(Be sure to read this update: “Shoppers, Staff Upset as Owners Pay to Make Fresh & Easy Go Away”)
For once, it seems, a grocery takeover has been met not with shock and anger, but with a sense of inevitability and even a little relief – at least for those whose stores are remaining open. A long-rumored deal involving the California-based small-format grocery chain Fresh & Easy is finally happening, but dozens of stores will be closing as a result.
The private investment firm Yucaipa Companies LLC announced today that it will buy the troubled, money-losing chain from its British owner Tesco. Tesco has been looking to unload Fresh & Easy for months, after pouring $1.6 billion into the concept and not making a dime (or a ten pence).
While it has its fans, the concept has been widely dismissed as an utter failure. Part supermarket, part convenience store, Fresh & Easy has been criticized for everything from its poor locations to a poor product selection.
So what does Yucaipa want with it? And why is it promising “business as usual” – unless it plans to be in the “business” of losing gobs of money?
Ever since Yucaipa was mentioned as a possible buyer, there’s been widespread speculation that it might want to transform some or all Fresh & Easy locations into a new version of Wild Oats. Yucaipa’s Ron Burkle was the largest shareholder of the former natural food store chain when it was sold to Whole Foods in 2007. Now Wild Oats has been making noise about planning a comeback.
But the news release announcing the deal today mentions none of that. “Yucaipa’s purchase is expected to be complete within three months,” it reads. “In the meantime it is business as usual for most Fresh & Easy stores.”
That’s “most” Fresh & Easy stores. Up to 50 locations are set to close. A full list of closing Fresh & Easy locations has not yet been released, since “we are still communicating with our employees,” a spokesman said. The rest of the 150+ stores will remain open, and will remain Fresh & Easy – for now.
“We plan on continuing to build Fresh & Easy into a ‘next-generation convenience retail experience’,” Burkle is quoted as saying, “with some changes that we think will make it even more relevant to today’s consumer.”
Tesco’s announcement in April that it was looking to sell the chain frightened its fans, who feared the worst. Many had speculated that a company like ALDI would swoop in, buy out the chain and transform the hip Fresh & Easy stores into its own, decidedly less hip discount shops. So the sale, instead, to a new owner who’s promising to keep at least a portion of the chain alive, can only come as welcome news – considering the alternative.
“We appreciate the love and support we have received from you, our most loyal shoppers,” reads a statement from Fresh & Easy. “Rest assured, we plan on working through this transition to new ownership with the same spirit and dedication that we’ve brought to this business since the beginning.”
As for the closing stores, the company says “most products in these impacted stores will be reduced by 25 percent” starting tomorrow. So grab what you can, while you can.
And for the rest of the chain, which began cheekily calling itself “F&Easy” in a polarizing, borderline-expletive ad campaign (“Eff n’ Easy” – yuk yuk, get it?), the challenge for its new owners will be to ensure that actually making money off the Fresh & Easy concept doesn’t prove to be “F&Impossible”.
(Be sure to read this update: “Shoppers, Staff Upset as Owners Pay to Make Fresh & Easy Go Away”)
