in an email. "Tesco confirmed they plan to leave the U.S. and sell Fresh & Easy, they also announced they have no plans to close any portion of the Fresh & Easy business.

"Though our parent company plans to leave the U.S., we’re pleased to confirm there are no plans to close any portion of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business.

"We’re confident that we can remain our customers’ favorite neighborhood market and we’ve just launched an exciting new marketing campaign [www.freshandeasy.com/ads]. We look forward to serving our neighbors for many years to come."

Editor's Note: Patch apologizes for its initial incorrect reporting of this matter.

ORIGINAL POST:

The corporate dithering is finally over at Fresh & Easy. The British-owned markets, hit by a 96-percent drop in profits, will be sold.

Tesco will end it's 5-year adventure in the United States by writing off $1.8-billion.

There are about 5,000 employed at Fresh & Easy stores in California, Arizona and Nevada, including in Murrieta and Temecula.

A second Fresh & Easy location was slated to open in Murrieta. A company official previously said the store's opening was dependent on the economic climate. Fresh & Easy signs were since removed from the Nutmeg Street location to avoid confusion, the same spokesman said.

Patch reported back in December 2012 and February 2013 that Tesco was in a quandary about what to do with the chain of about 200 European-style convenience groceries in California, Arizona and Nevada that seemed to puzzle American shoppers. The hybrid operation featured prepackaged, often precooked meals in a smallish space, about one-fifth the size of American supermarkets, according to Mark Lacter of LA Biz Observed. All the checkouts were self-service, and assistance from employees was often hard to find. 

In addition, Tesco was saddled with a 800,000-square-foot distribution facility the company built in Riverside.

And there was that little matter of the San Diego attorney general who found their overcharging a bit troubling.

The stores began opening in November 2007 just before the recession; the sub-prime mortgage crisis forced most shoppers to pull in their belts. It was an era that saw the consolidation of supermarket locations, and even the closing of less profitable sites like Albertsons.

Yet, there was considerable competition from mass marketers like Walmart, Costco, Ralphs, Whole Foods and Trader Joe’s.

"While Tesco has done well with its range of compact Metro stores in the UK -- built close to public transport links so shoppers can grab a few items of food on their way home from work -- the idea did not translate well to the U.S. In the American west, most shoppers drive to supermarkets -- sometimes just once a week -- and will look for a broader range of products," Marc Levinson, author of "The Great A&P and the Struggle for Small Business in America" told the Associated Press. 

Analyst Neil Saunders of Conlumino in London told the Los Angeles Times that “the inevitably painful decision to cut and run was correct.”

Christine April 18, 2013 at 04:28 PM
Will not miss these stores at all. Open Barons at Nutmeg and Jackson. Even a Trader Joes would be nice.
sandra serebreni April 18, 2013 at 04:58 PM
I am really sad. Being British I love Fresh & Easy not only for the few British goods I can pick up, but, I thought their concept was great. Prepackaged goods and self service meant no lines. I also thought their premade meals were pretty good too, (and I'm a chef), and it's nice to get fresh, premade, healthly meals instead of frozen. I do see where the fact that they are not a "one-stop" shop was a problem here. Because we are so spread out and have to drive, it's nice to be able to go into a market that has your bank, pharmacy, sometimes a Starbucks, and even a Redbox for your movie rentals. Where there is a business environment, some markets even have a small cafe too. I will miss you Fresh and Easy!! Sandra
Vicki April 18, 2013 at 05:54 PM
.....or another Organic Roots. Would be great to see them expand.
OEFrank April 18, 2013 at 06:23 PM
One stop shopping is a GREAT concept and Fresh & Easy locations didn't provide me with the one stop shopping concept. I've been going to one in Murrieta for over 18 months and I see the same employees but they still don't know me and still follow me around the store to see if I am shoplifting.
OEFrank April 18, 2013 at 06:36 PM
One stop shopping is a GREAT concept and Fresh & Easy locations didn't provide me with the one stop shopping concept. I've been going to the one in Murrieta for over 18 months, see the same employees all the time but they still don't know who I am and follow me around the store to see if I am shoplifting. The two main reasons why this store failed is location & customer service(they do not know their customers)
Anthony April 18, 2013 at 06:47 PM
Fresh and Easy coupons are (were) the best ever...5 off $25, $10 off $50. No gimmicks needed such as clipping the coupons or going to the web site and click on the savings you would like. I dread going back to the other stores.
Sandra P April 18, 2013 at 06:53 PM
This is an erroneous article! Tesco has the company up for sale. At no point has tesco or fresh and easy said people were being terminated. In fact, yesterday after tescos announcement employees and customers were both assured that at this time NO stores are closing, no one is being laid off. New products and a new ad campaign are just beginning. From one of the 5,000 employees you are throwing under the bus prematurely!
Laura S. April 18, 2013 at 09:43 PM
I will miss these stores. I don't need a bunch of employees hanging around, just grab what I need and do the self check-out. So quick and hassle free. Baron's is nice but I preferred F&E for fresh cut fruit at great prices, good selection of produce, lots of raw nuts well priced, shredded cheeses, yummy ice cream, chile rice chips, coffee cake coffee & their humus. But their yummiest item is their tortilla soup, try some in an omelet, absolutely delicious. All the Trader Joes out here are too far north or south for me and I don't much like their produce selection. Parking @ the Temecula store is a hassle and most the customers their are rude & pushy.
Laura S. April 18, 2013 at 09:44 PM
*there
AnnieB April 19, 2013 at 12:04 AM
Trader Joes.....Trader Joes.....Trader Joes.....
gg April 19, 2013 at 04:50 AM
F&E has so many organic wholesome products and that is all you here people screaming about these days. They carry gluten free, preservative free natural products and consumers just ignored this store. Too weird. I think they expanded too rapidly and maybe they should have changed the name of their stores..re branded themselves to "the healthy grocery" the "healthy place" or something like that. Remember, it took many, many years for Trader Joe's to catch on and expand. Very few had heard about them(they only had about 4 stores total in L.A. and OC in the 60's and 70's). They had "weird" tasteless products. Now you can't find a place to park to shop. I think F&E should have established themselves in the U.S. first, then after people caught on to them, then expand. Too bad...they really are just as good if not better than TJ's.
nanomole39 April 19, 2013 at 06:06 PM
please support freash and easy by signing :http://www.change.org/petitions/fresh-and-easy-keep-fresh-and-easy-stores-open
nanomole39 April 19, 2013 at 06:10 PM
Also this article is wrong,do your research properly this affects peoples livelihood !
Cyclist April 19, 2013 at 09:20 PM
Nutmeg and Jackson is a horrible place for any retail store. There is very little traffic and not enough local population to support anything here. This lot should have been zoned residential. Nice planning Planning Commission.
Cyclist April 19, 2013 at 09:22 PM
"follow me around the store to see if I am shoplifting." I have never been followed around like this in Fresh and Easy. Do you look like you are up to no good? Maybe it's time to change your appearance.
Marc June 08, 2013 at 07:15 PM
I got banned from the Palm Springs F&E because I used a coupon twice in one day while shopping with a friend. We made 2 separate transactions and the manager "Steve" told us to go shopping down the street at "Ralphs", which I was only not shopping at because it is too busy compared to F&E. (no it was not a joke)We were even threatened with having the police called, to which we responded, "please do so we can report this event" at which point the manager called some of his employees to escort us out. The coupon we used was recognized and authorized by the self-checkout machine, all while "Steve" the manager was menacing us for using the coupon. I think the overall managament of F&E may be good. I can't say for sure, because I have never had to make a formal complaint about any person working there, but I will have to wait and see how the F&E complaint card results. One this is for sure one bad apple, destroys them all, and Steve, the "manager" has got to go. What a terrible experience over a $5 coupon after I have spent thousands of dollars in F&E. It's no wonder, TESCO wants someone to buy this business. Thank god I have the option of shopping at other places near my second home in Newport Beach.
Marc June 08, 2013 at 07:16 PM
I got banned from the Palm Springs F&E because I used a coupon twice in one day while shopping with a friend. We made 2 separate transactions and the manager "Steve" told us to go shopping down the street at "Ralphs", which I was only not shopping at because it is too busy compared to F&E. We were even threatened with having the police called, to which we responded, "please do so we can report this event" at which point the manager called some of his employees to escort us out. The coupon we used was recognized and authorized by the self-checkout machine, all while "Steve" the manager was menacing us for using the coupon. I think the overall managament of F&E may be good. I can't say for sure, because I have never had to make a formal complaint, but I will have to wait and see how the F&E complaint card results. One this is for sure one bad apple, destroys them all, and Steve, the "manager" has got to go. What a terrible experience over a $5 coupon after I have spent thousands of dollars in F&E. It's no wonder, TESCO wants someone to buy this business. Thank god I have the option of shopping at other places near my second home in Newport Beach.

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