Fresh & Easy to Cut & Run as Tesco Seeks to Exit U.S. Grocery Market.

The Fresh & Easy grocery store chain grew to 200 stores and 5,000 employees in the U.S. before it’s British parent company Tesco decided to pull the plug. The stores were launched during the recession, and attempted to be a low-cost alternative to the likes of Whole Foods and the other big grocery chains. Unfortunately, Walmart, Target and Costco were already filling that niche.

Tesco made an ambitious play into the U.S.—spending billions of dollars over a 5-year period to capture the attention of the U.S. market. Tesco is a well-known and huge grocery store chain in Britain. However, some of Fresh & Easy’s strategies did not work in the U.S. market—from self-service checkout, the lack of couponing, and food selections that did not necessarily mesh with American tastes, were a big obstacle for consumers who were not familiar with the brand. Grocery shopping can be more about habit and familiarity than price for many consumers.

The company plans to sell, rather than close its 200 stores. Here's what they are currently telling their customers:

As many of you have heard or read today, our parent company Tesco updated on the future of Fresh & Easy.  While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business.  We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy.

To abandon the project, Tesco said it will take a write-off of $1.8 billion. A costly experiment indeed.

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