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Both the New York Times and the Los Angeles Times have sizable pieces this morning about Tesco’s plans for the US and its planned opening of Fresh & Easy Neighborhood Markets in California, Arizona and Nevada later this year.

• The New York Times writes: “Britain’s largest retailer, Tesco, is finally ready for its American debut.

“It has sent executives to board with American families, watching what they eat and where they shop. The scouts have built a clandestine store inside a California warehouse to test the reactions of selected people, telling any busybodies who inquired that it was a movie set. They have run computer models and pored over economic data and mapped demographic trends.

And, of course, they have sized up the competition,” having considered a US invasion for two decades before finally making the move.

The NY Times writes, “The Tesco strategy can be considered an end run around the world’s other giant retailers, Wal-Mart and Carrefour, which have recently been withdrawing from difficult markets after a race to plant flags in as many countries as possible.

“Wal-Mart’s growth at its superstores has faded while Carrefour is pulling back to concentrate on thinning margins in France, its home market. Tesco, meanwhile, is at the top of its game in Britain, where its business is generating plenty of cash for investment overseas. Tesco knows that confronting Wal-Mart head-on in Wal-Mart’s home market would be suicidal. By slipping in through a neglected niche, Tesco hopes to build a business where even Carrefour fears to tread…Tesco hopes to avoid the pitfalls that have tripped up other foreign retailers in the United States by starting small and growing organically rather than entering the market with a splashy acquisition.”

• The Los Angeles Times takes a somewhat more localized view in its lead, as might be expected:

“A new chain of mid-size grocery stores — each about the size of a Trader Joe's — is quietly being readied for a full-scale assault this fall on Southern California,” the LA Times writes. “With little fanfare so far, Tesco, Britain's largest retailer, is spending as much as $2 billion to launch Fresh & Easy Neighborhood Market, starting in the Southland, Las Vegas and Phoenix…The company already has about 100 stores in the works that might alter the supermarket landscape, possibly driving down prices and competing for workers, all at neighborhood locations away from huge shopping centers.”

The Times reports that “the first stores are expected to open in late October or early November. The company plans to offer a selection of foods, liquor and personal items and create about 2,500 jobs over the next year. But don't expect the British firm to stock hometown favorites such as sausage rolls, creamed tapioca and Yorkshire pudding.

“Offerings at Fresh & Easy will be ‘less processed’ than most packaged food…The stores — each with about 10,000 square feet of selling space — will offer a carefully chosen selection of meats, produce, wine, packaged goods, dairy items and prepared meals...(and) will stock about 3,000 products, a much smaller selection than what's found in a traditional supermarket. A larger supermarket might offer 10 brands of soap, but Fresh & Easy will have just a couple.

“Instead of large tables of apples and other produce, fruit and vegetables will be displayed in rows of smaller bins.

“The heart of each store will be an area that Fresh & Easy is calling the ‘Kitchen Table.’ It will function like a food information desk. Customers will be encouraged to stop and chat with employees trained to answer questions…Prepared food, meals people can grab on their way home from work, will be a major part of the formula.”
KC's View:
It’s interesting that the Wall Street Journal has a story this morning saying that US supermarkets “are winning back shoppers by sharpening their differences with Wal-Mart's price-obsessed supercenters, stressing less-hectic stores with exotic or difficult-to-match products and greater convenience.”

The Journal has it right – though it isn’t exactly like deciphering the Rosetta Stone when one comes to the conclusion that to best compete with Wal-Mart, one has to do something different. (We’re not that smart, and we’ve made that observation central to almost everything we’ve written or said about the industry for the past five-plus years.)

We mention the Journal piece because the language was striking. It occurs to us that if Tesco is successful in the US, it will be because it will offer sharp differences from many US supermarkets, not to mention Wal-Mart. The “Kitchen Table” concept seems very smart – it sounds like Apple’s “Genius Bar” adapted for the food biz.

To succeed in the US food business these days, one has to be sharper and faster and more differentiated than the other guy. “Me-too” approaches simply won’t work, and the winners will be the companies that build this knowledge into their cultures. It won’t matter whether companies are big or small. It will matter whether they are nimble and innovative and are able to think and act different.

This will require varying levels of change for many companies, but that’s okay. Change is good. Change is inevitable. And resistance is futile.