Supply Scan

News and Trends from Across the Food Supply Chain

Sysco Builds High-Tech Facility In Houston

Food distributor Sysco Corp. is selling its storage warehouse located off Interstate 10 East in Houston and building a state of the art facility nearby.

The facility will include an advanced European system to store and retrieve boxes. It will also have a test kitchen where customers can observe demonstrations by a team of chefs, review products and get food-industry consultations from experts. The building will also incorporate energy-saving features such as a high-efficiency refrigeration system, recycled materials, motion-controlled lighting and solar power.

It will feature 585,000 square feet of refrigeration, dry warehouse, freezer and administrative space, a significant increase over the 350,000 square feet of space the company now has.

"We've just outgrown our existing facility and we have no room for expansion,'' notes Keith Miller, president and CEO of Sysco Food Services of Houston. "Our customer base has grown substantially over the years.''

Construction on the building is expected to start in the next few months and will take more than one year to complete. The Sysco board has approved the project, but Miller would not reveal its cost. Sysco said the company is not receiving any tax abatements for the property.

The general contractor on the project is Big-D Construction out of Salt Lake City and the architect is Architectural Nexus.

Tesco's Fresh & Easy: A Threat To Retailers?

Tesco has opened the doors of its first Fresh & Easy stores in the U.S.

Fresh & Easy's convenience-focused format potentially represents a significant threat to the U.S. food retailing industry as the concept offers smaller stores, easy access, more ready meals and "grab-and-go" items. Rapid expansion across the U.S. will be a key sales driver for the retailer.

By 2011, TNS Retail Forward, a Columbus, OH-based consulting firm, estimates that Tesco could be a $4 billion retailer in the U.S., with 500 stores. And, sales could reach $10 billion by 2015, positioning Fresh & Easy among the top 10 supermarket retailers in the country.

Fresh & Easy's store format fulfills several different shopping modes and occasions. These include fill-in trips, immediate consumption and quick replenishment. TNS Retail Forward believes Fresh & Easy's small-size advantage gives it the opportunity to almost double space productivity per-square foot, compared with U.S. supermarket industry averages.

The average size of a U.S. supermarket is more than three times the size of Fresh & Easy's 10,000-square-foot stores. TNS Retail Forward predicts that Fresh & Easy could generate sales of $900 per-square foot per-store, nearly twice the supermarket average.

"The combination of Fresh & Easy's smaller stores, self-service tills and ready-to-cook meals has direct appeal among U.S. shoppers whose primary concern is convenience," says Jennifer Halterman, senior consultant at TNS Retail Forward.

"There is demand for this type of concept and we expect other U.S. retailers to be watching Tesco closely for ideas on how to tap into this buoyant market. Fresh & Easy's smaller store size gives it an ideal formula to replicate quickly throughout the United States."

Fresh & Easy stores also aim at a variety of shopper segments. They attract the value shopper through affordability, as well as the upscale shopper through a gourmet offer. Unique merchandising and marketing tactics also give shoppers inspiration on how to pull together quick and easy meals that appeal to a variety of tastes.

"The biggest driver of the Fresh & Easy philosophy is the prepared foods selection, with stores dedicating a quarter of their 'fresh' area to these products," says Mary Brett Whitfield, senior vice president with TNS Retail Forward and director of the Retail Forward Intelligence System.

Canadian Retailer Selects GPS Fleet Solution

Canadian food retailer Sobeys Inc. is implementing Safefreight Technology's trailer temperature monitoring and GPS fleet management solution.

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