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Tesco's Fresh & Easy: Have Wal-Mart, Costco, Met Their Match?

Wednesday, 7 Nov 2007 | 1:36 PM ET
Tesco
CNBC.com
Tesco

Tesco is an awful name for a company that sells food, don’t you think? Makes me think of Texaco, or Test-co, or something else that starts with “test” which I won’t mention here. Perhaps that’s one reason why you won’t see the name Tesco anywhere on the UK grocery giant’s long-awaited, very expensive entry into the U.S. market.

Tesco’s U.S. stores are called, “Fresh & Easy,” which sounds… fresh… and easy (also could be a great name for an online dating site).

Tesco has spent three years investigating how Americans shop and came up with a store concept it thinks solves the most unique dilemma it found here: we tend to shop at several stores to buy groceries because we can’t find everything we want in one place. Fresh & Easy hopes to be that one place.

In learning all this, the British research team--aware of the cutthroat nature of the U.S. grocery business--worked in a very James Bond-like fashion going store to store. No credit cards were used, everything was bought using bags of cash! They sometimes posed as Hollywood producers, or cafe owners. The whole thing smacked of a spy novel, or maybe more like NASA observing Martians. But after all that, the first six of 122 stores are opening Thursday, and I got an exclusive sneak peak inside.

So here’s what a Fresh & Easy store is like. It’s about the size of a Walgreen’s, small for a grocery store. It has an upbeat, lemon-lime paint scheme, but the layout is very simple and straightforward. Everything is pre-packaged and displayed on easy grab-and-go shelves. The food is very fresh, with few additives (watch out, Whole Foods), and it is all very reasonably priced.

Tesco Opens in U.S.
The British are coming to aisle three, reports CNBC's Jane Wells

Here’s what intrigues me about the layout. The stuff you most likely would want to grab quickly is right near the front—what a concept! These are items like produce or milk or prepared meals for the microwave. This is very different from your average supermarket, where you have to go all the way to the back to get milk so that you are forced to look at all kinds of tempting products along the way.

However, the overall Fresh & Easy store vibe is…plain. Which isn’t a bad thing, just different for those of us conditioned to viewing shopping as "an experience"--the flat-screen TV’s greeting us at Costco, the eye candy at Whole Foods (which I call “Grocery Disneyland”). Fresh & Easy screams “get your stuff quickly and go, because you’re a busy person!” Which I am!

Whether Americans will dump their Kroger-Costco-Whole Foods-Circle K-Trader Joe’s-Wal-Mart for Fresh & Easy remains to be seen. This is the land of brand loyalty, bred into us at a young age. I buy Starkist tuna because my mother bought Starkist tuna, and someday my kids will probably buy Starkist tuna, too. There's no Starkist tuna at Fresh & Easy.

There's a lot of Fresh & East tuna, which no one’s ever heard of. But then, there was a time when I had never heard of Whole Foods...or Costco. Now I couldn’t live without them. Or maybe I can.

Comments? Funny Stories? Email funnybusiness@cnbc.com

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  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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