Fresh & Easy and 7-Eleven poised to compete in Northern California

Tesco Fresh & Easy and 7-Eleven look set to compete in Northern California as both retailers expand in the region.

Tesco, which opened its first Fresh & Easy store on 31 October 2007, now operates 30 stores in the Arizona, Greater Phoenix area; 74 stores in Southern California and 26 stores in the Nevada, Las Vegas market.

It still plans to open in Northern California, despite postponing market entry last year.

Meanwhile, 7-Eleven has announced plans for 50 new stores in Northern California by the end of 2011, according to Convenience Store News.

To date, Tesco is reported to have identified 37 Fresh & Easy store locations for Northern California - 19 in the Sacramento-Vacaville region and 18 in the San Francisco Bay area.

However, Fresh & Easy Buzz, an independent blog, said it had uncovered a further 14 Northern California Fresh & Easy store locations to give a total of 51 sites.

Tesco first started acquiring sites in Northern California in late 2007 but last year it put its planned expansion in the region on hold, citing the recession as the primary reason.

However, it has been gradually accumulating a portfolio of suitable sites as well as building a distribution centre in Stockton in the north of the state. Observers in the US believe Tesco is taking advantage of competitive property prices in a depressed market.

Tesco is also reported to be on the brink of launching a loyalty programme in the US, similar to its Clubcard scheme in the UK.

The retailer has recently ramped up its marketing efforts in the US with the launch of its first regional radio and newspaper advertising campaign in September.

It appears to be paying dividends. Announcing group sales for the 13 weeks ending 28 November 2009, Tesco reported sales in the US were up 37.4%, with stronger like-for-like sales following the range enhancement and subsequent marketing launch of Fresh & Easy in September.

When it does open stores in Northern California Tesco will be competing with convenience giant 7-Eleven.

According to CSNews, 7-Eleven is adding 50 stores to its 500-strong chain in the region and plans to spend $50m acquiring new stores and re-modelling older branches.

The first stores are scheduled to open in 2010 in urban and suburban locations.

According to the company, expansion will improve 7-Eleven's ability to efficiently deliver fresh foods daily.

Tesco Fresh & Easy: ramped up marketing