• by Sarah Mahoney  @mahoney_sarah, February 24, 2009

Rolling out a new retail supermarket brand is never easy, and it looks like the recession may have Tesco rethinking the positioning behind its Fresh & Easy Neighborhood Market.

"We may have assumed that certain elements of the Fresh & Easy brand would do the work for us, and we would not have to go down and dirty on price. That may have been a mistake," says Tim Mason, Fresh & Easy's CEO, in London's Sunday Times. "There's less loyalty in the American market. A Brit has to hear it a few times before you accept that people make up their mind where to go each week when they check out the special offers round the kitchen table."

In an interview with Supermarket News, a Fresh & Easy spokesperson says the remarks were taken out of context, and that "Fresh & Easy is continually evolving."

Britain's Tesco hatched the Fresh & Easy concept, based on extensive research on the West Coast, as a convenient alternative to supermarkets, focusing on its high-quality produce and prepared foods. But since launching its first Fresh & Easy in November 2007, there have been seismic changes in U.S. food-buying behavior, as more consumers--squeezed by rising food and fuel prices--have switched allegiance to supercenters, intensified their use of coupons and store fliers, and switched to more private-label goods.

Fresh & Easy--which now has more than 100 stores open on the West Coast, although it has slowed its ambitious expansion plan--has responded by continually offering lower prices. For example, earlier this month, it said its new 98-cent product packs sparked an 11% increase in its produce sales: "This sharp increase in sales shows people are continuing to look for ways to stretch their budgets while seeking out quality items."