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FULLERTON, Calif. -- Convenience stores in Fullerton and Laguna Hills, Calif., should brace for impending Tesco competition, as the two towns have been named as planned sites for the company's U.S. stores, according to a report in the Orange County Business Journal.
Both stores are planned to be 14,000 square feet, the report stated. The Fullerton store is planned to be built within a 50,000-square-foot shopping center, according to Matt Stowe, chief operating officer of the site's developer, Lake Development Group.
"It's going to be a grab-and-go, Trader Joe's type format," he told the newspaper.
Plans for the 14,000-square-foot store in Laguna Hills have already been approved by city officials, according to Vern Jones, the community development director. That store is expected to be built within the next year, near the entrance to Moulton Plaza, he told the Orange County Business Journal.
Jones noted that the Tesco store plans are similar to a "mini supermarket," geared towards "urban professionals."
City officials in San Juan Capistrano and Dana Point confirmed that Tesco has looked in those areas, while in Orange, Calif., the company looked into a former grocery store, but has not submitted plans as of yet, according to city planner Robert Garcia.
"They are looking at anything and everything," said Stowe.
The company confirmed that it is scoping out 300 small grocery store sites in Southern California, Las Vegas and Phoenix, where it will spend up to $2 billion over the next five years on the launch, according to reports by the Los Angeles Times. While 300 sites are under negotiations, "not all will get opened," Tesco USA CEO Tim Mason said at the opening of the company's U.S. headquarters last week.
While a definitive opening date of the planned Tesco stores remain unknown, industry experts told the paper that the company will try to have a large impact on the market.
"I think they have an opportunity to make a pretty big impact in the Southern California market … by redefining what a small convenience food store can be," said Jon Hauptman of Willard Bishop Consulting. "They will have the fresh appeal of a Whole Foods without the emphasis on organics, combined with the convenient shopping experience found in a small neighborhood market."
Others believe that while the company wants to change the market, it may face heated competition. "Of all the areas in the U.S., they are trying to enter into Southern California, which is perhaps the toughest market," Gregory Stoffel, of retail consulting firm Gregory Stoffel & Associates, told the paper.
"To go smaller, you've really got to be in the right location and be convenient," he said. "Moulton Plaza is not the most convenient location."