Clovis News

Fresh & Easy grocery stores on hold

Fresh & Easy Neighborhood Markets will not be opening in the area any time soon -- including the newly built store in downtown Fresno.

Tesco PLC had planned to open at least 10 stores in Fresno and Clovis but is pulling back on its plans to open the small-format grocery store, a spokesman said this week.

The British retailer has racked up significant losses since bringing the Fresh & Easy concept to Southern California, Nevada and Arizona in late 2007, and some industry consultants believed the format is misguided.

"We've slowed down our openings quite a bit," said Tesco spokesman Brendan Wonnacott. "We're just not opening stores in Northern California at this point."

The central San Joaquin Valley is included in the company's plans for Northern California.

The stores will open eventually, Wonnacott said. He declined to say when. At least seven are planned in Fresno and three in Clovis.

The downtown store was built on the site of the Old Fresno Hofbrau restaurant and bar. The landmark at Tulare and R streets was torn down after it closed in 2007 to make way for the store.

The new building is finished and ready to go, said Fresno Redevelopment Agency project manager Lupe Perez.

The finishing touches were recently completed, including the parking spaces, trees in the parking lot and a large clock on the front of the building.

Today, the parking lot is fenced off and the building's windows are covered in black plastic.

The Redevelopment Agency has pledged $100,000 to the store to pay for enhancing the exterior beyond the company's typical design, Perez said. That money will be given to the company when the store opens, she said.

Perez said she was confident the downtown store will open: "I don't think they would have gone through the expense of building something and not opening. I truly believe they will open up sometime in the near future. We haven't gotten any indication otherwise."

Fresh & Easy has 115 stores, including several in Bakersfield and one in Delano.

In February 2008, it announced plans for nearly 40 stores throughout Northern California. It has extensively remodeled some of the locations.

The company also plans to open a distribution center in Northern California to support the new stores but has not announced where, Wonnacott said. The center would serve the downtown Fresno store, but the center does "not necessarily" need to be constructed before that store opens, he said.

In an earnings report this week, Tesco said the Fresh & Easy stores lost about $205 million on sales of $300 million in the fiscal year ending Feb. 28. Tesco did about $85 billion in sales worldwide.

The Fresh & Easy losses were higher than expected, Tesco said, and similar losses are forecast for this year.