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Whole Foods to consider acquiring Fresh & Easy stores

From MarketWatch

As Whole Foods accelerates its U.S. expansion, the organic grocery chain plans to take a “good hard look” at parts of the Fresh & Easy chain that British retailer Tesco is divesting in California, Whole Foods co-Chief Executive Walter Robb told MarketWatch.

“We will certainly be taking a look at it,” Robb said in a phone interview after the grocer’s upbeat May 7 earnings report.

He said there are no assurances Whole Foods would offer to acquire one or more of the sites.

There will be competition. Tesco said in mid-April it’s received “lots of interest” from potential buyers, with some keen on buying the entire business.

Fresh & Easy operates 199 stores in California, Arizona and Nevada.

Tesco began the building the no-frills Fresh & Easy chain in 2007, but the stores failed to gain enough traction with shoppers to justify the massive investment. Tesco plans to take a $1.8 billion charge to write off the Fresh & Easy business.

Whole Foods, bolstered by its healthy cash flows and no debt, plans to open 32 stores for its September fiscal 2013 year. In 2014, Whole Foods intends to open 33 to 38 stores.

Robb said Whole Foods is energized by the customer reception for new stores the company has opened in Iowa and other midwestern states where Whole Foods previously hadn’t set up shop.

“There is so much opportunity for us right now. I don’t see any competitor that slows us down,” he said.