The news is becoming more clear. In an email this morning to the WGNA eList, Zanotto’s announced that their detailed plans to open a store on the corner of Bird & Minnesota/Alma have been derailed by the arrival of Tesco in the U.S. market.

Tesco is an international grocery and general merchandising retail chain based in th UK. It is the largest British retailer by both global sales and domestic market share, is the world’s third-largest grocery retailer. The chain plans to open 100 new stores in the United States by 2008, including several across California.

Technical issues this morning delayed an email message sent to a store-controlled email list by Dale Tibbils. Readers who got that email did not get the full story, which was successfully emailed to the eList at about the same time:

—– Forwarded Message —-
From: Dale Tibbils
To: elist@wgna.net
Sent: Wednesday, June 13, 2007 8:47:04 AM
Subject: [WGNA] Zanotto’s in Willow Glen–Not Looking Good

This is probably the toughest email I’ve ever had to write — we’ve had such great support from so many people in the Willow Glen area. After nearly a year’s effort the landlord has informed me he is negotiating with a company from Great Britain for the old Albertson’s site.

To say I’m disappointed is a huge understatement. We had obtained funding of $2,500,000 to totally revamp the site. We had reached agreement on the lease with the landlord. In short, we were ready to start work.

Our plans included new tile floor, complete painting of the interior and new low energy lights for the entire store. Plans included a new HVAC and refrigeration system — both low energy. In addition, we would install new bakery, meat, deli and seafood cases for our fresh meats, seafood and deli offerings. The frozen food, dairy, beverage, and produce cases would also be replaced. All this equipment would also include the latest innovations in low energy consumption. New checkstands would be moved back to open the front of the store for tables and chairs.

Our plans included a significant increase in wine selections, organic produce, cheese bar, hot food case, expanded Grab n Go meals and a number of other specialty items. All this along with membership in a grocery co-op that serves over 800 stores providing us an excellent completive buying position.

With the discussions we had held with the city, county and several contractors we were confident we could open a store in September or early October.

The company the landlord is negotiating with is Tesco. Tesco is the largest retail company in Great Britain where they have large supermarkets. They are the third largest retail grocery company in the world and fourth largest overall retail store. They are in Eastern Europe and the Far East and have targeted the U.S. as their next market. Their primary focus is grocery although they have grown into numerous other retail offerings within their stores.

While Tesco is very secretive it appears they are going to offer a 12,000 sq ft store that emphasizes organic produce, no trans fats and “convenient” meals for the busy family. The stores are modeled after their convenience markets in Great Britain. We’re not sure about what they will offer for meat. Their distribution center is in LA and their products will come from there.

They have been compared to Trader Joe’s and 7-11. Their plans for Bird appear to be a 12,000 sq ft store — not a full-service store. The existing building will be demized (either totally gutted or torn down) and Tesco will lease the space they don’t use to others. The landlord hopes to have something to work with in two months. From that point forward I can only guess how long it will take to gut or tear down the existing building, erect a new one and open a store, but it will be a long time.

For the landlord the decision appears to hinge on potential rent they can receive. Tesco has indicated they would be willing to pay a premium although no specifics have been discussed.

Troy — troyt@zanottos.com

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