If you’re keeping score, one grocery chain is bankrupt and closing up shop. Another grocery chain is bankrupt and hoping to stay alive in a much smaller form. Now, a third grocery chain is not bankrupt – yet – but it’s closing down anyway.
The long and troubled history of Fresh & Easy is about to come to an end, as the small-format West Coast grocery chain finally calls it a day. A week after reports first emerged that the retailer was looking to sell all or part of the company, company officials have now confirmed that they’re not going to wait any longer for a buyer to emerge – they’re just going to start closing stores right away.
“Over the last two years, we have been working hard to build a new Fresh & Easy,” company spokesman Brendan Wonnacott said in a statement. “While we made progress on stemming our losses and moving the business closer to break even, unfortunately we have been unable to obtain financing and the liquidity necessary to continue to fund the business going forward. As we start the process for an organized wind-down of the business, we continue to work to sell all or part of the business.”
The announcement fell short of confirming that bankruptcy was imminent, but for thousands of employees, shoppers and neighbors, it doesn’t much matter – within weeks, Fresh & Easy will be gone, and the only thing left for sale will be empty buildings.
Fresh & Easy has nearly 100 stores in California, Nevada and Arizona, in many of the same markets where Haggen is also pulling up stakes. Haggen filed for bankruptcy last month, on the heels of East Coast grocer A&P’s bankruptcy.
Each grocer met its demise for different reasons – Haggen floundered after a disastrous acquisition of 146 former Albertsons, Vons and Safeway stores. As for A&P, mismanagement and a failure to keep up with the times have been cited as reasons for its troubles.
When it comes to Fresh & Easy, most would say it was just a bad idea from the start – and it’s a wonder it even lasted this long.
British grocer Tesco introduced the chain back in 2007 as a part grocery store, part convenience store, betting that American food shoppers would like a small, neighborhood store with a limited selection, prepackaged prepared foods and no cashiers. But it was a bad bet. Tesco lost well over a billion dollars before unloading the chain onto its current owner, Yucaipa Companies, which promptly shut down a bunch of stores and tried to streamline operations and keep the company alive.
But it turns out shoppers just didn’t want to get their groceries in a place that didn’t offer everything they needed. Why do part of your grocery shopping at a limited-selection store where the products or the prices aren’t even that appealing, if you’re just going to have to visit a larger store somewhere else to get the rest of what you need?
Fresh & Easy also relied heavily on frequent dollars-off-your-total-purchase coupons, to the point that many shoppers wouldn’t show up unless they had a coupon. When the new owners discontinued the coupons as a cost-cutting measure, many coupon-loving shoppers simply never returned.
As Fresh & Easy starts closing down stores, there’s a small chance that a buyer could come forward and rescue the chain, just like Yucaipa did when it saved the company from bankruptcy in 2013. But it’s a pretty small chance, considering that the Fresh & Easy format by now is essentially a proven loser.
But at least ALDI is coming to town. ALDI expects to open its first California stores next year, as part of a major West Coast expansion plan. ALDI is also a small-format store with a limited selection, but it lacks Fresh & Easy’s pretensions. While Fresh & Easy tried to pitch itself as having “Whole Foods quality with Walmart prices”, ALDI is an unapologetic discounter. And it’s succeeding around the world, while Fresh & Easy couldn’t even get a foothold in one corner of the United States.
So if ALDI doesn’t end up buying Fresh & Easy outright, soon there will be plenty of empty buildings in the area that it can scoop up at bargain prices. So as Fresh & Easy flounders, leave it to ALDI to get the best deal in the end.
“Why do part of your grocery shopping at a limited-selection store where the products or the prices aren’t even that appealing, if you’re just going to have to visit a larger store somewhere else to get the rest of what you need? ”
Because, F&E absolutely *did* have the vast majority of things we needed. I was pretty upset when I saw this today – F&E makes all kinds of things that I really can’t get anywhere else, certainly not for the price, but in my cases, for any price at all. It really was one of our favorite stores. So now there’s going to be a huge hole in our shopping planning. Hopefully Aldi will fill some of that, but Aldi isn’t even going to be here for like a year at best? What should I do until then?
Answer: Trader Joe’s is probably going to get even more crazy crowded, and we’ll be there more often anyway, even though it’s not quite as good, quite as cheap, or *nearly* as convenient. 🙁
I would love to have an Aldi go in to our Fresh and Easy location, but I doubt that will happen. Fresh & Easy catered to a different type of person, a person who had some money and wanted convenience. A lot of the communities that have a Fresh & Easy would probably fight putting an Aldi’s in it’s place. I don’t know California well, as I am new here, but I know the reputation in communities that Aldi’s and the crowds that Aldi’s draws have and many will not want such a store near their home.
Aldi does not draw crowds like Walmart Supercenters. They aren’t going to have a problem with getting new builds pretty much anywhere they want (which will be as close to a Walmart or Home Depot as they can get…which is how they position their stores). As far as an Aldi in a former Fresh & Easy space, government, even in California, can’t stop that. Fresh & Easy has a lot of lousy locations so don’t look for Aldi to end up in but a few, if any, of their soon-to-be former locations.
Aldi’s doesn’t draw crowds here in SE PA. Whenever I drive past, there’s only 15-20 cars in the parking lot, at most.