The supermarket version of the British invasion appears to be over.
The struggling Fresh & Easy chain was effectively abandoned Wednesday by its British parent, Tesco Plc. Tesco will conduct "a strategic review" of Fresh & Easy, which will probably result in a sale. That will end Tesco's effort to conquer the western United States with small, boutique-like stores.
Fresh & Easy opened five stores in greater Sacramento last spring, the initial step in what was supposed to be a 17-store blitz.
While Fresh & Easy hasn't made a serious dent in greater Sacramento, it's part of a wave of nonunion competition that has threatened to overwhelm Raley's and the region's other traditional supermarket powers in recent years. Competition from the likes of Fresh & Easy was a driving force in the recent 10-day strike at Raley's.
Fresh & Easy's departure doesn't mean the onslaught of new grocers is ending, said Abby Friedman, a research analyst in Sacramento with Cassidy Turley commercial real estate.
She noted that Wal-Mart, the leader of the nonunion pack, opened four new stores in the region this fall. Fresh Market, a North Carolina chain, opened its first California store in October in Roseville. Other chains have arrived as well, including Sprouts.
"It's still happening in this area," Friedman said.
Launched in 2007, Fresh & Easy opened 199 stores in California, Nevada and Arizona. Tesco reportedly invested $1.6 billion on store openings and the construction of a distribution center in Riverside.
"It's kind of indicative of the failure of that small-market concept, that small, specialty-market concept," said Bob Reynolds, a grocery industry consultant in Moraga. "People just didn't respond."
The stores measure about 16,000 square feet, he said. Traditional supermarkets are 50,000 square feet and up.
"The business had many positives, (but) its journey to scale and acceptable returns will take too long relative to other opportunities," Tesco Chief Executive Philip Clarke said in a press release.
© Copyright The Sacramento Bee. All rights reserved.
Read more articles by Dale Kasler
What You Should Know About Comments on Sacbee.com
Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)
Here are some rules of the road:
Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "Report Abuse" link to notify the moderators. Responding to the comment will only encourage bad behavior.
Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.
Do not attack other users; focus your comments on issues, not individuals.
Stay on topic. Only post comments relevant to the article at hand.
Do not copy and paste outside material into the comment box.
Don't repeat the same comment over and over. We heard you the first time.
Do not use the commenting system for advertising. That's spam and it isn't allowed.
Don't use all capital letters. That's akin to yelling and not appreciated by the audience.
Don't flag other users' comments just because you don't agree with their point of view. Please only flag comments that violate these guidelines.
You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "Report Abuse" link to submit those comments for moderator review. You also may notify us via email at firstname.lastname@example.org. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.
If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them.