What better testing ground for new concept gourmet mini-supermarkets than Southern California? That's what British supermarket giant Tesco thought, too. Fortune Magazine reporters Matthew Boyle and Michael V. Copeland recently wrote about this new phenomenon in an article that appeared on CNNMoney.


"Tesco reinvents the 7- Eleven" documents the launch of convenience stores that aren't selling beer and snacks as the mainstay of their business. Nor are they offering overheated, stale coffee and hot dogs. Rather, these Fresh & Easy mini supermarkets are popping up in Southern California and the Southwest as a counterpoint to, and competitor to Whole Foods, Trader Joe's, Costco and Mexico's Gigante.
The stores are stocked with mouth-watering, prepared ethnic foods, fresh produce and exotic offerings. Tesco thinks there's a niche for this kind of smaller gourmet mini-market.
Tesco CEO Sir Terry Leahy: "We think Tesco has found a gap in the market, but is there a market in the gap?" Insightful comment since a new venture like this is a gamble. Yet, Tesco obviously isn't squeamish about entering one of the United States's most competitive marketplaces for food or any other consumer products.
Does anybody remember Wal-Mart's smaller footprint Neighborhood Markets, featuring lower prices and more narrow offerings than could be found in its Supercenters? That was a failure, and Tesco's new retail concept might fail also.
Time will tell. Still, some food industry analysts are bullish on the idea and think that Tesco could conceivably have more than 1000 Fresh & Easys over the next five years.
FYI: Tesco's new Fresh & Easy markets officially debuted with Grand Openings in Southern California last week to long lines and rave reviews. After the newness and curiosity subside, can this new format in food shopping be sustained?
Questions:
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What do you think of Tesco's idea of opening mini gourmet supermarkets?
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Do you think they will do well? Or do you think mini supermarkets ought to offer more basic grocery items?
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Would you be tempted to try the prepared meals in a Fresh & Easy or think to order take-out from your favorite Chinese, Thai or Mexican restaurant instead?
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Lastly, do you think a British grocery giant has a better chance of launching a successful new food market format than its American counterparts?
I'd love to get your thoughts.