Tesco in the USA

Tesco is opening Fresh and Easy stores in the USA: starting with Los Angeles, San Diego, Phoenix and Las Vegas. Tesco is the third largest retailer in the world and well known for using lean management methods. I added Tesco to my long term stock picks last year (and Warren Buffett owns about $2 billion dollars worth, too). Their recent press release offers hope for Tesco operating with lean thinking in the USA:

“No where is our approach to serving every neighborhood more evident than Los Angeles, where we will open stores everywhere from Hollywood to Compton,” said Tim Mason, Fresh & Easy Neighborhood Market CEO. “Everyone deserves the opportunity to shop for fresh, quality foods at prices they can afford and Los Angeles is no exception.”
In addition to announcing initial store locations in the Los Angeles area, the company also discussed how it is trying to create a great place to work. Fresh & Easy conducted extensive research with potential employees, who told them that being treated with respect is a key factor.

Fresh & Easy also concluded that employees consistently rank pay, healthcare, retirement savings and paid time off as the top four most valuable components in their rewards program. The company’s rewards package includes those four critical elements and more.

Their blog also offers hope they will practice lean thinking: Keeping things simple at fresh& easy:

For example, why fill a shelf one product at a time if you can figure out a way to fill it twelve products at a time? It makes no difference to customers, it takes the same amount of effort, but it’s twelve times faster. Good for reducing costs, which can then be reinvested in lower prices. Or why use so much energy lighting a store when you can use natural light? You just need windows, and a way of turning down your lights during daylight hours – good for the environment, and good for reducing costs, which again can be re-invested in lower prices.

Perhaps the single biggest example is the way in which we’re approaching our assortment of products. We will only have about a tenth of the range of a full size supermarket, which means that the sales of each individual product will be much higher. This in turn reduces costs across the supply chain, which once more can be reinvested in lower prices.

Related: Lean RetailingTesco InnovationFocus on Customers and EmployeesStarbucks: Respect for Workers and Health Care

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