TESCO’S FRESH & EASY CASE STUDY 1
Tesco’sFresh & Easy Case Study
Tesco’s Fresh & Easy Case Study
Fresh & Easy is a general merchandise store one of Tesco’s newly opened chain of stores. Since 1997, Tesco’s growth compared to the surrounding stores, as seen it grew from mostly selling groceries to being a major force to reckon with in general merchandise. It is the third largest retailer in the world, only surpassed by Walmart in the United States and Carrefour in France. When compared to Walmart Super Centre, which reaches up to 260,000 square feet high and with other comparable supermarkets at 55,000 and 60,000 square feet, Fresh & Easy is just 15,000 square feet. This is because Tesco, the parent company, calls it an ‘express’ supermarket. Because of its size, which is only 15,000 square feet, Fresh & Easy is different from other chain stores because of what they offer (Messner, 2013). The chain only focuses on freshly prepared and ready-to-eat foods, and with a small emphasis on rose-gold apples, Indian samosas, Japanese shrimp dumplings, and bags of pomegranates. The best comparison to Fresh & Easy, especially to its productions and size, is the Trader Joe’s retailer.
Fresh & Easy with respect to targeting, segmentation, positioning and differentiation, has adopted a strategy as a brand. Concerning segmentation, Tesco grew up mostly concentrating on groceries. With its rapid growth, it was in 2007 that Tesco segmented by making a move into the US market. The move included a fat $2 million commitment. Tesco also expanded with a goal to come up with 1000 stores in the United States (Messner, 2013). With competition from some retailers across the United States, for example, Walmart, Safeway, and Super Value, Tesco’s Fresh & Easy and to position itself to ensure that survives the competition. With research on this, Tesco noted that the retail giant, Walmart, had a minimal presence in the state of California, which had a gross domestic product large enough to stand on its own. Fresh & Easy strategized easily to set up some stores in the city of California. Fresh & Easy also ensured that it was designed from the start as a small neighborhood-style store that was positioned between full-sized supermarkets and convenience stores. With differentiation strategy, Fresh & Easy focuses mostly on the green logo and their shirts are international. Fresh & Easy also targets the storage of food to include reusable plastic bags rather than the use of cardboards.
Tesco’s research efforts for the United States market were started once its resources gained momentum. In 2007, Tesco first made a move into the United States market with a commitment of $2 million. Also, Tesco aimed at conquering the United States market with a goal to open over 1000 stores in the United States (Messner, 2013). Before 2007, however, the economy in the United States was still riding high. The development of housing was spreading fast like wildfire, and all the housing and residents needed some retailers to meet their needs. It was the right time for Tesco to conquer the United States market. However, Tesco was well familiar with the level of competition in could experience in the U.S. Research on the United States market incurred a lot of money, and with the amount of time it could take to make decisions. Tesco’s research into the U.S led to some vital conclusions: it could begin rolling on the state of California first and then later roll out into Nevada and Arizona. With strategies put in place, targets, differentiation, and position in the U.S, research carried out helped in regard to making a decision to conquer the U.S, but it hurt once Tesco, in its initial years, had established itself in the United States. This is because the first Tesco’s that were opened at the time coincided with the start of the subprime mortgage crisis (Messner, 2013). The hardest hit states were Arizona, Nevada, and California. The houses were left vacant, and Fresh & Easy missed to make a mark in ensuring that it meets the consumer needs.
Fresh & Easy will succeed in the long run despite evidence of failure it experiences in the United States. This is because the retailer entered a competitive market that aimed at improving sustainability and fighting competition. Fresh & Easy will excel because it has positioned itself as the chain with long-term sustainability in its DNA. On matters positioning and improvement, Fresh & Easy is designed with energy-efficient refrigerators and lightning. The retailer store also targets its customers by offering most of the meat, vegetables, and other similar fresh foods in reusable plastic containers rather using disposable cardboards (Messner, 2013). In addition, Fresh & Easy break into the U.S market, and most importantly in the state of California, received the most coveted seal of approval, which was given the leadership in Energy and the Environmental Design. Again, the largest distribution center in Southern California hosts the largest array of the solar roof. This ensures that all the products arrived at the stores while kept in hybrid electric diesel semitrailers. With all this in place, it is only a matter of time before housing development begins to attract people, especially in the state of California, and the demand for Fresh & Easy products would be in demand. However, there are some recommendations that could be made to Tesco for the Fresh & Easy.
Recommendations that I could make to Tesco for the Fresh & Easy stores are as follows: First, Tesco need to carry out a massive advertisement for the Fresh & Easy to ensure that consumers are well conversant with what is being offered in the store. Secondly, Tesco should devise a way to come up with to reward their loyal consumers. This way, they would be in a better position to lure over those consumers who believe that “big is better”, in terms of stores (Messner, 2013). With strong competition from bigger stores such as Wholefoods and Trader Joes, Tesco needs to understand what they offer and who their customers are. From this, Tesco needs to position them and identify their place within the market. To do this, they need to find out what exactly do the American consumers appreciate most about Fresh & Easy proposition and then emphasize on it.
Messner, W. (2013). Making the compelling business case: Decisionmaking techniques for successful business growth. Basingstoke:Palgrave Macmillan.