EL SEGUNDO, Calif. -- Already encroaching on the fringes of convenience stores' turf, now "convenience/grocer" Fresh & Easy Neighborhood Market Inc. is eyeing small-store formats as it scouts for additional locations to place its shops in Northern California, the retailer told The Oakland Tribune. The new and smaller formats would likely be about 5,000 square feet, said the report.
Fresh & Easy's traditional markets range in size from 10,000 to 15,000 square feet.
"We're rapidly growing and always looking to serve more neighborhoods," Brendan Wonnacott, [image-nocss] a spokesperson for Fresh & Easy, which is a unit of U.K.-based supermarket giant Tesco plc, told the newspaper.
The chain still will primarily seek locations that would accommodate the 10,000-sq.-ft. format, however, Wonnacott added.
The smaller size would provide Fresh & Easy additional options as it seeks locations throughout California. "We remain flexible in our store footprint in order to open in all different types of neighborhoods," he said.
Fresh & Easy also could wield the smaller format to undertake a expansions through an array of methods, such as "renovating existing buildings, anchoring mixed-use developments, building from the ground up," Wonnacott said.
Some analysts embraced Fresh & Easy's gambit to seek out smaller store locations, the report said.
"Fresh & Easy should definitely be able to make this work," George Whalin, principal executive with Carlsbad, Calif.-based Retail Management Consultants, told the paper. "It makes perfect sense to me."
The locations will be the key for smaller kinds of stores, said Robert Reynolds, principal analyst with Moraga, Calif.-based Reynolds Economics, a retail consulting firm. "The smaller stores could be in downtown or urban locations rather than suburban areas," he told the paper.
An urban location in the Bay Area brings two cities in particular to mind, in Reynolds' view. "This could work in places such as San Francisco and Oakland, where you might be looking at urban infill," he said. "Those are the areas where you tend to find food deserts, in neighborhoods where markets are scarce."
Being flexible in California particularly makes sense because the state is saturated not only with potential shoppers, said the report, but also with numerous vendors.
"In California, there are a limited number of quality retail spaces available," Whalin said. "A retailer needs to open its mind to enough different kinds of spaces."
For now, Fresh & Easy has officially said it would open new traditionally sized stores in 13 Northern California locations, starting in March. It plans stores in Danville, Concord, Walnut Creek, Vacaville, Pleasanton, Hayward, Pacifica, Napa and Modesto. It also plans at least two stores in San Jose and at least two in San Francisco, it said.
Fresh & Easy also has bought properties for possible future stores in Oakley, Brentwood and Vallejo. The grocer also is thought to be planning a third store in San Francisco, said the Tribune.
Viewed as a direct or indirect competitive threat by many in the convenience channel when it first opened in Southern California in November 2007, Fresh & Easy continues to be watched closely by the industry. (Click here for previous CSP Daily News coverage of Fresh & Easy.)
El Segundo, Calif.-based Fresh & Easy now operates more than 150 stores in California, Arizona and Nevada. In addition to fresh prepared meals, meats and produce, it offers national brand products and household items. The chain's fresh&easy brand products have no artificial colors or flavors, no added trans fats, no high-fructose corn syrup and only use preservatives when absolutely necessary.
On average, Fresh & Easy stores use 30% less energy than a typical supermarket. It uses LED lighting in external signs and freezer cases, offers customer recycling in every store, and it uses advanced refrigeration and freezer units to cut back on energy usage. The company also recycles or reuses all of its display packaging, sending the majority back through its distribution center. Fresh & Easy is a pilot member of the LEED Volume Certification Program, demonstrating its commitment to build sustainable buildings. The company has also voluntarily joined the California Climate Action Registry and The Climate Registry to disclose its greenhouse gas emissions. At its distribution center in Riverside, the company invested $13 million in a 500,000-sq.-ft. solar roof installation.
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