Tesco PLCâs Fresh & Easy Neighborhood Market said it will buy its primary fresh produce supplier as the grocery chain consolidates its southern California operations and cuts costs.
The purchase of Wild Rocket Foods will help with the launch of a âglobal sourcing hubâ in Riverside, Calif., Fresh & Easy spokesman Brendan Wonnacott said in an e-mail. He declined to provide a purchase price.
The hub âwill allow us the opportunity to source more products from the region, especially produce from California, for the rest of the Tesco business,â Wonnacott said.
UK-based Tesco launched Fresh & Easy in Hemet, Calif., in November 2007, though the recession hampered the companyâs initial plans to open more than 300 stores in Arizona, California and Nevada, according to recent press reports. Fresh & Easy currently operates 159 stores.
Tescoâs U.S. operations lost more than $200 million last year, according to a company financial statement in February.
Still, Tesco said Fresh & Easy âhas been making good progress, despite prolonged weakness in the California, Nevada and Arizona economies,â according to the February statement. âCustomers are enthusiastic about our range, particularly the fresh food prepared in the Fresh & Easy kitchen, the store environment and the friendly service.â
Fresh & Easyâs purchase, which is still subject to regulatory approval, is expected to be completed within the next month, Wonnacott said.