Never one to miss a PR opportunity, British grocery giant Tesco has announced that it is delaying new Fresh & Easy grand openings for at least three months, “pausing for breath.”

According to the Tesco Chief Marketing Officer Simon Uwins’ own weblog:

… After opening our first 50, we planned to have a 3 month break from openings, and other than a couple more in Phoenix, we’re taking it (albeit, in our usual fashion, with 59 stores already open).

Why?

Quite simply, to allow the business we’ve created to settle down.

In 9 months, we’ve gone from a project team of 200 people to a business employing nearly 2500 people - and in another 9 months, it’ll be over 5000. In a little over 4 months, we’ve gone from a business with no stores to one with 59 - with hundreds more in the pipeline.

Except the SJ Business Journal is also reporting that sales are well below expectations for the already-open Fresh & Easy stores:

A Piper Jaffray analyst said mid-month that Fresh & Easy was failing to attract shoppers and had missed its early sales targets by 70 percent.

Tesco had hoped to bring in sales of $100 million over six months, the report said, but had sales of only $30 million in that period, according to the analyst’s report, which was based in part on information from suppliers. Tesco said in published reports that it was “bewildered” by the revenue assertions and called the report “utterly baseless.”

In the UK, the Sunday Telegraph also cuts to the chase, in its story first breaking the news:

Tesco has halted the rollout of Fresh & Easy, its chain of US convenience stores, while it reviews the performance of the fledgling business. The move will spark renewed speculation about the performance of Britain’s biggest retailer in the world’s largest consumer spending market. …

Amid claims that Fresh & Easy has missed internal sales targets, analysts have questioned whether US consumers have been left unimpressed by the format, which Sir Terry Leahy, Tesco’s chief executive, has pledged will make significant inroads into the US.

In Southern California, where Tesco opened its first U.S. store last November, the LA Curbed website also ponders the store’s true motivations:

Most of the experts on the Retail Wire discussion boards seem to agree that the stop and reassessment was long overdue.

“Tesco should have called a time out before this. It isn’t the case that Fresh & Easy is doomed as a format, it’s the case that it WILL be doomed as a format if there isn’t some course correction. The stores are mis-merchandised, mis-positioned and at least some of the locations are textbook examples on how not to select a site.

All that said, Tesco has enough resources–capital and human–to make this right. It’s good business not to try to course-correct and expand at the same time.”
Ryan Mathews, Founder, CEO, Black Monk Consulting

Although the news impacts stores across the U.S., there is no specific word on whether this operational pause will delay the Fresh & Easy Willow Glen grand openings, originally scheduled for 2009.