It's the end for Fresh & Easy. The West Coast grocery chain has begun closing all stores and winding down operations.
There were rumors that the retailer was considering filing for Chapter 11 bankruptcy protection—in what would have been its second such filing in just two years—but the company doesn't have enough cash, nor could it obtain financing to continue operations, according to Brendan Wonnacott, spokesperson for chain.
Instead, Fresh & Easy is beginning the "the process for an organized wind-down," Wonnacott told the Los Angeles Times.
Fresh & Easy was originally Tesco's first foray in the U.S. market. The concept debuted in 2007 and the highly anticipated effort drew industry buzz, but failed to attract shoppers. Tesco invested millions of dollars into the chain, opening roughly 200 stores and a warehouse facility.
In 2013, Fresh & Easy filed Chapter 11 and was subsequently sold to Yucaipa Cos. Today there are 97 stores in California, Nevada and Arizona.
Yucaipa tried to reposition the concept as a convenience-type outlet for fresh foods, an effort that never got the chance to take off, according to Neil Stern, senior partner at McMillanDoolittle Consulting.
"We suspect that in what is perhaps the final end, it was a case of too little, too late, with the costs of a transformation outweighing the current liability of running the chain" writes Stern in Supermarket News. "A few weeks back, we had an occasion to revisit the Manhattan Beach store, which was always one of the chain's best performers. It showed the promise of what a Fresh & Easy was designed to be, a convenience-sized box with terrific prepared foods and meals offerings with compelling private brands.
"Unfortunately, there were not enough of these types of locations to go around and Tesco's erratic real estate acquisition strategy practically assured that a single solution wouldn't work across a chain."
Fresh & Easy is just one chain on a growing list of supermarket retailers under pressure as the market continues to consolidate. The Fresh Market is exploring options that include a sale to private equity and Whole Foods is struggling to reposition its concept with lower prices for a younger shopper.
-See this Los Angeles Times story
-See this Supermarket News column
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