British food giant Tesco is trying mightily to expand into the US. But they're not going with the big box giant sized model. Reflecting their home base on a small island, Tesco is putting up little individual serving sized stores.
They've hit an environmental impact of a roadblock out in Riverside County, California, and it's put a crimp in the plans. Tesco already has signed leases with existing buildings in Phoenix, Las Vegas and various southern California locations, but they would need a distribution center to service all those new shops.
The local environmental group has given Tesco its blessing, but some other organization has come forward to challenge the construction project. That puts Tesco another thirteen weeks behind schedule, to the tune of $50 million lost plus additional bleeding if the court case drags on longer than that. Who could be behind such an expensive move?
Even though the new Tesco stores will be about one quarter the size of the modern American supermarket, the "Fresh & Easy Neighborhood Market" is projected to capture anywhere from two to six percent of the southern California grocery dollar within five years of opening. To say the least, Safeway, Kroger and Albertson's are alarmed over the prospect of losing one billion dollars in revenue to a British upstart who's coming in with some dinky shop that people just might like because it won't be so overwhelming.
If worse comes to worse, Tesco will find some temporary facilities to serve their needs, but they have every intention of taking on the American market and making headway. Wisely, they've begun out west and avoided the Chicago market. For some odd reason, no one seems to be able to crack the loyalty that has kept Jewel and Dominick's as the undisputed champions. As for making inroads in the North Shore suburbs, let's just say it's been tried, and it's failed. Still, a lovely little green grocer, without a fifty foot aisle of sugary cereals, just might be refreshing.