Without doubt whenTesco entered the United States with a “new concept” Fresh & Easy and therewas great fanfare. There were two problems: Frist problem was service or lackof it in the stores. The second was packaging, placement, price, portability,products. Tesco’s analyst could crunch the numbers better and most. Their category managers focused on a view ofthe food industry driven by analyst. Yet, they never understood the Americanfood shopping experience.
Yesterday, Tescostated: “Decision taken to conduct strategic review of Fresh & Easy; alloptions under consideration…Tim Mason, CEO of Fresh & Easy, to leave “ If success leaves clues this is a bold clue.
This fall Tescoannounced “that new capital investment in Fresh & Easy was to be tightlyconstrained whilst the business focused on reducing costs and improving theprofitability of its existing stores…It is now clear that Fresh & Easy willnot deliver acceptable shareholder returns on an appropriate timeframe in itscurrent form….
We have therefore appointed Greenhill to assist with the review of options. Inrecent months, we have had a number of approaches from parties interested inacquiring either all or part of Fresh & Easy, or in partnering with us todevelop the Fresh & Easy business. We will communicate progress on thisprocess when we present our full year results for the current financial year inApril 2013.”
The concept heldgreat promise for the ready-2-eat and heat-N-eat fresh prepared food niche. Allmarkets are unique. Tesco simply provedonce again that IQ (intellectual quotient) does not trump EQ (emotional quotient). In the food and beverage sector companiesmust be mindful that the proper balance of EQ and IQ are utilized. Tesco’sstores are failing not because of food quality but they lack warmth and consumer interactiveparticipation.
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