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Tesco Takes Heat For
Not Supporting Underserved

Jim Prevor’s Perishable Pundit, November 21, 2007

Vendor reports are that sales at the newly opened Fresh & Easy stores are brisk with the chain easily exceeding its plans to sell twice per square foot what a conventional supermarket does.

The same vendors, though, believe the initial price points are not sustainable and wonder if “grand opening specials” aren’t driving a lot of the business.

Of course, the novelty of the concept also makes predictions difficult to evaluate.

In the meantime the Los Angeles Times has blasted Tesco for not “walking the walk” when it comes to locating stores in underserved areas:

Where is South L.A.’s Fresh & Easy?

Tesco has opened its first markets, but not in South L.A. Is the grocer’s commitment to ‘food deserts’ firm?

When British grocery chain Tesco announced that it would expand into Southern California with its new line of Fresh & Easy Neighborhood Markets, shoppers and local officials took heart. They were particularly excited about the company’s stated commitment to doing business in underserved neighborhoods, including South Los Angeles — where affordable, fresh groceries have been hard to come by since the 1992 riots.

The first Fresh & Easy locations opened last week in Glassell Park, Anaheim, Arcadia, Hemet, West Covina and Upland. The much-heralded store in South Los Angeles was not among them.

Tesco offers an explanation for the delay: That store will be part of a development at Adams Boulevard and Central Avenue that also will include affordable housing, and the residential portion of the project hasn’t yet secured all of its funding.

Still, a coalition of labor activists and community groups has loudly questioned Tesco’s commitment to serving so-called food deserts, and their frustration is understandable. Researchers from Occidental College’s Urban and Environmental Policy Institute used liquor license applications to analyze 121 prospective locations for Fresh & Easy markets and found that less than 10% were in census tracts with significantly high poverty rates. Most were near existing supermarkets.

Fresh & Easy stores offer a modest mix of fresh foods, prepared foods and staples in an easy-to-navigate, clean and modern format. They provide a pleasant shopping experience for those of us lucky enough to have many shopping options. For shoppers in underserved areas, convenient access to a Fresh & Easy could be life-changing.

If, in the end, Tesco doesn’t follow through with its stated plans, it will join a long list of market chains that have flirted with and ultimately abandoned South Los Angeles. But we remain hopeful that the Fresh & Easy romance won’t come to that. Tesco officials say they still intend to open stores in South L.A. and several other food deserts. The company says it will open a store in Compton next year.

In the meantime, if Tesco wants to continue tooting its socially conscious horn, it must show — not just tell — Los Angeles that it is serious about bringing groceries to the city’s underserved neighborhoods. And labor, for its part, might consider moderating its demands for a neighborhood benefits agreement to allow Tesco to get its Los Angeles-area operations off the ground. The residents of South Los Angeles are still waiting for affordable, fresh food.

For all the research that Tesco did in coming to America, there is a certain sense in which it was tone deaf. After all, it was completely predictable that the media would be looking to see if Tesco kept its promises. If it had played its cards right, it could be getting glowing accolades; instead, with long drawn out explanations about why it hasn’t opened in South LA and doubt about any specific location coming through, people will start to feel that Tesco was playing them for a song.

Having emphasized this promise, Tesco would be wise to sign a lease very quickly so it can announce a location and show it is the real deal.

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