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Yucaipa Cos. to purchase Fresh & Easy Neighborhood Markets; 50 stores to close


Tuesday, September 10th, 2013
Issue 37, Volume 17.
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RIVERSIDE - The equity firm controlled by billionaire Ron Burkle announced today it is buying El Segundo-based Fresh & Easy Neighborhood Market - - which has a distribution hub in Riverside -- from U.K.-based Tesco, but terms of the deal were not released.

The deal, in which Yucaipa Cos. will assume the Fresh & Easy's debt, is expected to be completed in about three months.

"Fresh & Easy is a tremendous foundation," Burkle said. "Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience. Its dedicated employees and great base of customers give us a solid starting point to complete Tesco's vision with some changes that we think will make it even more relevant to today's consumer. We plan on continuing to build Fresh & Easy into a "next-generation convenience retail experience," providing busy consumers with more local and healthy access for their daily needs."

Yucaipa Cos., founded in 1986, has used leveraged buyouts to acquire majority positions in grocery store chains such as Ralphs and Kroger. More recently, Yucaipa Cos. bought a stake in The Great Atlantic & Pacific Tea Co. and Barney's New York.

About 50 of Fresh & Easy's roughly 200 stores nationwide will close, but company spokesman Brendan Wonnacott said most the store's 4,000 employees would keep their jobs.

Philip Clarke, Tesco's chief executive, said the sale was the best for Tesco shareholders and Fresh & Easy's stakeholders.

"It offers us an orderly and efficient exit from the U.S. market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy," he said.

Fresh & Easy targeted California and the Southwest when it entered the U.S. market in 2007 and has steadily lost money, largely due to the wider economy and poor timing. Its debt is reportedly about $235 million.

Tesco is the No. 3 retailer worldwide in terms of sales, behind Wal- Mart Stores Inc. and Carrefour SA.


RIVERISDE - The equity firm controlled by billionaire Ron Burkle announced today it is buying El Segundo-based Fresh & Easy Neighborhood Market -- which has a distribution hub in Riverside - - from U.K.-based Tesco, but terms of the deal were not released.

The deal, in which Yucaipa Cos. will assume the Fresh & Easy's debt, is expected to be completed in about three months.

"Fresh & Easy is a tremendous foundation," Burkle said. "Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience. Its dedicated employees and great base of customers give us a solid starting point to complete Tesco's vision with some changes that we think will make it even more relevant to today's consumer. We plan on continuing to build Fresh & Easy into a "next-generation convenience retail experience," providing busy consumers with more local and healthy access for their daily needs."

Yucaipa Cos., founded in 1986, has used leveraged buyouts to acquire majority positions in grocery store chains such as Ralphs and Kroger. More recently, Yucaipa Cos. bought a stake in The Great Atlantic & Pacific Tea Co. and Barney's New York.

Philip Clarke, Tesco's chief executive, said the sale was the best for Tesco shareholders and Fresh & Easy's stakeholders.

"It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy," he said.

Fresh & Easy, which targeted California and the Southwest when it entered the U.S. market in 2007, has about 150 stores nationwide. Tesco is the No. 3 retailer worldwide in terms of sales, behind Wal-Mart Stores Inc. and Carrefour SA.


 

20 comments

Comment Profile ImageCimarron
Comment #1 | Tuesday, Sep 10, 2013 at 5:57 pm
I hope that means the California stores will stay open.
Comment Profile ImageF&E Shopper
Comment #2 | Wednesday, Sep 11, 2013 at 10:07 am
I hope the store in town stays open. The problem with equity firms is that they cut and slash to get the "numbers" to look right first..........then wait to see if they stay that way without investing further to grow what they've acquired. Tesco's departure is typical of the european financial investors running back home from foreign investments
Comment Profile Imageobservant
Comment #3 | Wednesday, Sep 11, 2013 at 10:54 am
I had never heard of "Fresh & Easy" before it came to Fallbrook. Just from reading the name, I thought for sure it would be Fallbrook's first strip club. I'm still disappointed.
Comment Profile Imageobservant
Comment #4 | Wednesday, Sep 11, 2013 at 2:10 pm
hahaha first strip club.. seriously huh... i worked at one and people thought would joke about that!
Comment Profile ImageJim
Comment #5 | Wednesday, Sep 11, 2013 at 5:31 pm
If it wasn't for an equity firm buying Fresh & Easy from Tesco, Tesco just may have liquidated Fresh & Easy and taken the loss.
Comment Profile Imagewildheart
Comment #6 | Thursday, Sep 12, 2013 at 12:22 am
The Fallbrook store will not closing, according to one of their employees.
Comment Profile Imagerockindriver
Comment #7 | Thursday, Sep 12, 2013 at 7:19 am
Hope the Calimesa store stays open.
Comment Profile ImageTo F&E Shopper
Comment #8 | Thursday, Sep 12, 2013 at 10:14 am
I've been by Fresh and Easy alot but have never shopped there. I do mostof my shopping at Albertson's. Is Fresh and Easy that much better of a store? I may have to start shopping there but please tell us why you shop there.
I appreciate the input.
Comment Profile ImageZZZ
Comment #9 | Thursday, Sep 12, 2013 at 12:37 pm
Love the store. I was a dedicated Albertson's shopper, via Alpha Beta, Lucky-then high priced Albertson's. For a year now, I take the $5.00 coupon that can be used three times per purchase per $25.00ea, saving me $15 bucks right off the bat!!

The meat and veggies need to be prepared within 2-3 days max. (Fresh) Lower prices through out store, just not a lot of variety, so I still go to Albertsons on a different day with my 'little' list.

I have not found a difference in taste of the meats and veggies versus WalMart, Albertsons or CostCo! I can not say the health value...???
Comment Profile ImageF&E Shopper
Comment #10 | Thursday, Sep 12, 2013 at 1:21 pm
In general, I have found that if you're looking for any non perishable items, prepared or frozen foods the price in relation to quality has been consistently better at F&E particularly for the F&E brand. It's not a Costco but standard groceries are a little less across the board. The only negative is that if you want 1 item you have to buy the prepackaged and barcoded unit, they don't sell you one tomato, you have to buy however many they have packaged and barcoded as that is the pricing unit.

I hope the new owner keeps the Fallbrook store!
Comment Continued : The comment above was written from the same location.
Post Continued
Comment Profile ImageF&E Shopper
Comment #11 | Thursday, Sep 12, 2013 at 1:28 pm
To Jim,

Yes you're correct, however, private equity firms are notorious for buying marginal operations doing a cut/slash of costs including personnel before they understand the business thoroughly. If they're good they bring back profitability but most of them aren't. They then sell-off the assets and hope to recover their investment and more.

Most of these PE firms are Princeton/Wharton Business school graduates that are great in business classes for their MBAs but panic in the real world.
Comment Profile ImageTo F&E Shopper
Comment #12 | Thursday, Sep 12, 2013 at 1:58 pm
Thanks kma and ZZZ for the input. I'll give them a try this weekend. If I can save a buck, I'm there!
Comment Profile Imagemy opinion
Comment #13 | Friday, Sep 13, 2013 at 8:13 am
I shop at F&E and have never looked back at the other local grocery stores. I love Fresh and Easy. there prices are low and there staff is friendly, that was important to me. There is always someone to help you to check out and most of the time I like to do it myself. I have found out that most of the employees that work there live in our town, and there is a young gentleman that is up front that F&E is his first job and grateful because it has turned his life around to be positive. I am a loyal shopper and love my local F&E.
Comment Profile ImageShopper 123
Comment #14 | Saturday, Sep 14, 2013 at 9:33 pm
I love to shop at Fresh and Easy for several reasons: easy (takes me about 15 minutes to get in and out of the store), variety of foods (Asian, Indian along with other ethnic foods), coupons, and reward cards. Hope the new owners do not change the store too much.
Comment Profile ImageJD
Comment #15 | Tuesday, Sep 17, 2013 at 9:10 am
Stater Brothers is STILL COMING, eventually...at the south end of town, which will wipe out F&E, and probably Major Market too. I like the big stores where I can just shop for everything I want in one stop. I look forward to SB, a big store with everything, no dumb rewards cards, and low prices.
Comment Profile ImageDR DR
Comment #16 | Tuesday, Sep 17, 2013 at 1:12 pm
@JD-is Stater Brothers Union?
Comment Profile ImagePink
Comment #17 | Tuesday, Sep 17, 2013 at 2:05 pm
Interestingly enough I find everything I want or need at Major Market. They not only have a senior citizen discount, they also have a military discount, so I find some great buys every time I shop there, plus they always recognize me when I come in and check out. The managers and checkers are always smiling and friendly, and Sam does an awful lot for the community. Major Market can always be counted on to donate to and participate in, community activities and events. F&E is fine, so is Albertsons, but I just prefer the ease and friendliness of MM.
Comment Profile ImageBarney
Comment #18 | Tuesday, Sep 17, 2013 at 5:59 pm
Love Major Market as well. But, their prices are much higher. Shopped there this past weekend and paid close to 1/3 higher than I would have at dumb awful Albertsons. Wish Stater Bros would arrive but don't believe it will for years. Also don't think it will cause Major to close; they have (rightfully) a very loyal clientele. It will be Albertsons that will suffer.
Comment Profile ImageMom of lots
Comment #19 | Tuesday, Sep 17, 2013 at 10:00 pm
We are moving out of the state and Fresh and Easy will sorely be missed. We have a large family and F&E saves us hundreds of dollars per month. The $5 off coupons for every $25 you spend is unbeatable. The staff is very friendly and we have gotten to know a couple of them personally.
Comment Profile ImageF&E Shopper
Comment #20 | Thursday, Sep 19, 2013 at 10:33 am
I was a regular shopper at Major Market for years and in general was satisfied with their prices and quality. The meat department as well as the general groceries are good and competitive. The place that MM needs to improve is the produce department. The quality of the produce has fallen consistently and I've had far too much rotten fruit when I get home.......I complained and I know others have as well but nothing changes. Sam needs to address it at the Fallbrook Store because the Escondido store has much better produce consistently.

Article Comments are contributed by our readers, and do not necessarily reflect the views of The Fallbrook Village News staff. The name listed as the author for comments cannot be verified; Comment authors are not guaranteed to be who they claim they are.

 

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