Tesco’s Fresh & Easy supermarket chain in the U.S. launches third private label beer
Tesco, the world’s number three retailer, opened its first U.S. Fresh & Easy convenience store in 2007 amid much speculation whether it would make it on the U.S. market.
Tesco would not have been the first British retailer to fall on its face – rather than on its feet – in the United States. Failures are legion. Many will remember the famous high street retailer Marks & Spencer (M&S) which bought the U.S. chain Kings Supermarkets in 1988 amid much fanfare, but never got a grip on the market and was very glad to see the last of these stores go in 2006.
What makes the Fresh & Easy concept special is that it was based on minutely detailed market research, which saw Tesco executives living in the homes of U.S. American consumers to watch what they ate and how they shopped.
Tesco’s response was a chain of relatively small local stores focusing on fresh foods and own-label produce rather than the usual vast range of U.S. brands and heat ‘n’ eat meals. The chain used a straightforward "everyday low prices" strategy and said it was 15 percent cheaper than U.S. shoppers were used to.
Perhaps this research was faulty because Fresh & Easy has been loss-making ever since its launch. In January 2010, Tesco estimated that Fresh & Easy will lose USD 260 million on USD 550 million of sales this year.
Of the 1,000 store openings that were planned for the first five years, only 125 have materialised to date.
For the moment at least it looks like Tesco has bitten off more than it can chew in the United States.
However, while it has been operating its stores in California, Arizona and Nevada, Fresh & Easy has at least managed to introduce U.S. shoppers to the concept of own-label discount beers.
Its brand Dutch Republic 1581 Beer, which was launched in January 2010, joins Steel Kettle Whistle, an American-style lager brewed in Wisconsin, and Taurino, a Latin-style beer brewed in El Salvador.
Dutch Republic 1581 Beer is said to originate from an eco-friendly brewery in Holland (could it be Bavaria?) that invests in innovative technology to reduce its energy use and impact on natural resources. The year 1581 commemorates the year in which the Dutch Republic was founded, the retailer said.
Dutch Republic 1581 Beer is available in six-pack bottles at the Fresh & Easy stores.
Additionally, Fresh & Easy stores carry a selection of more than 50 other types of domestic and imported beers.
