Two years of thorough, detailed market research. Over $1.6 billion in investments. A brand new, state of the art warehouse with America’s largest collection of solar panels. All to power Tesco’s Fresh & Easy grocery chain – the revolutionary supermarket concept that was to redefine food retailing in the United States. Five years later, Tesco said that it will conduct yet another strategic review of its Fresh & Easy Neighborhood Market business that “likely” will lead to the sale or shuttering of the division. Tim Mason, Fresh & Easy’s chief executive and a 30-year Tesco veteran, has left the company. Tesco CEO Philip Clarke was quoted that Fresh & Easy “will not deliver acceptable shareholder returns on an appropriate timeframe in its current form” and that “it’s likely but not certain that our presence in America will come to an end.”

If the decision is made to sell the chain and its real estate encompassing 200+ locations, there could be a short list of potential suitors. Walmart, with its Express format, could look to acquire some or all of the approximately 15,000 square foot Fresh & Easy locations on the West coast. The chart below analyzes the company’s top five markets ranked by number of locations in each, with a two year history of market share and store counts.

Fresh & Easy – Top Five CBSA Markets by Area Locations*

*Source: Chain Store Guide’s 2012 Grocery Industry Market Share Report

While many thought Tesco had the innovative minds and deep pockets to make a successful run at the U.S. grocery market, its Fresh & Easy concept seemed to miss the mark on numerous levels. Next to the aforementioned green warehouse, a large food factory was built to produce the ready-made meals that UK shoppers buy by the million but were relatively unknown in the U.S. Much of their pre-debut research seemed faulty, as interior design, package sizes, and the pre-made meals were changed over the course of the past five years. This, coupled with the harsh recession and poor housing market synonymous with the West coast proved too much of a burden for Fresh & Easy to bear.

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