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Fresh & Easy expanding into Northern California

by Tim Linden | August 25, 2010
Fresh & Easy is opening nine new stores in September in its current markets and has announced plans to extend its reach into Northern California with the opening of seven stores in the San Francisco Bay area in early in 2011.

Company spokesman Brendan Wonnacott said that on average, Fresh & Easy continues to open stores at the pace of one a week, but it tends to bunch the openings together.

"For example, we opened no new stores this month (August 2010), but we will open nine next month, including our 100th store in California," he told The Produce News Aug. 24.

Currently, Fresh & Easy, which is owned by British retail giant Tesco, has 159 stores in California, Arizona and Nevada. The majority of those stores are in Southern California, but the firm has inched northward over the last two years.

"We opened our first store in Bakersfield (in the southern end of the San Joaquin Valley) in December of 2008 and our first store in Fresno (about 100 miles farther north) in January of this year."

Of the new stores opening in September, one will be in the Fresno area. The firm also announced that a Modesto store, which is even farther north in the state's Central Valley, will open in early 2011. The Bay area stores are spread throughout the region, with one each in San Francisco and San Jose and the other five sprinkled throughout the suburban communities east and south of the City by the Bay.

Mr. Wonnacott said that many factors go into choosing a location for the stores, with zoning and city licensing procedures high on the list. He said that with its 159 stores, Fresh & Easy has proven that the small format can work in virtually any neighborhood - from the inner city to the suburbs.

"In the Los Angeles area, we have stores in Hollywood and Pasadena, but also in South City and Compton," he said. "Those all have very different demographics. We have shown that this format works anyway. We have put the stores in a lot of different types of locations, and they all perform about the same."

That same diversity of store locations is slated for Northern California. The San Francisco store will be located in the Bayview district, which is an area in transition that most often makes the news because of its high crime rate. There are also stores planned for the blue-collar communities of Vacaville and Concord, as well as the more upscale cities of Danville and Walnut Creek.

Fresh & Easy Neighborhood Market first opened in Southern California in November 2007, and the banner has steadily expanded ever since. Mr. Wonnacott said that each store typically has a sales space of about 10,000 square feet, with the total store space in the 13,000- to 15,000-square-foot range. This small format allows the company to find many different locations that will work.

"We have many standalone stores, but we also have stores that fit well in existing spaces," Mr. Wonnacott said. "And we have other stores in new developments. In fact, the Bayview store [in San Francisco] will be part of a new mixed-use development" that will combine retail and residential spaces.

In a company press release, Fresh & Easy Chief Executive Officer Tim Mason said, "We're excited to continue opening new stores and creating jobs throughout California. Customers love our stores, and we are eager to introduce Northern California to Fresh & Easy and our fresh, wholesome food at affordable prices."

Mr. Wonnacott said that initially the Northern California stores would be serviced by the firm's distribution center in Southern California. He said that there is no announced timetable for the opening of a supply facility in Northern California, but he added that the eight Northern California store openings in early 2011 are just the first eight of what should be many more.

When the company reaches an undeclared point of critical mass, Mr. Wonnacott indicated a Northern California distribution center would become part of the mix.