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Fresh&Easy

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Geneviève Bérubé

on 16 November 2016

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Transcript of Fresh&Easy

Diane GUYOMARD
Justine SEGOUIN
Loïc TREMBLAY
Geneviève BERUBE
Diana ALEJANDRE
Capucine GASPART

Another British Invasion
Commercialization steps in the New Product Development Process:

Opportunity to get into the US market
Goal of 1000 US stores in the first five years
Date : November 1st, 2007
Place : Helmet, California


Fresh&Easy:

Tesco's subsidiary
182 stores in the United States
(California, Arizona, Nevada)
November 2013, it has been owned by Yucaipa Company
Presentation of Tesco
A multinational grocery and general merchandise retailer.

Created in 1919 by Jack Cohen in England.

The world's third largest retailer, based in the United Kingdom.

Expansion in the UK and 14 other countries in the world.

Biggest competitor : Walmart

Description of Fresh&Easy according to the different types of retailers
Amount of service :

self-service retailer


Product line :
an hybrid retailer : mix between
convenience store
( located near to residential area) &
category killer
(focus on fresh, prepared and ready-to-eat foods)




Relative prices:
a particular
discount store
(low prices without high volume : "big box discounts without big box")


organizational approach:

corporate chain
As a retail brand, assess the Fresh&Easy retail strategy with respect to segmentation, targeting, differentiation and positioning
Evaluate Tesco's research efforts for the U.S. market.
Will Fresh & Easy succeed or fail in the long term?
F&E was considered as a success.

Crisis:

The
subprime crisis
disrupts the situation
(more and more houses emptied : consumers moved & incomes are failling).

Tesco has missed the mark of
meeting consumer's needs
(don't adjust the feedback request quickly)

The company need
economy improvement
to boost the consumption and thus the profit. Grocery sector is in difficulties.


Future is uncertain for F&E











What recommendations would you make to Tesco for Fresh & Easy?
understanding the marketplace and consumer’s


take into account the
macro-environment
changing & crisis


diversify its offer
Answers to the questions for discussions
Conclusion
Fresh&Easy

People had a good perception
Needs are not satisfied
Target the wrong market
Wrong timing due to the recession
Wrong solution

Results

Unexpected results : only 150 stores after 3 years
Lost of $260 million on $550 million in sales in 2010

Future

An uncertain future
The company handed over more than 150 of its stores to Ron Burkle's Yucaipa
Lend to Burkle
$10 000 000
to take the business off its hands
Summary of the case
The main issues encountered
The recession
2007, the worldwide economic crisis time

An unadapted concept
Concept of ready-to-eat foods is not that popular in the US
Require a change of habit

A wrong target market
Not useful enough products

Some desperate moves to try to solve the problem
Decision to add 1000 articles to their stores
-Objective :
To crack the U.S. market ( 1000 stores in 5 years)

-Methods
1.Ethnographic research investments to understand American customers
2.Microenvironment evaluation (Competitors, etc.)
3.Positionning (Self-service, small neighborhood-style stores, sustainability, wholesome food)

-A bad timing :
Economic crisis of 2008 (Vacant houses, distance between Tesco's offering and consumer's needs)==> Bad evaluation of the macroenvironment!

-Conclusion :
Not quite a hit (150 stores after 3 years, losses of $260 millions in 2010)
20 years of data, observation of
consumer behavior

(in the kitchen)


Housing development:
analyze of supply and demand


Observation of the competitors' geographic position
(few in California, Nevada and Arizona)


Analyze the Gross domestic product of these states







Segmentation :
Geographic
segmentation (residential area)
Demographic
segmentation (neighborhood families)

Targeting:
Eco-friendly people

Differentiation :
Green & eco-friendly brand image, Energy and Environmental Design


Positioning:
High quality product and fresh prepared & healthy read-to-eat food.

Source : http://www.statista.com/statistics/263614/gross-domestic-product-gdp-growth-rate-in-the-united-states/
Consulté le 16 novembre 2014
In 2009, we can notice the only drop in more than 40 years
Source : http://perspective.usherbrooke.ca/bilan/tend/USA/fr/NY.GDP.MKTP.CD.html
Consulté le 16 novembre 2014
Tesco Fresh & Easy : Another British Invasion
Full transcript