What's happening at the already built but unopened Fresh & Easy stores?
| Tuesday, Sep 22 2009 05:55 PM
Last Updated Tuesday, Sep 22 2009 06:14 PM
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A Fresh & Easy Neighborhood Market location in Bakersfield opens its doors for customers and the news media last year.
Fresh & Easy Neighborhood Markets announced its entry into the Central Valley last year with much fanfare, donating $1,000 to a different charity every time it opened a store.
So far, four locations are up and running, at Olive Drive and Jewetta Avenue; California Avenue and Stockdale Highway; and at Panama Lane and Stine Road in Bakersfield; in Delano, there's a store at Cecil Avenue and High Street.
Construction is complete on three more stores in Bakersfield and a fourth in Wasco, but they've failed to open, and it's unclear when -- or if -- they will.
Some industry watchers are speculating that due to soft sales, British parent company Tesco is rethinking its plan to invest $2 billion in opening U.S. stores over a five-year period, but publicly, at least, the company insists it is committed.
"We have just slowed down the rate at which we're opening stores," spokesman Brendan Wonnacott said.
Asked if any of the new stores that have been built will be opening any time soon, Wonnacott could not give a definitive answer.
"We only announce new openings 30 days out, and there are no openings scheduled for Kern County in the next 30 days," Wonnacott said.
Some of the delay, the company said, is to accommodate merchandise and layout changes.
"We're adding more products and additional freezers," Wonnacott said.
Supermarket analyst David Livingston doesn't buy it.
"They're obviously rethinking their strategy or those stores would have opened," said Livingston, owner of DJL Research in Waukesha, Wis.
"They just aren't getting the business," he said. "Consumers aren't accepting them.
"The levels they're operating at, by now most grocers would have long ago shut their doors and given up, but they're stubborn and persistent."
Commercial real estate broker Duane Keathley of CB Richard Ellis isn't as downbeat.
"I suppose it's possible they could decide California was a mistake and pull out, but I have no reason to believe that's true," he said.
"What I've heard from people working with them is that they're just refining the concept to individual markets and don't want to open any new stores during that process."
From the start, Fresh & Easy was an odd duck in the American grocery arena, too big to be a convenience store but not large enough to call a full-sized supermarket.
Typically about 10,000 square feet, the stores carry brand name and private label groceries and an extensive array of prepared foods, stressing value and low prices.
The chain eschews traditional industry practices, passing up loyalty cards, paper checks and live cashiers in favor of cash or plastic at self-service checkout lanes.
There's no reason the finished Fresh & Easy locations can't linger indefinitely, as long as they're properly maintained, according to city of Bakersfield officials.
"They're in compliance with building codes and keeping up with the landscaping and so on," said planning director Jim Eggert. "Everything's been taken care of, but nobody's home."
Eggert said he could recall only one other time a brand new retail site sat unused for so long.
A sporting goods retailer went under shortly after constructing the building that now houses electronics, furnishings and appliance store Urner's, he said.
But there is a new development that could be a positive sign.
Until recently, Fresh & Easy never advertised, but lately it's been purchasing radio spots, billboards and bus shelter signs.
This isn't a case of a retailer changing its mind about the need to build brand awareness, Wonnacott said.
"It just didn't make economic sense, until we had a critical mass of stores open, to spend the money before," he said.
Either way, would-be customers are getting anxious.
"I would be shopping there because my son has some food allergy issues, so I like stores that have a lot of organic products," said Claudia Moore, 46, who lives near the vacant Brimhall Road and Jewetta Avenue location. "I noticed there was some graffiti on the sign but they took care of it right away. I don't know what that means. It just doesn't make any sense to put the money into building them and then not open."
