"We expect to open 19 new stores in the second half of the year with a continued focus on areas where the local economy has been less severely hit and where we are seeing substantially stronger sales performance. Thereafter, we plan to increase the pace of store openings, helped by the strong pipeline of new sites we already have in place," he added.
Fresh & Easy operates 168 stores in California, Arizona and Nevada.
Leahy said that while economic recovery in the western United States has been slow, Fresh & Easy has "made good progress," with approximately 10% same-store sales growth and significant improvements in store operating ratios during the first half. Sales per store are rising steadily towards and losses per store are reducing. "These trends, combined with benefits of the growing scale of the store network around our Riverside distribution centre and manufacturing campus, give us confidence that the components of a profitable business model are now coming together," he said.
Fresh & Easy plans to accelerate the store opening program next year and expects the business to break into profitability during 2012/13. Leahy said that the company is nearing capacity at its distribution center, which can accommodate around 400 stores.
"Customer enthusiasm for our range, particularly the fresh food prepared in the Fresh & Easy kitchen, our competitive pricing, our neighborhood locations and our environmental credentials, is strong and still growing, as is awareness of the Fresh & Easy brand," said Leahy. "We are continuing to learnadapting and improving our offer in response to customer feedbackbut we know our format has strong consumer appeal."
Concerning the temporarily closed locations, "We have worked hard to ensure we can offer all employees impacted by these temporary closures a job at a nearby store. We remain fully committed to Arizona," Fresh & Easy CEO Tim Mason said in a prepared statement cited by The Phoenix Business Journal. "We have more than 560 employees and, after these temporary closures, we will still have 28 stores in the area. Some of our top-performing stores are located in here, and we see strong continued and future potential for this area."
(Click here for previous CSP Daily News coverage of Fresh & Easy.)
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