Thursday, April 19, 2012

Safeway might be for sale and Fresh & Easy might be closed by dropped by Tesco.

Unable to achieve the scale they needed for profitability within a reasoned time frame and under pressure at home.  Tesco has been asked over and over again what are they going to do with the “American experiment?  Tesco continues to insist that repositioning to a smaller footprint while closing miss placed units with wrong components is the answer.  Why not convert them to Wawa’s? Wawa works!

We think they might consider selling the lot too well funded German owned Trader Joe’s might be one of the best solutions.  Another might be leasing all the units to Eatzi’s!  Americans love Eatzi’s food offerings, package sizing and mix and match meal components. Eatzi’s is America’s first Grocerant and positioned for growth.  Phil Romano has done and can do what the Tesco team could not, sell food.  By the way we can help too!  Do you think that Walgreens should buy Fresh & Easy? Look at the success Walgreens is having in Fresh food that is ready-2-eat in NYC, Chicago and Boston.

Bloomberg reports that Safeway stores are an idea candidate for a takeover.  Clearly Safeway is burden with legacy grocery store processes and management mentality from 70’s, 80’s, and 90’s that they simply refuse to let go of.  I will give Safeway some credit, they understand that the customer is dynamic not static.  Yet when remodeling units into “lifestyle” stores they expanded floor space and what consumer wanted was a smaller footprint, fast in-out, with ready-2-eat and heat-N-eat fresh prepared food (legacy mentality).

Success does leave clues and legacy food retailing is in flux.  Dollar stores are cherry picking all legacy food retailers while entering the fresh food niche. Walgreens is finding success in fresh prepared ready-2-eat and heat-N-eat food in urban locations.  The grocerant niche is booming garnering share of stomach.

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