British-Owned Fresh & Easy Takes a $1.8 Billion Hit and Heads Back Across the Pond

Update: "Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business," according to a company public relations email Wednesday. "Even though our parent company plans to leave the U.S., we’re pleased to confirm there are no plans to close any portion of Fresh & Easy," it says. However, the Tesco Strategic Update describes Fresh & Easy as a "discontinued operation."

Previous story: The corporate dithering is finally over at  Fresh & Easy. The British-owned markets, hit by a 96 percent drop in profits, will be closed and sold.

Tesco will end it's five-year adventure in the United States by writing off $1.8 billion and terminating 5,000 employees.

The schedule for closing and disposing of the stores has not been announced, but there are local Fresh & Easy markets at 19350 Nordhoff St. in Northridge, 15230 Vanowen St. in Van Nuys, and 11900 Balboa Blvd. in Granada Hills.

Patch reported back in December 2012 and February 2013 that Tesco was in a quandary about what to do with the chain of about 200 European-style convenience groceries in California, Arizona and Nevada that seemed to puzzle American shoppers. The hybrid operation featured prepackaged, often precooked meals in a smallish space, about one-fifth the size of American supermarkets, according to Mark Lacter of LA Biz Observed. All the checkouts were self-service, and assistance from employees was often hard to find. 

In addition, Tesco was saddled with a 800,000-square-foot distribution facility the company built in Riverside.

And there was that little matter of the San Diego attorney general who found their overcharging a bit troubling.

The stores began opening in November 2007 just before the recession and sub-prime mortgage crisis forced most shoppers to pull in their belts. It was an era that saw the consolidation of supermarket locations, and even the closing of less profitable sites like Albertsons.

Yet, there was considerable competition from mass marketers like Walmart, Costco, Ralphs, Whole Foods and even boutique stores Bristol Farms and Trader Joe’s.

"While Tesco has done well with its range of compact Metro stores in the UK -- built close to public transport links so shoppers can grab a few items of food on their way home from work -- the idea did not translate well to the U.S. In the American west, most shoppers drive to supermarkets -- sometimes just once a week -- and will look for a broader range of products," Marc Levinson, author of "The Great A&P and the Struggle for Small Business in America" told the Associated Press. 

Analyst  Neil Saunders of Conlumino in London told the Los Angeles Times that “the inevitably painful decision to cut and run was correct.” 

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