Small grocery stores have big plans in California

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In a world of supersized food stores, British-based grocer Tesco is banking that smaller is better.

The retailer has ambitious plans to build at least 10 Fresh & Easy Neighborhood Market stores in California. Its smaller-format stores average 10,000 square feet, about one-fifth the size of conventional grocery stores.

"Our stores are compact, so they are easier to shop in and are located in neighborhoods so people can walk or ride their bike," said store spokesman Brendan Wonnacott. "We are also a one-stop shop where you can buy everything you need to run your house for a week, in addition to having fresh and ready-to-eat meal options."

And while some stores are in the planning pipeline, construction is going on at several sites.

Several of the stores are expected to open by the first quarter of 2009.

Since entering the U.S. grocery store market last fall, Tesco has generated lots of buzz in the industry and among consumers.

The company has 81 stores in Southern California, Arizona and Nevada. And this week, it plans to open its 82nd and 83rd stores in Las Vegas and in Moreno Valley, Calif.

Each store employs 20 to 30 workers, and entry-level positions start at $10 an hour. The company plans to hire about 250 workers at its stores as they open.

In all, Fresh & Easy employs more than 2,600 people at its stores, distribution center and company headquarters in El Segundo, Calif.

Tesco's smaller-store concept appears to be resonating with shoppers who want convenience, a value and healthy food choices, analysts say.

One of Fresh & Easy's trademarks is its wide choice of ready-to-eat meals along with its own branded products.

Kathleen Thomas, spokeswoman for the Food Marketing Institute in Virginia, said shopping trends show that people want to drive shorter distances to the grocery store while also looking for options that fit their busy lifestyles.

"Our trends data shows that families don't know what they're going to eat two hours before dinnertime," Thomas said.

Tesco is not alone in building smaller stores. Wal-Mart plans to open four "Marketside" stores in Phoenix this fall, and Safeway also opened a smaller-format store in Southern California.

Trader Joe's also has been successful with the smaller-store concept.

Brian Dowling, a Safeway spokesman, said that while its 15,000-square-foot store will focus more on its fresh offerings including seafood, meat and produce, it was not prompted by Tesco's presence in the market.

"We are all about finding ways to better service our customers," Dowling said. "And if we can do it with a smaller store, then we will look at those opportunities."

(E-mail Robert Rodriguez at brodriguez(at)fresnobee.com)

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)