Fresh start

A grocery chain that fits into a niche somewhere between Wal-Mart, Whole Foods Market and 7-Eleven expects to open its first northern Nevada store in Spanish Springs.

Fresh & Easy, a new retail chain owned by the British retail giant Tesco plc, will open a store in the Eagle

Landing Shopping Center under development at Pyramid Highway and Eagle Canyon Drive.

The first phase of the center is set to open in early 2009, said developer Steve Hamilton, the owner of Hamilton Homes.

Fresh & Easy executives continue to be quiet about the company's plans in northern Nevada, although real estate brokers have said for several months the company appears to be scouting several sites for a significant entry into the Reno-Sparks market.

The company set a high bar for itself nothing less than revolutionizing the groceries business in the United States when it announced plans in early 2006 to enter the American market with stores in California, Arizona and southern Nevada.

Fresh & Easy stores run about 10,000 square feet - less than a third the size of traditional grocery stores in the region, but larger than convenience stores.

It emphasizes organic and additive-free products all the eggs it sells, for example, are cage-free but the company also positions itself as an affordable retailer.

The company controls costs with small, non-union workforces. Stores typically employ about 25 people each, all the checkout is self-service and no carts are available. It controls costs, too, through a limited inventory.

House brands account for more than 70 percent of Fresh & Easy sales, including ready-to-eat meals.

Tesco has rolled out the concept aggressively. Since the first Fresh & Easy store opened in Hemet, Calif., last November, the company has opened 82 locations 14 of them in the Las Vegas area. It has said it expects to open 150 stores this year.

The success of the new concept has been much-debated in the grocery industry.

Tesco, which is publicly traded, told investors earlier this year that some of the Fresh & Easy locations are generating sales of $20 a square foot about twice the norm among grocers.

Industry analysts, however, said last spring that they believe Tesco is falling short of its goal of $200,000 a week in sales at the stores. For a time this spring, the company put its growth on hold.

Part of the reason for the slowdown, the company's British executives said, was turmoil in the real estate development market. Some of the shopping center locations it sought, particularly in Nevada and Arizona, fell through when developers were unable to move forward with construction.

Tesco has said it plans to invest $2 billion into Fresh & Easy during the next five years.

Its first stores were served by a distribution center at Riverside, Calif., and the company is moving forward with plans to build a second distribution center near Stockton.

Along with Fresh & Easy, anchor tenants at the Eagle Landing Shopping Center will include Walgreen's and Bully's Sports Bar. Roxanne Stevenson of Colliers International in Reno is handling leasing.