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    Tesco Admits it Goofed in the U.S.

    Shopper loyalty, buying habits misunderstood, Fresh & Easy executive said.

    LONDON -- Tesco's early market research was mistaken, and the retailer may make big changes to its U.S. Fresh & Easy stores, according to a report in London's Times.

    "We may have assumed that certain elements of the Fresh & Easy brand would do the work for us and we would not have to go down and dirty on price. That may have been a mistake," said Tim Mason, head of Tesco’s U.S. business.

    Ahead of Fresh & Easy’s launch in November 2007, Mason trumpeted the in-depth research that was done to identify a gap in the West Coast grocery market.

    Marketing director Simon Uwins said: "We went into people’s houses, talked to them about food and food shopping. We went into their kitchens and poked round pantries."

    Unfortunately, Mason now admits, the retailer did not poke around their garages, where they would have found huge freezer chests bulging with stockpiled meat bought on discount.

    "There’s less loyalty in the American market," he told the newspaper. "A Brit has to hear it a few times before you accept that people make up their mind where to go each week when they check out the special offers round the kitchen table."

    "In a key moment at a focus group, one man told them that he had stopped shopping at Fresh & Easy because they no longer sent him a flier promoting the latest special offers. We came out of that meeting and said we had better make sure we hit everyone in the area with fliers."

    In addition, the recession slowed expansion. There are 113 Fresh & Easy outlets now, with its previous plans to have 200 branches put back at least six months, the newspaper reported.

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