The retailer will open its first 15,000 sq ft grocery store at Long Beach, California, this week through its Von’s subsidiary. Called The Market, it is located in the heart of the region being targeted by Tesco’s Fresh & Easy stores.
The strategy will be a threat to Tesco, whose Fresh & Easy roll-out was put on hold in March while it reviews its performance.
The opening also coincides with US giant Wal-Mart’s plans to open its first small-format store in Arizona.
Planet Retail grocery research manager Natalie Berg said the move indicates Tesco’s competitors are taking the UK grocer’s push into the US seriously.
She said: “Safeway’s new store in Long Beach is a key Tesco region. If its new format is successful, it could convert more than 50 of its stores.”
Safeway’s new stores will reportedly be more upmarket than Fresh & Easy and focus on a strong own-label offer, as well as good merchandising and design.
Berg added that the move signals a shift in the way US grocers are encouraging customers to shop. American consumers are being encouraged to buy “more fresh produce in smaller amounts more often”, she said.
Tesco operates more than 60 Fresh & Easy stores in the US.
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