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    Green Tesco Lands in Orange

    Company signs a 20-year deal for retail space in Orange, Calif., to set up its "green" store.

    ORANGE, Calif. -- Tesco is planning to open its Fresh & Easy Neighborhood Market concept here, in a 16,332-square-foot retail space in the Galleria L'Orange, a 55,000-square-foot shopping center, reported CoStar Group.

    The terms of the 20-year lease were not disclosed, and the store is expected to be open by the end of the year. Other tenants in the retail center include Starbucks and Cal National Bank, the report stated. Newport Beach, Calif.-based Strategic Retail Advisors represented Tesco.

    The international retailer is banking on an environmental approach to capture consumers for its Fresh & Easy stores. The retailer is positioning itself with environmentally aware consumers by building eco-friendly stores -- complete with skylights to cut down lighting costs -- offering trans-fat free foods and products free of artificial flavors and colors, along with a logo and store design that relies heavily on the use of the color green.

    The strategy is similar to those being adopted by large retailers including Wal-Mart, which is testing eco-stores in Texas and Colorado. In addition, Wal-Mart is taking things a step further by introducing "green" concepts in its supply chain, out of consumers' sight, according to a report in the New York Post.

    The retailer is setting guidelines that will require some 60,000 suppliers to reduce packaging in an effort to fit more products into fewer trucks, with an estimated cost savings of $4 billion to the retailer and $7 billion to manufacturers, the report stated.

    "Where Wal-Mart has been most vocal has not been in the consumer space but in the business space, the place where you are likely to see real solutions proliferate," Jon Coifman, of the Natural Resource Defense Counsel, told the Post. "Tesco, as a new entrant, is looking for a niche and so it makes sense for them to appeal directly to consumers."

    Tesco has pledged to spend $1 billion over the next five years to nearly halve its energy output around the world. Eco-friendly test stores in Britain are made from renewable timber, use wind turbines for power and recycle rainwater. In addition, a fleet of battery-powered vans run deliveries for Tesco.com, the company's Web site. Each van is estimated to reduce carbon dioxide emissions by 21 tons a year -- the equivalent of driving 51,000 miles in a car, according to the report.

    Observers anticipate many of the environmental breakthroughs to be present at Tesco stores slated to open in Arizona, Las Vegas and California later this year.

    There has already been a plan announced for a $13 million solar panel roof on its distribution center in Riverside, Calif.

    "Tesco is clearly a leader in this area," Craig Johnson, president of Customer Growth Partners, told the newspaper. "What they are doing will put them at the forefront of being green in all senses of the word in the U.S."

    While a number of large U.S. food retailers have moved to cut energy use, Tesco holds one advantage over its rivals -- it is starting with a clean slate.
    "It's much less expensive when you have a green design baked in from the outset," Johnson added.

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