Tesco’s struggling Fresh & Easy chain to test a c-store version of the grocery store brand, after a successful push with Tesco Express in the U.K.
Tesco PLC is set to test a new Fresh & Easy Express branch of stores, a smaller-format version of its Fresh & Easy grocery stores, in an effort to stem losses from the grocery chain venture, the Wall Street Journal reported.
Most Fresh & Easy stores, which are located in California, Arizona and Nevada, measure around 10,000 square feet. The new Express stores will measure 3,000 square feet and are planned for areas that offer insufficient space for larger formats.
The first smaller-format store is scheduled to open in southern California, although the company declined to reveal the timing of the launch.
Tesco launched Fresh & Easy in the U.S. in 2007. Three years later the chain boasts 175 stores, but is losing money–trading losses widened by 13% to GBP186 million in the year to Feb. 26, 2011, the Wall Street Journal reported.
Tesco has pointed to the higher-than-expected losses on the integration of its food suppliers following two acquisitions, but has said it will break even in fiscal 2013.
The plan to debut a smaller store format in the U.S. follows a successful move into the c-store format in the U.K. in recent years with its Tesco Express format. Tesco, which has a range of formats in the U.K., led the push by all of the U.K.’s large supermarkets to create smaller convenience stores with its launch of the Tesco Express format. It opened 150 new convenience stores in the U.K. in 2010-11, out of the 200 stores it opened in total, taking the total number of Tesco Express stores to 1,285.