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FAYETTEVILLE, Ark. -- Tesco said sales at its U.S. Fresh & Easy stores grew 174 percent in the firm's first quarter vs. a year ago; however, the company has not revealed same-store sales figures, reported NWAnews.com.
Since its U.S. debut, El Segundo, Calif.-based Fresh & Easy opened 120 stores in California, Arizona and Nevada —all states hard hit by the recession and the collapse of the housing market. Brendan Wonnacott, a Tesco spokesman, said the company "ramped down" scheduled store openings late last year because of the economic climate.
"Obviously with the change in the economy, the focus has been shifted quite a bit toward budget-consciousness," he said. The company plans to open four more stores in July.
Wonnacott said the company switched to a weekly advertising circular rather than every other week and sharpened its focus on price. Fresh & Easy intends to introduce 1,000 new products this year, many of which will be "budget-focused," he said.
David Livingston, a supermarket consultant who runs DJL Research in Waukesha, Wis., said Tesco misjudged U.S. consumers' appetite for the type of shopping format it is promoting.
Livingston observed the Fresh & Easy stores he visited in Las Vegas were "ghost towns," and some suppliers ceased direct-store delivery because of slow sales, forcing the company to stock more supplies in its warehouse.
"They've totally misjudged every aspect of the business," he told NWAnews.com. "I think they were just arrogant, and they tried to tell us what we wanted, and we wanted something else."
Livingston estimated the stores are doing about $70,000 a week in sales, while the company's target was $180,000 a week.
Globally, Tesco trails only Walmart Stores Inc. of Bentonville, the world's largest retailer, and No. 2 Carrefour of France, in sales.
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