By TIFFANY MONTGOMERY
Britain’s Tesco PLC plans to open stores in Fullerton and Laguna Hills and is looking at several other Orange County spots as part of its U.S. push.
Tesco, Britain’s biggest retailer and one of the largest in the world with $73 billion in yearly sales, has said the stores will target folks on the go. They’re set to be modeled along the lines of Tesco’s upscale Express convenience stores, which number 800 in five countries.
The 14,000-square-foot Fullerton store is planned at Euclid Street and Orangethorpe Avenue in a 50,000-square-foot shopping center proposed for the site, according to Matt Stowe, chief operating officer of Lake Development Group in Newport Beach, which is developing the center.
“It’s going to be a grab-and go, Trader Joe’s type format,” Stowe said.
The stores could go by Fresh and Easy, Stowe said, though Tesco hasn’t settled on a name yet.
Tesco officials last week declined to provide details about the stores, including the name.
In Laguna Hills, city officials have approved a plan for a 14,000-square-foot Tesco store at Moulton Plaza, said Vern Jones, community development director. The building is set to go up within the next year near the entrance to the center, he said.
The shopping center, on Moulton Parkway near Leisure World, is home to a Big Lots store and Polly Pies.
Jones described the Tesco store as a “miniature supermarket” geared toward “urban professionals.”
Tesco also has talked with Orange officials about a former grocery store at Chapman Avenue and Main Street but hasn’t submitted plans yet, said Robert Garcia, a city planner.
The company has scouted sites in San Juan Capistrano and Dana Point, according to city officials there.
“They are looking at anything and everything,” developer Stowe said.
Tesco, with 2,500 stores worldwide, said in September it would spend up to $490 million a year on a U.S. expansion, starting on the West Coast.
Tesco spokesman Greg Sage said the company is evaluating 300 sites in Southern California, Phoenix and Las Vegas.
Industry watchers expect Tesco’s California debut to shake up the status quo.
“I think they have an opportunity to make a pretty big impact in the Southern California market by redefining what a small convenience food store can be,” said Jon Hauptman of retail food consulting firm Willard Bishop in Barrington, Ill.
Smaller Tesco stores focus on fresh products and convenience, Hauptman said. He said he expects the Southern California stores, roughly a third the size of a typical grocery store, will be stocked with fresh produce and prepared meals and be designed to get shoppers in and out fast.
In Britain, Express stores sell fresh produce and wines and spirits and have bakeries.
“They will have the fresh appeal of a Whole Foods without the emphasis on organics combined with the convenient shopping experience found in a small neighborhood market,” he said.
But Tesco has picked an extremely competitive market for its U.S. debut.
“Of all the areas in the U.S., they are trying to enter into Southern California, which is perhaps the toughest market,” said Gregory Stoffel of retail consulting firm Gregory Stoffel & Associates in Irvine.
Location will be key, he said.
“To go smaller, you’ve really got to be in the right location and be convenient,” Stoffel said. “Moulton Plaza is not the most convenient location.”
Tesco is big on consumer research. The company, along with market researcher Dunnhumby Ltd., pioneered the practice of mining consumer data from customer loyalty cards, Hauptman said.
They’ve raised loyalty marketing to a new level by analyzing buying patterns, he said.
That devotion to research has influenced the stores planned for the U.S. Tesco conducted extensive consumer research on the U.S. market, according to the company.
As part of its U.S. expansion, Tesco bought an 88-acre parcel in August for a warehouse in Riverside County on the western edge of the former March Air Force Base. The company also opened its U.S. corporate headquarters in El Segundo last week.
“They are not coming all the way across the ocean to make a little splash,” Hauptman said. “They are going to make a big splash.”
