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London's Sunday Times reported on the extensive market research conducted by Tesco before deciding to open convenience stores in the United States. Fifty senior directors of the United Kingdom-based retailer lived "the American dream: shopping, eating and even 'chilling out' with families living on the West Coast," according to the paper.
The directors' real identities and purpose for their visit was kept hidden from the California families, who were recruited by a market research firm to host the visitors for a month. The Tesco representatives kept daily diaries on their hosts' eating habits, shopping routines, and recreation and entertainment activities.
"Spending time with people in their houses, looking in their cupboards and fridges and actually shopping with them is a great way to understand the market," Lucy Neville-Rolfe, company secretary and corporate-affairs director at Tesco, told the Sunday Times. The British retailer conducted similar exercises in China and Japan before invading those markets.
In addition, according to the report, the Tesco team constructed a dummy store within a warehouse in east Santa Monica, and then pretended that the store was a film set. More than 200 focus groups have toured the store, according to the article. "From what I hear, the ready meals are to-die-for. And Californians are wealthy and busy enough to try them all out," a member of the Santa Monica Chamber of Commerce told the Sunday Times.
The Sunday Times article goes on to verify what CSNews has been reporting about next year's planned Tesco invasion: the new U.S. stores will be modeled on, but not exact duplicate Tesco's Express convenience stores in the U.K. Averaging between 10,000 and 12,000 square feet, with parking for 70 cars and serving a local population of 15,000 people, the new California stores are expected to be larger than Express stores, however. Since Tesco's Express stores average only about 3,000 square feet, the new stores will represent a unique vision of a convenience/grocery store hybrid.
Despite the extensive research, Tesco's 250 million pound expansion to the U.S. is viewed as a risky venture by some observers in England who noted that America has been a graveyard for a string of British retailers -- including Dixons, Marks & Spencer and J Sainsbury.
According to a separate report by The Business Journal of Phoenix, Tesco officials have been touring metro Phoenix every couple of weeks to view potential store locations. One city official said that Tesco started talking to Phoenix six months ago and has proposed building or renovating up to 100 stores altogether -- with the first 50 opening simultaneously for a big blast sometime next year. The official echoed other sources in verifying that the name "Fresh & Easy" has been used to describe the upcoming stores. Tesco, which has an office in Hawthorne, Calif., has been extremely secretive about the new stores and would not verify the name to be used.