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British Grocer Pushes Ahead on New Retail Concept in North County

Like London fog, British retailer Tesco is attempting to creep into San Diego County in a shroud of mystery, although a few details have been leaked in official filings at local city halls.

Three sites for high-end grocery stores have been identified this month through applications filed with city planning departments in North County, including Escondido and Vista. Bergman Co., a Chino-based developer tapped to help build and design the new stores, has also revealed a few details.

But several sources close to the company said an informal gag order has been placed on all parties involved. They said they can “neither confirm nor deny” that Tesco is working on sites in Escondido, Fallbrook and Vista. The sources said Carlsbad might be the fourth site.

Although company officials, who have set up U.S. headquarters in El Segundo, said they want to keep details under wraps so that they can introduce consumers to their new high-end convenience grocery store concept without preconceived notions, investment broker Lloyd Greif, a retail broker, said Tesco is more likely worried about competition than customers.

“I think it’s strictly coming from a competition standpoint,” said Greif. “They don’t want anyone stealing their thunder.”

All sites identified thus far would serve as Fresh & Easy Neighborhood Markets, an Americanized version of the British-based company’s Tesco Express store format.

Tesco hopes to carve out a niche for those busy professionals and dual-income households with little time to cook but a craving for healthier, natural and organic goods.

” ‘Will it be successful?’ One would think it would if they have the right price points,” said Greif, president and chief executive officer of Los Angeles-based Greif & Co., which has helped broker such deals as the one that involved Supervalu Inc. acquiring Bristol Farms stores by way of Albertsons Inc.

The San Diego invasion, along with the rest of Southern California, Las Vegas and Phoenix, marks the $77.1 billion-a-year food purveyor’s inaugural step into the U.S. market.

Tesco, founded in 1919, operates 2,800 stores and employs 370,000 people in 12 countries. More than 2,500 new jobs are expected to be created once U.S. operations begin this year, according to company news releases.

Twenty sites in the Phoenix area and 14 in Las Vegas have been confirmed this year by the retailer. Confirmation of the four speculated San Diego sites, and potentially more in the area, could come as early as the next week or two.

“At this time we cannot confirm specific locations in San Diego County, but we are looking forward to serving customers there, and will be making an announcement regarding locations in the coming weeks,” said Simon Uwins, chief marketing officer for Fresh & Easy.


Size Matters

Tesco operates four store formats, ranging from Express, an average 3,000-square-foot high-end convenience store, to Tesco Extra, a Wal-Mart-like general merchandise-peddling store housed in an average of 60,000 square feet.

Although Fresh & Easy is expected to have many of the same grab-and-go food and drink offerings of a Tesco Express , such as fresh produce, wine and bakery items , the sites being considered are quite a bit larger.

The Vista site is reportedly located at Vale Terrace and East Vista Way and involves a former Albertsons grocery store site that measures 30,000 square feet. Fresh & Easy would occupy half the existing building.

In Fallbrook, the reported site on South Main Avenue measures 14,000 square feet and was left vacant by a home improvement store.

The Escondido site is on Ash Street, near the intersection of East Valley Parkway, according to Rozanne Cherry, principal planner with the city of Escondido.

She said Fresh & Easy is addressing driveway concerns with the California Department of Transportation, because Ash Street coincides with the stretch of state Highway 78 that runs through Escondido.

Once those issues are settled, she said her department is prepared to move forward with helping the company along in the development and building permit process.

A building on the site was razed several years ago and Fresh & Easy will have to build from the ground up, Cherry said.

Although Fresh & Easy stores would be larger than a typical U.S. convenience store, Tesco is intentionally making them smaller than a typical U.S. grocery store, such as an Albertsons or Vons. According to a company release, the average Fresh & Easy will be 10,000 square feet to “give customers a faster, easier shopping experience.”


‘Fresh’ Appeal

The company has confirmed that it will spend $400 million in the next five years to develop itself in the U.S. market.

One reported glitch for the foreign retailer has been an issue with liquor licenses.

A citizens group in Escondido has asked the company to purchase an existing license in lieu of requesting a new one. But before the informal gag order, a spokesman for Bergman Co. reportedly said that the company was already in negotiations to do just that.

Tesco’s assimilation to America has consisted of picking up the Fresh & Easy Neighborhood Market name; opening U.S. headquarters in El Segundo, where 150 people are employed; and creating a softer, earthier aesthetic for the stores that will be built here.

In England and elsewhere around the globe, Tesco uses a blue and red logo with sharp, capitalized lettering, underlined with a series of dashes.

In contrast, the Fresh & Easy logo is two shades of green and white, uses rounded lowercase lettering and has a clock in the upper right-hand corner that appears to be made to look like an orange.

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