The Insider - Heard on the Street
Tesco's Fresh & Easy Neighborhood Market began terminating selected store-level employees, mostly but not exclusively regular grocery clerks called Customer Assistants, today at 33 of its 199 grocery markets in California, Nevada and Arizona.
I learned this while visiting a number of Fresh & Easy stores in two states yesterday and today.
I also verified it with a number of store-level Fresh & Easy Neighborhood Market employees, including two who were fired today.
In this July 26, 2012 piece, Fear and Loathing in El Segundo: Mass Firings, Reduction in Store Hours at 33 Fresh & Easy Stores ... and More, I reported exclusively that Fresh & Easy Neighborhood Market planned to reduce the operating hours at 33 of its stores from the retailer's normal 8 a.m.-10 p.m. hours to 9 a.m-8 pm, beginning soon.
That day is here: I also learned during my store visits yesterday and today that the reduced hours at the 33 stores are effective today. Instead of the previous 8 a.m.-10 p.m. operating hours, the doors to these 33 Fresh & Easy markets now officially open at 9 a.m, and close at 8 a.m.
I'm not aware of one grocery chain (read competitor to Tesco's Fresh & Easy) in California, Nevada and Arizona. In fact, many stores operated by the leading chains in the three states, such as Safeway, Kroger Co., Supervalu, Save Mart, Albertson's LLC, Stater Bros. and others, keep many of their respective stores open 24-hours. The stores not open 24-hours close generally at 11 p.m or midnight and open at 7 a.m.
Grocery stores that are doing well don't close at 8 p.m., unless they're doing so well that opening them any later would prove to be an embarrassment of riches to a modest grocery retailer. And grocers who want their stores to do well don't close them at 8 p.m.
Additionally, for those not experienced in the food and grocery retailing business, if a grocer decides to close a bunch of stores, like 33 of its 199 units, at 8 p.m. rather than the previous 10 p.m., you can take it to the bank the company CEO has very little if any faith in the future potential of those stores. If that's not the case, then he just doesn't understand the grocery business.
The selected store-level layoffs are a part of the reduction in hours program at the 33 Fresh & Easy stores.
Since the stores are opening one hour later and closing two hours earlier, less employees are needed.
Some of the workers at the affected stores are getting transfers to other Fresh & Easy markets.
Other employees at the 33 stores are getting their hours cut, in many cases down to 20 hours a week, which is the minimum they are required to work in order for the grocery chain to pay the 70-75% employer contribution for the workers health insurance policies.
Over the last five years of its operation (the first stores opened in November 2007) most Fresh & Easy Customer Assistants, who are hired part time and guaranteed 20 hours a week at the time of hire, have worked more than the minimum guaranteed hours at the request of either store management or themselves. Few employees have worked just 20 hours a week over the last five years Fresh &Easy has been in operation.
Cost-cutting strategy
The reduction in store operating hours and related reduction in store employee hours, along with the layoffs of the Customer Assistants and others I'm telling readers about today, is all about reducing labor and related costs for Tesco's Fresh & Easy.
The store-level cuts go hand-in-hand with the termination of about 50 employees in one day at Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, California, which I wrote about here on July 26.
Battles and wars
The cost-cutting comes now, in my analysis and opinion, because Tesco's fiscal half-year ends in about a month. Tesco must show its making at least a minimum reduction in its losses, $245 million for the most-recently-ended fiscal year (ended February 2012), when it reports its fiscal half-year results this fall.
Prior to making the cuts at its corporate headquarters in late July and the store-reductions I'm describing in this piece, Fresh & Easy Neighborhood Market was not on track to show any significant improvement in its half-year performance over the previous half-year, based on my reporting and analysis.
Since the cuts come so near the end of the half-year, I don't expect Tesco to report a major reduction in losses for the half-year in relation to the $245 million it lost in its most-recently ended fiscal year. It will be interesting to see - and more cuts are coming - what Tesco does report as a loss for Fresh & Easy for the half-year.
Breaking even with Fresh & Easy, which Tesco says it will do so by the end of its 2014 fiscal year, which is less than two years away, is only part of the story for Tesco - it's the battle but not the war. And it's the war that truly matters. Despite winning many battles a war can still be lost.
For Tesco, continuing my battle vs. war analogy, the war boils down to this question: Does Fresh & Easy have a future as a viable and profitable grocery chain?
That's a question I will be addressing in one of my next columns.
-The Insider
[Editor's Note: 'The Insider' isn't a literal or descriptiive title for our columnist. Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Rabu, 08 Agustus 2012
Rabu, 01 Agustus 2012
Fresh & Easy Developing Smaller Version of its 3K Square-Foot 'Fresh & Easy Express' Format Stores
Breaking Buzz & Analysis
Tesco-owned Fresh & Easy Neighborhood Market is currently developing a 2,000 square-foot version of its 3,000 square-foot 'Fresh & Easy Express' convenience-oriented food and grocery market, according to multiple sources familiar with the project.
Fresh & Easy is constructing a prototype of the 2,000 square-foot store inside a space it controls near the 10,000 square-foot Fresh & Easy Neighborhood Market unit in Los Angeles' Eagle Rock Neighborhood.
El Segundo, California-based Fresh & Easy Neighborhood Market used that very same space to build a mock-up of its 3,000 square-foot 'Express' format stores, of which their are currently about 10 units, all in Southern California.
The new 2,000 square-foot market, called an F2 in Fresh & Easy speak - the 10,000 square-foot stores for example are referred to internally at Fresh & Easy as F10's, the 3,000 square-foot stores F3's, and the handful of 7,000 square-foot markets the grocer operates are F7's - is basically a scaled-down version of the 3,000 square-foot stores, according to sources who are familiar with the project.
For example, current plans call for smaller refrigerated, frozen food and produce cases than in the 3,000 square-foot stores as a way to compensate for the reduced square footage, according to our sources. Some types of cases and shelving also could be eliminated for the same reason, our sources say.
Neither Tesco or its Fresh & Easy Neighborhood Market chain have announced the development of the 2,000 square-foot stores. This is the first time Tesco's plans for a smaller version of the 3,000 square-foot 'Fresh & Easy Express' store is being reported.
Analysis
The first question any food and grocery retailing analyst or grocer worth his or her salt should ask upon reading this report is: 'Why a 2,000 square-foot version of what already at 3,000 square feet is a very small-format grocery market.?
The answer to that question, according to our sources (and to our reporting and analysis of Tesco and its Fresh & Easy chain for five years on) - and it's what we said was the primary driving force behind the 3,000 square-foot 'Express' format in our stories about the stores last year - is that Tesco's Fresh & Easy is searching for ways to reduce its new store development and opening capital cost while still growing its store count.
Since launching its California-based small-format fresh food and grocery chain in 2007, Tesco has always said it will break even financially with Fresh & Easy - which lost about $245 million in its most recent fiscal year and has lost about $1.5 billion over its five year history - by achieving scale, which means opening numerous stores over a short period of time.
For example, from 2006 to 2010 Tesco said it still planned to have at least 500 stores in four-to-five years, on its way to 1,000 stores over an about six or seven year period, which would be 2013-end-to-2014. It said this despite the fact it's paused opening new stores for many months at least three times in Fresh & Easy's five year history. The most recent period being at present.
But in 2011, not long after he took over as CEO of Tesco in March of last year, Philip Clarke said the United Kingdom-based retailer planned to open just 400 Fresh & Easy stores, which would allow Tesco to break even with its U.S. grocery chain by the end of its 2013 fiscal year, which ends February 2013.
Not many months later Clarke and Tesco changed those plans, saying instead of the 400 Fresh & Easy units needed to break even by the end of fiscal 2013, it had figured out a way to do so with just 300 stores.
But then earlier this year Clarke and Tesco pushed back Fresh & Easy's break-even time to the end of its 2014 fiscal year, at which time the retailer says it will then break even with Fresh & Easy Neighborhood Market. Tesco kept - so far - the 300 store number as the number of Fresh & Easy units needed to break even by the end of the 2014 fiscal year.
There are 199 Fresh & Easy stores in California, Nevada and Arizona.
Tesco's 2014 fiscal year-end is about two years away. That means it will have to build and open 101 stores between now and then to reach 300 units, which Clarke and company say is needed to break even at that time.
But Tesco has essentially stopped opening Fresh & Easy stores, with the exception of one or two here or there.
Instead, the retailer has embarked on a cost-cutting campaign of limited sorts with Fresh & Easy, which begs another key question any industry analyst or grocer should ask: "How can Tesco open 101 stores in two years - which is half as many as it's opened over the last five years - when beginning a couple months ago it essentially stopped opening new Fresh & Easy stores?
In fact, even if Tesco were opening Fresh & Easy stores at its high-point-pace, it would be near physically and logistically impossible, and not very smart, to open 101 stores in two years, particularly considering the continued poor performance of the California-based grocery chain and its need to reduce costs and raise margin at it to even come close to breaking even with Fresh & Easy
The answer to the question, as it pertains to the micro small-format store prototype being developed, isn't that Tesco is going to open 101 2,000 square-foot grocery markets - the format in development. For example, it's opened just 10 or so of the 3,000 square-foot Fresh & Easy Express stores in the year or so since the first unit was opened.
There are numerous reasons why they won't do so but here's a simple reason why if they do it won't help: The best 10,000 square-foot Fresh & Easy stores do about $150,000 in average weekly sales, and there aren't many of those units. That would mean the best of the 2,000 square-foot stores would do - at best - about 40,000 in weekly sales. If scale, as in growing sales by growing store-count, matters, 101 2,000 square-foot stores, even if they all were stellar performers, which they won't be, doesn't add up to a whole lot of annual sales when one looks at the big picture.
But hopes and dreams of reduced capital costs without considering the fundamental question - can 2,000 square-foot grocery stores operated the way Fresh & Easy operates them make any money - it appears spring eternal at Fresh & Easy Neighborhood Market.
Therefore, the Tesco-owned chain is developing a smaller version of its 3,000 square-foot 'Express' store, shaving 1,000 square feet off the store size.
Perhaps Tesco hopes it can "shrink" (in terms of store size) rather than grow (recall those days of a 1,000-store chain) its way to break-even with Fresh & Easy.
But size does matter. And a 2,000 square-foot grocery market, like all small formats - including 3,000 and 10,000 square-foot grocery stores - are fraught with problems when it comes to making money. Just ask Walmart - the now folded 'marketside by Walmart' stores and its fledgling small-format Walmart Express, which despite being 15,000 square-feet is having economic struggles endemic to many small-format grocery stores, particularly those run by chains without a history of operating such stores.
Or ask Safeway CEO Steve Burd, who put an end to the California-based supermarket chain's 'The Market' format (10,000-14,000 square-foot grocery markets ) after just two test units has been opened and operated for about one-year each. Both stores, in Long Beach and San Jose, California, remain open but Burd killed further development of the format over two years ago.
According to our sources, at present there isn't a set date for when - or if - the first 2,000 square-foot Fresh & Easy store will open. However, our sources say, Fresh & Easy already has a number of locations for the stores scouted out, although much of the grocer's real estate team was fired last Wednesday, which is an important indication of the future of Fresh & Easy Neighborhood Market's new store development plans.
Those plans: Little to nothing going forward for the rest of this year in terms of acquiring new store sites - there are already dozens of Fresh & Easy sites that have been sitting fallow for as long as four-to-five years - and opening new Fresh & Easy stores.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Tesco-owned Fresh & Easy Neighborhood Market is currently developing a 2,000 square-foot version of its 3,000 square-foot 'Fresh & Easy Express' convenience-oriented food and grocery market, according to multiple sources familiar with the project.
Fresh & Easy is constructing a prototype of the 2,000 square-foot store inside a space it controls near the 10,000 square-foot Fresh & Easy Neighborhood Market unit in Los Angeles' Eagle Rock Neighborhood.
El Segundo, California-based Fresh & Easy Neighborhood Market used that very same space to build a mock-up of its 3,000 square-foot 'Express' format stores, of which their are currently about 10 units, all in Southern California.
The new 2,000 square-foot market, called an F2 in Fresh & Easy speak - the 10,000 square-foot stores for example are referred to internally at Fresh & Easy as F10's, the 3,000 square-foot stores F3's, and the handful of 7,000 square-foot markets the grocer operates are F7's - is basically a scaled-down version of the 3,000 square-foot stores, according to sources who are familiar with the project.
For example, current plans call for smaller refrigerated, frozen food and produce cases than in the 3,000 square-foot stores as a way to compensate for the reduced square footage, according to our sources. Some types of cases and shelving also could be eliminated for the same reason, our sources say.
Neither Tesco or its Fresh & Easy Neighborhood Market chain have announced the development of the 2,000 square-foot stores. This is the first time Tesco's plans for a smaller version of the 3,000 square-foot 'Fresh & Easy Express' store is being reported.
Analysis
The first question any food and grocery retailing analyst or grocer worth his or her salt should ask upon reading this report is: 'Why a 2,000 square-foot version of what already at 3,000 square feet is a very small-format grocery market.?
The answer to that question, according to our sources (and to our reporting and analysis of Tesco and its Fresh & Easy chain for five years on) - and it's what we said was the primary driving force behind the 3,000 square-foot 'Express' format in our stories about the stores last year - is that Tesco's Fresh & Easy is searching for ways to reduce its new store development and opening capital cost while still growing its store count.
Since launching its California-based small-format fresh food and grocery chain in 2007, Tesco has always said it will break even financially with Fresh & Easy - which lost about $245 million in its most recent fiscal year and has lost about $1.5 billion over its five year history - by achieving scale, which means opening numerous stores over a short period of time.
For example, from 2006 to 2010 Tesco said it still planned to have at least 500 stores in four-to-five years, on its way to 1,000 stores over an about six or seven year period, which would be 2013-end-to-2014. It said this despite the fact it's paused opening new stores for many months at least three times in Fresh & Easy's five year history. The most recent period being at present.
But in 2011, not long after he took over as CEO of Tesco in March of last year, Philip Clarke said the United Kingdom-based retailer planned to open just 400 Fresh & Easy stores, which would allow Tesco to break even with its U.S. grocery chain by the end of its 2013 fiscal year, which ends February 2013.
Not many months later Clarke and Tesco changed those plans, saying instead of the 400 Fresh & Easy units needed to break even by the end of fiscal 2013, it had figured out a way to do so with just 300 stores.
But then earlier this year Clarke and Tesco pushed back Fresh & Easy's break-even time to the end of its 2014 fiscal year, at which time the retailer says it will then break even with Fresh & Easy Neighborhood Market. Tesco kept - so far - the 300 store number as the number of Fresh & Easy units needed to break even by the end of the 2014 fiscal year.
There are 199 Fresh & Easy stores in California, Nevada and Arizona.
Tesco's 2014 fiscal year-end is about two years away. That means it will have to build and open 101 stores between now and then to reach 300 units, which Clarke and company say is needed to break even at that time.
But Tesco has essentially stopped opening Fresh & Easy stores, with the exception of one or two here or there.
Instead, the retailer has embarked on a cost-cutting campaign of limited sorts with Fresh & Easy, which begs another key question any industry analyst or grocer should ask: "How can Tesco open 101 stores in two years - which is half as many as it's opened over the last five years - when beginning a couple months ago it essentially stopped opening new Fresh & Easy stores?
In fact, even if Tesco were opening Fresh & Easy stores at its high-point-pace, it would be near physically and logistically impossible, and not very smart, to open 101 stores in two years, particularly considering the continued poor performance of the California-based grocery chain and its need to reduce costs and raise margin at it to even come close to breaking even with Fresh & Easy
The answer to the question, as it pertains to the micro small-format store prototype being developed, isn't that Tesco is going to open 101 2,000 square-foot grocery markets - the format in development. For example, it's opened just 10 or so of the 3,000 square-foot Fresh & Easy Express stores in the year or so since the first unit was opened.
There are numerous reasons why they won't do so but here's a simple reason why if they do it won't help: The best 10,000 square-foot Fresh & Easy stores do about $150,000 in average weekly sales, and there aren't many of those units. That would mean the best of the 2,000 square-foot stores would do - at best - about 40,000 in weekly sales. If scale, as in growing sales by growing store-count, matters, 101 2,000 square-foot stores, even if they all were stellar performers, which they won't be, doesn't add up to a whole lot of annual sales when one looks at the big picture.
But hopes and dreams of reduced capital costs without considering the fundamental question - can 2,000 square-foot grocery stores operated the way Fresh & Easy operates them make any money - it appears spring eternal at Fresh & Easy Neighborhood Market.
Therefore, the Tesco-owned chain is developing a smaller version of its 3,000 square-foot 'Express' store, shaving 1,000 square feet off the store size.
Perhaps Tesco hopes it can "shrink" (in terms of store size) rather than grow (recall those days of a 1,000-store chain) its way to break-even with Fresh & Easy.
But size does matter. And a 2,000 square-foot grocery market, like all small formats - including 3,000 and 10,000 square-foot grocery stores - are fraught with problems when it comes to making money. Just ask Walmart - the now folded 'marketside by Walmart' stores and its fledgling small-format Walmart Express, which despite being 15,000 square-feet is having economic struggles endemic to many small-format grocery stores, particularly those run by chains without a history of operating such stores.
Or ask Safeway CEO Steve Burd, who put an end to the California-based supermarket chain's 'The Market' format (10,000-14,000 square-foot grocery markets ) after just two test units has been opened and operated for about one-year each. Both stores, in Long Beach and San Jose, California, remain open but Burd killed further development of the format over two years ago.
According to our sources, at present there isn't a set date for when - or if - the first 2,000 square-foot Fresh & Easy store will open. However, our sources say, Fresh & Easy already has a number of locations for the stores scouted out, although much of the grocer's real estate team was fired last Wednesday, which is an important indication of the future of Fresh & Easy Neighborhood Market's new store development plans.
Those plans: Little to nothing going forward for the rest of this year in terms of acquiring new store sites - there are already dozens of Fresh & Easy sites that have been sitting fallow for as long as four-to-five years - and opening new Fresh & Easy stores.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Sabtu, 28 Juli 2012
Fresh & Easy Neighborhood Market Planning Major Renovations at Two California Stores
Companion Story: Fresh & Easy Neighborhood Market Plans to Test Full-Service Checkout at Two Stores in California
Breaking Buzz & Analysis
Tesco's Fresh & Easy Neighborhood Market is planning to make major renovations at two of its stores in California, Fresh & Easy Buzz has learned.
The two stores are at Main Street and Raymond Avenue in the Southern California city of Alhambra, and at Lincoln and Sterling in Lincoln, California, which is near Sacramento in Northern California.
The key element of the renovation and retrofit project will be the addition of full-service checkout lanes in both stores, as we reported in this related story.
Fresh & Easy will keep the self-service checkouts currently in the stores, but plans to add the full-service checkout lanes as an option for customers, which is something we've been saying for five years the Tesco-owned grocery chain needs to do in all its stores.
In addition to adding the full-service checkouts, Fresh & Easy plans a major renovation and realignment of the produce departments in the two grocery stores, adding new display fixtures, which will be wood, along with reusing some of the existing fixtures as part of the produce redo.
Renovation plans also call for adding a coffee bar in the front of both stores.
There will be a few other changes made in the stores as part of the project. But the addition of the full-service checkstands, the complete produce department redo, and the new coffee bar are the key elements of the planned project.
The renovation project might pose some problems for Fresh & Easy Neighborhood Market though, according to one of our sources who's very familiar with the project and the plans, because one of the 50 corporate headquarters employees fired last Wednesday was James Smith, who as a director headed up Fresh & Easy's construction efforts.
Smith, who worked for Fresh & Easy for nearly six years until being dismissed Wednesday (he was among the first employees at the chain in 2007), is the only person who to date has managed retrofits like those planned at the stores in Alhambra and Lincoln for Fresh & Easy Neighborhood Market, according to our sources.
Our sources say Fresh & Easy still plans to go forward with the project, however, despite no longer having Smith on board.
A source familiar with the project and plans says it's going to be very difficult to pull the project off in the August time-frame, not only because of Smith's departure, but also because the only architect who's ever done such a major retrofit for Fresh & Easy, Rick Redpath, is no longer employed at the firm, Nadel Architects, heading up the project for the grocer.
We've also learned from another source that Fresh & Easy is using a new general contractor for this project instead of LPS, the contractor it's used in the past for similar retrofits.
"Basically, it's an entirely new team, good luck with that," says one of our sources, commenting on the difficulties that can arise when a completely new construction team handles retrofits like the ones planned for the Fresh & Easy markets in Alhambra and Lincoln.
On the other hand, "often new teams, out to prove their worth, can get the job done," another of our sources familiar with the renovation project says. He adds though that "with all that's going on at Fresh & Easy," where he worked for about five years but isn't one of the employees let go on Wednesday," it's hard to understand why they are doing these renovations now." It's basically too late, in my opinion," he says.
For us here at Fresh & Easy Buzz, the key element of the retrofits is the addition of the full-service checkout lanes in the two California stores, as we detailed in our companion story here.
If Fresh & Easy keeps to its plans, the renovations are set to begin in just a bit over two weeks, August 16, and set to be completed by the end of August. We'll be watching closely.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Breaking Buzz & Analysis
Tesco's Fresh & Easy Neighborhood Market is planning to make major renovations at two of its stores in California, Fresh & Easy Buzz has learned.
The two stores are at Main Street and Raymond Avenue in the Southern California city of Alhambra, and at Lincoln and Sterling in Lincoln, California, which is near Sacramento in Northern California.
The key element of the renovation and retrofit project will be the addition of full-service checkout lanes in both stores, as we reported in this related story.
Fresh & Easy will keep the self-service checkouts currently in the stores, but plans to add the full-service checkout lanes as an option for customers, which is something we've been saying for five years the Tesco-owned grocery chain needs to do in all its stores.
In addition to adding the full-service checkouts, Fresh & Easy plans a major renovation and realignment of the produce departments in the two grocery stores, adding new display fixtures, which will be wood, along with reusing some of the existing fixtures as part of the produce redo.
Renovation plans also call for adding a coffee bar in the front of both stores.
There will be a few other changes made in the stores as part of the project. But the addition of the full-service checkstands, the complete produce department redo, and the new coffee bar are the key elements of the planned project.
The renovation project might pose some problems for Fresh & Easy Neighborhood Market though, according to one of our sources who's very familiar with the project and the plans, because one of the 50 corporate headquarters employees fired last Wednesday was James Smith, who as a director headed up Fresh & Easy's construction efforts.
Smith, who worked for Fresh & Easy for nearly six years until being dismissed Wednesday (he was among the first employees at the chain in 2007), is the only person who to date has managed retrofits like those planned at the stores in Alhambra and Lincoln for Fresh & Easy Neighborhood Market, according to our sources.
Our sources say Fresh & Easy still plans to go forward with the project, however, despite no longer having Smith on board.
A source familiar with the project and plans says it's going to be very difficult to pull the project off in the August time-frame, not only because of Smith's departure, but also because the only architect who's ever done such a major retrofit for Fresh & Easy, Rick Redpath, is no longer employed at the firm, Nadel Architects, heading up the project for the grocer.
We've also learned from another source that Fresh & Easy is using a new general contractor for this project instead of LPS, the contractor it's used in the past for similar retrofits.
"Basically, it's an entirely new team, good luck with that," says one of our sources, commenting on the difficulties that can arise when a completely new construction team handles retrofits like the ones planned for the Fresh & Easy markets in Alhambra and Lincoln.
On the other hand, "often new teams, out to prove their worth, can get the job done," another of our sources familiar with the renovation project says. He adds though that "with all that's going on at Fresh & Easy," where he worked for about five years but isn't one of the employees let go on Wednesday," it's hard to understand why they are doing these renovations now." It's basically too late, in my opinion," he says.
For us here at Fresh & Easy Buzz, the key element of the retrofits is the addition of the full-service checkout lanes in the two California stores, as we detailed in our companion story here.
If Fresh & Easy keeps to its plans, the renovations are set to begin in just a bit over two weeks, August 16, and set to be completed by the end of August. We'll be watching closely.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Fresh & Easy Neighborhood Market to Test Full-Service Checkout at Two California Stores
Companion Story: Fresh & Easy Neighborhood Market Planning Major Renovations at Two California Stores
Breaking Buzz & Analysis
Tesco's Fresh & Easy Neighborhood Market plans to begin testing full-service checkout lanes in two California stores beginning, if all goes as planned, by the end of August, Fresh & Easy Buzz has learned.
The full-service checkout tests will be at the Fresh & Easy store at Main Street and Raymond Avenue in the Southern California city of Alhambra, and at the Lincoln and Sterling unit in Lincoln, which is near Sacramento in Northern California, according to information we have from multiple sources in positions to know about the plans.
The two test stores will continue to offer self-service checkout. The full-service checkout lanes will be offered in the test as an option to customers.
The full-service checkouts are part of a retrofit project Fresh & Easy is doing at the two stores. See our companion story here.
According to our sources, Fresh & Easy's senior management hasn't yet put a time period on the test in terms of if and when they will decide to roll the full-service option out to additional units. There are currently 199 Fresh & Easy grocery markets in California, Nevada and Arizona.
The decision to test full-service checkout at the two Fresh & Easy markets - an interesting one because since 2007 when the first stores opened the grocery chain's CEO, Tim Mason, along with its corporate spokesperson, have said publicly Tesco and Fresh & Easy Neighborhood Market are fully committed to the self-service checkout system, essentially saying it's a winner - was quarterbacked by new retail operations chief Tim Ashdown.
We broke the news about Ashdown's coming on board at Fresh & Easy in this May 2, 2012 story. Before joing Fresh & Easy Neighborhood Market a couple months ago he was CEO of Tesco's operations in China.
Since joining Fresh & Easy, Ashdown has been been a busy guy. For example, he was responsible for deciding to fire 50 employees at Fresh & Easy's corporate headquarters on Wednesday of this week, as one way of many to attempt to reduce the losses at the Tesco-owned grocery chain. [See the piece by our 'The Insider' columnist here.]
According to our sources, CEO Tim Mason approved Ashdown's decision. Mason and Ashdown then left it up to the various Fresh & Easy line managers to decide which specific people to let go, although the line managers were given guidelines, the chief one being that a certain financial target needed to be reached, which meant many of the employees fired were at director level; the highest paid staffers after top-level management.
For nearly five years we've been saying in Fresh & Easy Buzz that one of Tesco's major fumbles from day one with its Fresh & Easy Neighborhood Market chain is that it offers only self-service checkout in its fresh food and grocery markets in California, Nevada and Arizona.
In fact, we've done far more than say so -- we've offered historical analysis on why offering self-service checkout only is folly, along with offering proactive suggestions on why Fresh & Easy is missing the boat by not offering both full and self-service checkout.
We've also offered a variety of examples in various stories about why not offering both full and self-service checkout is a major point of competitive disadvantage for Tesco's Fresh & Easy.
A few of those examples include the inability to accept paper checks and WIC vouchers at the stores, along with the plain and simple fact that, based on nearly 40 years' experience in the U.S. food and grocery industry, which has included doing studies on shopper preferences for full or self-service checkout (including in California), the empirical evidence simply is that by offering self-service checkout only, Fresh & Easy limits its potential universe of customers because the majority of grocery shoppers in the U.S. just don't want to scan and bag their own groceries, particularly when they can go to numerous stores that offer groceries at the same prices, and even for less, than Fresh & Easy does, full-service checkout and bagging included at no extra charge.
In our analysis, testing full-service checkout at only two Fresh & Easy stores makes very little sense because it offers little in the way of a representative sample, although it is less expensive then testing it in five or six stores, which would not only make better sense - two urban stores, two suburban stores and one rural store, for example - but would provide a much better picture in considering whether or not to roll it out chainwide.
Of course from our perspective - and since we've said from day one that offering self-service checkout only is a huge mistake for Tesco - it's a moot point because we would have both self and full-service checkout in all stores without question or hesitation.
The move, in our analysis, really comes too late for Fresh & Easy. The chain basically has a year to show dramatic improvement in terms of reducing its losses. If not, the notion of breaking even by February 2014, which Tesco CEO Philip Clarke says will happen, not only won't be achievable but will essentially be a moot point. The operative point being: Can Fresh & Easy be anything more that a chain that finally stops losing money for Tesco?
In order to grow Fresh & Easy, even if it were to break even by February 2014 (if it's still around), Tesco has to have confidence in investing money in that growth - and it needs the confidence of its investors to continue doing so, considering about $2 billion has already been invested, and around $1.5 billion has been lost in five years. That confidence doesn't currently exist, even, we suggest, when it comes to CEO Philip Clarke, his (infrequent these days when it comes to Fresh & Easy) public prognostications to the contrary.
Meanwhile, five years after launching Fresh & Easy, and five years after we first pointed out why Tesco made a major mistake offering only self-service checkout in its Fresh & Easy stores, the retailer will test full-service checkout at the two stores in California.
No announcement has been made of this test by Tesco or Fresh & Easy. It will be interesting to see how they position it, now that it's being reported on.
California recently passed a law banning the sale of alcoholic beverages at self-service checkouts in the state's grocery and other format stores that offer adult beverages for sale. That law is currently in court, being challenged by the California Grocer's Association, largely because of Fresh & Easy, which is a member, since none of the trade groups other grocer-members offer self-service checkout only in their stores. As such, this could be one way Fresh & Easy explains the need for the full-service checkout test at the two stores.
Tesco isn't in any position to tinker around the edges with two-store self-service checkout tests at Fresh & Easy though. If it believes in Fresh & Easy, it should add the full-service checkout options to all the stores post haste.
And that's the central question and proposition: 'Does Tesco believe in Fresh & Easy?' It's a theme we will be returning to in the coming days in our reporting, analysis and commentary.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Breaking Buzz & Analysis
Tesco's Fresh & Easy Neighborhood Market plans to begin testing full-service checkout lanes in two California stores beginning, if all goes as planned, by the end of August, Fresh & Easy Buzz has learned.
The full-service checkout tests will be at the Fresh & Easy store at Main Street and Raymond Avenue in the Southern California city of Alhambra, and at the Lincoln and Sterling unit in Lincoln, which is near Sacramento in Northern California, according to information we have from multiple sources in positions to know about the plans.
The two test stores will continue to offer self-service checkout. The full-service checkout lanes will be offered in the test as an option to customers.
The full-service checkouts are part of a retrofit project Fresh & Easy is doing at the two stores. See our companion story here.
According to our sources, Fresh & Easy's senior management hasn't yet put a time period on the test in terms of if and when they will decide to roll the full-service option out to additional units. There are currently 199 Fresh & Easy grocery markets in California, Nevada and Arizona.
The decision to test full-service checkout at the two Fresh & Easy markets - an interesting one because since 2007 when the first stores opened the grocery chain's CEO, Tim Mason, along with its corporate spokesperson, have said publicly Tesco and Fresh & Easy Neighborhood Market are fully committed to the self-service checkout system, essentially saying it's a winner - was quarterbacked by new retail operations chief Tim Ashdown.
We broke the news about Ashdown's coming on board at Fresh & Easy in this May 2, 2012 story. Before joing Fresh & Easy Neighborhood Market a couple months ago he was CEO of Tesco's operations in China.
Since joining Fresh & Easy, Ashdown has been been a busy guy. For example, he was responsible for deciding to fire 50 employees at Fresh & Easy's corporate headquarters on Wednesday of this week, as one way of many to attempt to reduce the losses at the Tesco-owned grocery chain. [See the piece by our 'The Insider' columnist here.]
According to our sources, CEO Tim Mason approved Ashdown's decision. Mason and Ashdown then left it up to the various Fresh & Easy line managers to decide which specific people to let go, although the line managers were given guidelines, the chief one being that a certain financial target needed to be reached, which meant many of the employees fired were at director level; the highest paid staffers after top-level management.
For nearly five years we've been saying in Fresh & Easy Buzz that one of Tesco's major fumbles from day one with its Fresh & Easy Neighborhood Market chain is that it offers only self-service checkout in its fresh food and grocery markets in California, Nevada and Arizona.
In fact, we've done far more than say so -- we've offered historical analysis on why offering self-service checkout only is folly, along with offering proactive suggestions on why Fresh & Easy is missing the boat by not offering both full and self-service checkout.
We've also offered a variety of examples in various stories about why not offering both full and self-service checkout is a major point of competitive disadvantage for Tesco's Fresh & Easy.
A few of those examples include the inability to accept paper checks and WIC vouchers at the stores, along with the plain and simple fact that, based on nearly 40 years' experience in the U.S. food and grocery industry, which has included doing studies on shopper preferences for full or self-service checkout (including in California), the empirical evidence simply is that by offering self-service checkout only, Fresh & Easy limits its potential universe of customers because the majority of grocery shoppers in the U.S. just don't want to scan and bag their own groceries, particularly when they can go to numerous stores that offer groceries at the same prices, and even for less, than Fresh & Easy does, full-service checkout and bagging included at no extra charge.
In our analysis, testing full-service checkout at only two Fresh & Easy stores makes very little sense because it offers little in the way of a representative sample, although it is less expensive then testing it in five or six stores, which would not only make better sense - two urban stores, two suburban stores and one rural store, for example - but would provide a much better picture in considering whether or not to roll it out chainwide.
Of course from our perspective - and since we've said from day one that offering self-service checkout only is a huge mistake for Tesco - it's a moot point because we would have both self and full-service checkout in all stores without question or hesitation.
The move, in our analysis, really comes too late for Fresh & Easy. The chain basically has a year to show dramatic improvement in terms of reducing its losses. If not, the notion of breaking even by February 2014, which Tesco CEO Philip Clarke says will happen, not only won't be achievable but will essentially be a moot point. The operative point being: Can Fresh & Easy be anything more that a chain that finally stops losing money for Tesco?
In order to grow Fresh & Easy, even if it were to break even by February 2014 (if it's still around), Tesco has to have confidence in investing money in that growth - and it needs the confidence of its investors to continue doing so, considering about $2 billion has already been invested, and around $1.5 billion has been lost in five years. That confidence doesn't currently exist, even, we suggest, when it comes to CEO Philip Clarke, his (infrequent these days when it comes to Fresh & Easy) public prognostications to the contrary.
Meanwhile, five years after launching Fresh & Easy, and five years after we first pointed out why Tesco made a major mistake offering only self-service checkout in its Fresh & Easy stores, the retailer will test full-service checkout at the two stores in California.
No announcement has been made of this test by Tesco or Fresh & Easy. It will be interesting to see how they position it, now that it's being reported on.
California recently passed a law banning the sale of alcoholic beverages at self-service checkouts in the state's grocery and other format stores that offer adult beverages for sale. That law is currently in court, being challenged by the California Grocer's Association, largely because of Fresh & Easy, which is a member, since none of the trade groups other grocer-members offer self-service checkout only in their stores. As such, this could be one way Fresh & Easy explains the need for the full-service checkout test at the two stores.
Tesco isn't in any position to tinker around the edges with two-store self-service checkout tests at Fresh & Easy though. If it believes in Fresh & Easy, it should add the full-service checkout options to all the stores post haste.
And that's the central question and proposition: 'Does Tesco believe in Fresh & Easy?' It's a theme we will be returning to in the coming days in our reporting, analysis and commentary.
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Kamis, 26 Juli 2012
Fear and Loathing in El Segundo: Mass Firings, Reduction in Store Hours at 33 Fresh & Easy Stores ... and More
The Insider - Heard On the Street
Regular followers (and if you aren't one, you should be) of our Fresh & Easy Buzz Twitter Feed are aware that for the last couple months we've been reporting there in real time on numerous interesting developments at Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, California - near-daily closed-door meetings in the offices of the CEO and retail operations chief, and the increasing use of interns to staff various positions, for example.
These developments, and two big ones announced to employees at yesterday's weekly staff meeting, are all about Tesco's struggle to stop the financial bleeding at now five-year-old Fresh & Easy, and its attempt to make good on the promise made by CEO Philip Clarke that the United Kingdom-based retailer will break even with Fresh & Easy Neighborhood Market by February 2014.
Clarke, a Tesco lifer (he started as a teenager stocking shelves) who became CEO of the global retailer in March 2011, said shortly after assuming the corner office from Terry Leahy that Tesco would break even with Fresh & Easy by February 2013. However, he added a year to his promise earlier this year, after Tesco reported a $249 million fiscal year loss at Fresh & Easy, which was a mere $4 million less than it lost on the grocery chain two years prior.
Mass Firings
Yesterday Fresh & Easy issued pink slips to between 40-50 employees at its corporate headquarters in El Segundo. The firings are designed to help Tesco cut its way to break-even with what former CEO Terry Leahy hoped and insisted (he still says it will be a success) would be the global retailer's American dream - Fresh & Easy.
But in the five years since Tesco launched Fresh & Easy it has invested around $2.3 billion and lost about $1.5 billion on the fresh food and grocery chain. The losses continue to the tune of nearly $5 million a week.
Tesco's original plan was to have at least 500-600 Fresh & Easy stores operating by now, on the way to 1,000 units in six to seven years from the November 2007 launch. Five years on there are 199 Fresh & Easy stores in California, Nevada and Arizona.
The firings yesterday were across the board rather than focused primarily on the real estate department as Tesco and Fresh & Easy's public relations representatives told various publications who reported it that way. There is a focus on real estate and construction but employees let go span the departments, from IT and operations to commercial.
Reducing Hours at 33 Stores
In a second attempt at cost-cutting - and this is the first time it's being reported anywhere - Fresh & Easy plans to reduce the store hours at 33 stores beginning soon. At present plans call for opening those stores at 9 a.m. instead of 8 a.m., and closing the poor-performing grocery markets at 8 p.m. instead of 10 p.m. Currently the standard hours for all stores is 8 a.m. (a few units open at 7 a.m.) to 10 p.m.
As part of this move, there will be some store-level firings and reductions in worker-hours at the 33 Fresh & Easy stores. Fresh & Easy Neighborhood Market, which hires all its store-level non-management workers on a part-time basis, has already been reducing hours of store employees chain-wide as part of its cost-reduction program designed to help it stop the bleeding at the fledgling grocery chain.
I'm also told by sources in positions to know such things that Fresh & Easy plans to cut some store-level jobs in existing units (besides the 33 stores) that have workers who came on board from the nearly 30 Fresh & Easy units that have been closed over the last couple years. Fresh & Easy absorbed these employees from the closed stores, which added to its labor costs.
And More
An additional move - what I call tinkering around the edges in terms of cost-cutting - Fresh & Easy also plans to eliminate the "Kitchen Table" food sampling stations in the few stores where they remain. (The grocery chain started a program to eliminate these stations in 2011 and replace them with mobile carts but still has some stores with the fixed food sampling kiosks.) The "Kitchen Table" fixed-kiosks are staffed full-time by an employee, hence their elimination in stores where they remain.
The headquarters firings have been a long time coming. Why? Not because the workers didn't do their jobs but because, as we've been saying regularly for years in the blog, the Fresh & Easy model and business just doesn't, in its present incarnation and management, have the legs to achieve break-even in any other way but by making massive operational expense cuts -- and that's what Tesco has essentially concluded. Fresh & Easy has also from the beginning been overloaded with senior and middle management for a chain its size.
Meanwhile, moral at Fresh & Easy's corporate office in El Segundo is lower than it's ever been, according to numerous employees who work there, despite whatever spin its CEO and public relations staff may put on it. I know of numerous employees there looking for new jobs. Some have even created a saying, "The interns are taking over," reflecting Fresh & Easy's growing use of the college students and recent graduates throughout the headquarters operation.
Moral is down at store-level as well. For example, I know of a group of top managers who, frustrated by Fresh & Easy senior managements inability to improve the chain's performance, have been meeting to talk about whether or not they have a future at the grocery chain.
Here's what one store manager told me today, in fact: "Having talked to many store managers today, the feelings are not good. Most of the talk is around what we should do. Stick it out or get out now? The consensus was it's time to start seriously looking. A few people are hoping to be bought by someone else."
The firings at corporate headquarters and other changes detailed in my piece are just the beginning at Tesco's Fresh & Easy. More cost-cutting is coming, as are other changes.
The cost-cutting is all about Tesco being able to show some progress in terms of reporting less of a loss (than last half year) for the upcoming fiscal half year. If it achieves that, Tesco can tell the many investment firm analysts who follow it, who will then report it to their investor-clients, that progress is being made. CEO Clarke needs this because it's crunch time - he can't remain credible if he were to change the break-even date for Fresh & Easy once again, say to February 2015 instead of February 2014, for example.
But CEO's are supposed to be big picture, policy guys - that vision thing, as former U.S. President George H.W. Bush liked to call it - not bean counters. Therefore, Philip Clarke should be asking himself one central question, which is: 'What is my vision for Fresh & Easy Neighborhood Market in America and how can Tesco achieve it?' But what, in my opinion, Clarke is probably asking himself is this: 'Can I get Fresh & Easy to break-even by February 2014, as I've publicly said I would, and then find a buyer for it?'
-The Insider
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Regular followers (and if you aren't one, you should be) of our Fresh & Easy Buzz Twitter Feed are aware that for the last couple months we've been reporting there in real time on numerous interesting developments at Fresh & Easy Neighborhood Market's corporate headquarters in El Segundo, California - near-daily closed-door meetings in the offices of the CEO and retail operations chief, and the increasing use of interns to staff various positions, for example.
These developments, and two big ones announced to employees at yesterday's weekly staff meeting, are all about Tesco's struggle to stop the financial bleeding at now five-year-old Fresh & Easy, and its attempt to make good on the promise made by CEO Philip Clarke that the United Kingdom-based retailer will break even with Fresh & Easy Neighborhood Market by February 2014.
Clarke, a Tesco lifer (he started as a teenager stocking shelves) who became CEO of the global retailer in March 2011, said shortly after assuming the corner office from Terry Leahy that Tesco would break even with Fresh & Easy by February 2013. However, he added a year to his promise earlier this year, after Tesco reported a $249 million fiscal year loss at Fresh & Easy, which was a mere $4 million less than it lost on the grocery chain two years prior.
Mass Firings
Yesterday Fresh & Easy issued pink slips to between 40-50 employees at its corporate headquarters in El Segundo. The firings are designed to help Tesco cut its way to break-even with what former CEO Terry Leahy hoped and insisted (he still says it will be a success) would be the global retailer's American dream - Fresh & Easy.
But in the five years since Tesco launched Fresh & Easy it has invested around $2.3 billion and lost about $1.5 billion on the fresh food and grocery chain. The losses continue to the tune of nearly $5 million a week.
Tesco's original plan was to have at least 500-600 Fresh & Easy stores operating by now, on the way to 1,000 units in six to seven years from the November 2007 launch. Five years on there are 199 Fresh & Easy stores in California, Nevada and Arizona.
The firings yesterday were across the board rather than focused primarily on the real estate department as Tesco and Fresh & Easy's public relations representatives told various publications who reported it that way. There is a focus on real estate and construction but employees let go span the departments, from IT and operations to commercial.
Reducing Hours at 33 Stores
In a second attempt at cost-cutting - and this is the first time it's being reported anywhere - Fresh & Easy plans to reduce the store hours at 33 stores beginning soon. At present plans call for opening those stores at 9 a.m. instead of 8 a.m., and closing the poor-performing grocery markets at 8 p.m. instead of 10 p.m. Currently the standard hours for all stores is 8 a.m. (a few units open at 7 a.m.) to 10 p.m.
As part of this move, there will be some store-level firings and reductions in worker-hours at the 33 Fresh & Easy stores. Fresh & Easy Neighborhood Market, which hires all its store-level non-management workers on a part-time basis, has already been reducing hours of store employees chain-wide as part of its cost-reduction program designed to help it stop the bleeding at the fledgling grocery chain.
I'm also told by sources in positions to know such things that Fresh & Easy plans to cut some store-level jobs in existing units (besides the 33 stores) that have workers who came on board from the nearly 30 Fresh & Easy units that have been closed over the last couple years. Fresh & Easy absorbed these employees from the closed stores, which added to its labor costs.
And More
An additional move - what I call tinkering around the edges in terms of cost-cutting - Fresh & Easy also plans to eliminate the "Kitchen Table" food sampling stations in the few stores where they remain. (The grocery chain started a program to eliminate these stations in 2011 and replace them with mobile carts but still has some stores with the fixed food sampling kiosks.) The "Kitchen Table" fixed-kiosks are staffed full-time by an employee, hence their elimination in stores where they remain.
The headquarters firings have been a long time coming. Why? Not because the workers didn't do their jobs but because, as we've been saying regularly for years in the blog, the Fresh & Easy model and business just doesn't, in its present incarnation and management, have the legs to achieve break-even in any other way but by making massive operational expense cuts -- and that's what Tesco has essentially concluded. Fresh & Easy has also from the beginning been overloaded with senior and middle management for a chain its size.
Meanwhile, moral at Fresh & Easy's corporate office in El Segundo is lower than it's ever been, according to numerous employees who work there, despite whatever spin its CEO and public relations staff may put on it. I know of numerous employees there looking for new jobs. Some have even created a saying, "The interns are taking over," reflecting Fresh & Easy's growing use of the college students and recent graduates throughout the headquarters operation.
Moral is down at store-level as well. For example, I know of a group of top managers who, frustrated by Fresh & Easy senior managements inability to improve the chain's performance, have been meeting to talk about whether or not they have a future at the grocery chain.
Here's what one store manager told me today, in fact: "Having talked to many store managers today, the feelings are not good. Most of the talk is around what we should do. Stick it out or get out now? The consensus was it's time to start seriously looking. A few people are hoping to be bought by someone else."
The firings at corporate headquarters and other changes detailed in my piece are just the beginning at Tesco's Fresh & Easy. More cost-cutting is coming, as are other changes.
The cost-cutting is all about Tesco being able to show some progress in terms of reporting less of a loss (than last half year) for the upcoming fiscal half year. If it achieves that, Tesco can tell the many investment firm analysts who follow it, who will then report it to their investor-clients, that progress is being made. CEO Clarke needs this because it's crunch time - he can't remain credible if he were to change the break-even date for Fresh & Easy once again, say to February 2015 instead of February 2014, for example.
But CEO's are supposed to be big picture, policy guys - that vision thing, as former U.S. President George H.W. Bush liked to call it - not bean counters. Therefore, Philip Clarke should be asking himself one central question, which is: 'What is my vision for Fresh & Easy Neighborhood Market in America and how can Tesco achieve it?' But what, in my opinion, Clarke is probably asking himself is this: 'Can I get Fresh & Easy to break-even by February 2014, as I've publicly said I would, and then find a buyer for it?'
-The Insider
[Editor's Note: Fresh & Easy Buzz is an independent Blog, and is not affiliated with Tesco, Tesco's Fresh & Easy Neighborhood Market, or any of its competitors. No member of the Fresh & Easy Buzz editorial team has ever or currently works for Tesco or its Fresh & Easy Neighborhood Market chain.]
Senin, 04 Juni 2012
West Coast Bound - Aldi USA Headed to Southern California; First Stores to Open in 2013
Discount grocery chain Aldi USA is headed to Southern California in a big way -- and soon.
The hard-discount grocer, which is headquartered in Germany and has its U.S. corporate office in Illinois, will set up shop in Southern California in the coming months, with plans to open its first stores in the region in nine months to a year, Fresh & Easy Buzz has learned.
Aldi plans to open about 100 stores on the west coast during its first two years (starting in 2013) of operation, according to our sources who are familiar with the grocery chain's plans.
Aldi also has longer-term plans in the west, following those first stores in Southern California, to eventually open its small-format (about 10,000 square-foot) grocery markets throughout California and in other nearby western states, including Nevada, Arizona and others, according to our sources.
Aldi USA currently plans to build and open a distribution center in Riverside County, California, where Tesco has its 850,000 square-foot facility for its 190-plus-store Fresh & Easy Neighborhood Market chain, to serve its stores in Southern California and elsewhere on the west coast. Construction of the distribution facility is set to begin soon, according to our sources.
As part of its plans to open its first stores in Southern California in nine months to one year, Aldi USA is currently looking for a buying director and buying manager, both of which will be based in the region.
Aldi representatives are interviewing candidates for the positions tomorrow and Wednesday in Southern California. Once hired, the buying managers will move to Chicago for an eight month training period, where they will be trained at Aldi's corporate office and in its stores in the region. They, along with numerous other regional employees, will then be based in Aldi's west coast offices in Southern California.
The buyer manager candidates being interviewed this week have been selected for Aldi by an executive search firm, Reaction Search International.
In addition to the key buying/merchandising positions, Aldi USA will soon be hiring for other positions for Southern California and the west coast, ranging from other corporate headquarters functions to the planned distribution center in Riverside, and for the stores.
The arrival of Aldi in Southern California will be a major game-changer in the region, as has been the case in each market the discount grocer has entered in the U.S., which includes the Midwest, South, Mid-Atlantic, eastern and Southwest (Texas) regions in the U.S. Aldi currently has about 1,300 stores in the U.S.
Aldi, which is privately-held and keeps such developments very close to the vest, has not announced its upcoming plans for Southern California and the west coast, not is it confirming our report. But our information comes from multiple sources, all in positions to know the details reported on in this piece.
More to come...
The hard-discount grocer, which is headquartered in Germany and has its U.S. corporate office in Illinois, will set up shop in Southern California in the coming months, with plans to open its first stores in the region in nine months to a year, Fresh & Easy Buzz has learned.
Aldi plans to open about 100 stores on the west coast during its first two years (starting in 2013) of operation, according to our sources who are familiar with the grocery chain's plans.
Aldi also has longer-term plans in the west, following those first stores in Southern California, to eventually open its small-format (about 10,000 square-foot) grocery markets throughout California and in other nearby western states, including Nevada, Arizona and others, according to our sources.
Aldi USA currently plans to build and open a distribution center in Riverside County, California, where Tesco has its 850,000 square-foot facility for its 190-plus-store Fresh & Easy Neighborhood Market chain, to serve its stores in Southern California and elsewhere on the west coast. Construction of the distribution facility is set to begin soon, according to our sources.
As part of its plans to open its first stores in Southern California in nine months to one year, Aldi USA is currently looking for a buying director and buying manager, both of which will be based in the region.
Aldi representatives are interviewing candidates for the positions tomorrow and Wednesday in Southern California. Once hired, the buying managers will move to Chicago for an eight month training period, where they will be trained at Aldi's corporate office and in its stores in the region. They, along with numerous other regional employees, will then be based in Aldi's west coast offices in Southern California.
The buyer manager candidates being interviewed this week have been selected for Aldi by an executive search firm, Reaction Search International.
In addition to the key buying/merchandising positions, Aldi USA will soon be hiring for other positions for Southern California and the west coast, ranging from other corporate headquarters functions to the planned distribution center in Riverside, and for the stores.
The arrival of Aldi in Southern California will be a major game-changer in the region, as has been the case in each market the discount grocer has entered in the U.S., which includes the Midwest, South, Mid-Atlantic, eastern and Southwest (Texas) regions in the U.S. Aldi currently has about 1,300 stores in the U.S.
Aldi, which is privately-held and keeps such developments very close to the vest, has not announced its upcoming plans for Southern California and the west coast, not is it confirming our report. But our information comes from multiple sources, all in positions to know the details reported on in this piece.
More to come...
Kamis, 03 Mei 2012
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