Tesco U.S. rethinks merchandising

EL SEGUNDO, CALIF. —Tesco Fresh & Easy is tweaking both its look and product mix during a self-imposed break on expansion. Changes include an expanded line of private label products and new signage in stores.

The most dramatic change is the rollout of 250 new products to its already sizeable private label. The roll-out began in early May with products that include fresh prepared meals, juices and meats. And contrary to some published reports, Tesco says all the products are new and were developed here in the United States.

“These are all new products developed here by our chef,” said Fresh & Easy spokesman Brendan Wonnacott. “None of these are imports from our British stores.”

One new product already in stores is the Mixed Grill Pack, which retails for $9.99 and contains four sausages, four beef patties, four chicken thighs and four drumsticks. Other products are due to gradually roll out in stores over the next several weeks.

Tesco is also experimenting with a new look inside of stores. Wonnacott said the chain has added new, more colorful signs in several stores in Southern California and Phoenix.

“We’ve added new signs in a handful of stores that have different colors and graphics,” said Wonnacott. “They’re not radically different, but they are a change and do tend to warm up the stores.” The new signs are going to be part of Tesco’s next scheduled opening in Manhattan Beach, Calif., on July 2.

Fresh & Easy ceo Tim Mason said in a statement that the chain is adding new products in response to feedback from customers. “We continue to listen to our customers and look for ways to make their shopping trip even better.”

Tesco is due to resume expansion in July and says it is on track to have up to 200 stores opened by 2009. The chain has denied a report from a U.K.-based analyst that claimed its stores were 70% under their projected revenue during the first three months of operation, though it has said that sales have varied from store to store.