Fresh & Easy to close six stores in Las Vegas

Fresh & Easy is temporarily closing six grocery stores in Las Vegas as a result of the economic recession, a corporate spokesman said Monday.

The stores set to close by Nov. 2 are at Desert Inn and Pecos roads; Vegas Drive and Jones Boulevard; Lake Mead and Hollywood boulevards; Warm Springs Road and Eastern Avenue; Eastern and Fremont Street; and Lake Mead and Las Vegas Boulevard.

"It's just a combination of several different things," Fresh & Easy spokesman Brendan Wonnacott said from Los Angeles. "It's one of the very hardest-hit areas economically. The main thing is all the jobs are safe."

About 100 employees are affected by the closures but will be transferred to nearby stores where possible, Wonnacott said. Fresh & Easy employs 420 people in Las Vegas, he said.

"Some of our best-performing stores are in Las Vegas. Of course, these locations are slower than the others," Wonnacott said. "The tough part is we do see strong potential for these sites and we plan to reopen them."

The company plans to hold onto retail sites with upside potential as it continues with an ambitious and aggressive expansion, Wonnacott said.

Philip Clarke, who is replacing Terry Leahy as chief executive officer of parent company Tesco in March, announced plans to expand from 168 Fresh & Easy stores now in the United States to 400 by February 2013. Tesco had originally said it would have at least 200 stores in the United States by the end of 2009.

In addition to the stores in Las Vegas, Tesco is "mothballing" six stores in Phoenix and one in Moreno Valley, Calif. Those regions all have shrinking populations, high percentage of housing foreclosures and high unemployment rates.

Most of the closures are C-level stores, or those doing less than $50,000 in weekly sales.

"Many commercial and residential developments have been put on hold or stopped entirely around these stores and they are not performing in line with our other locations," Fresh & Easy Chief Executive Tim Mason said in a company statement. "We will reopen these stores once the markets have been given some time to recover."

Fresh & Easy opened its first 15 stores in Las Vegas in 2007, taking some of the former Rite-Aid locations, and quickly expanded to 27 stores in the valley.

Tesco reported a loss of $151 million for its Fresh & Easy grocery store chain in the United States in the first half of the fiscal year, despite reporting revenue of $388 million, a 47 percent increase over the same year-ago period.

Tesco officials said a "significant" amount of the loss was due to its buyout earlier this year of Wild Rocket Foods, Fresh & Easy's former in-house produce supplier, and 2 Sisters Food Group, its former in-house meat supplier.

Fresh & Easy joins a number of other grocery chains that have closed stores in Las Vegas over the past three years, including Albertsons and Vons. Hispanic grocers Mercado del Pueblo and Los Compadres also closed stores.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.