When Tesco begins opening its first stores in the western United States next year, according to a report in the Financial Times they will be units of about 15,000 square feet, will sell both fresh foods and prepared meals, and will be located, to begin with, in Los Angeles and Phoenix.

The name of the stores, according to reports, will be "Tesco Fresh & Easy."

However, even as these reports are gaining wide circulation, Tesco is cautioning that they should not be taken as gospel. PlanetRetail.net reports that the company is describing the stories as "speculation and rumor and a lot of it is inaccurate." The company released a statement yesterday: “As we have said before we want to ensure that US consumers get to hear about the stores first so we will tell you more when we are ready.”

So there.

The FT story also says that Tesco has established a US headquarters in El Segundo, California, near Los Angeles International Airport, and expects to have distribution centers in Ontario, California, and near Phoenix. Tesco reportedly already is advertising for in-store and support personnel, including a human resources person who can implement the company's culture while "keeping things simple," and a research and development director in charge of creating and sourcing private label products. The ads also say that Tesco is “preparing to launch an unprecedented retail food business in the LA and Phoenix areas."

The UK's This Is Money reports that Tesco in part is using the successful Trader Joe's model as a foundation for its own US plans; the Fresh & Easy stores would be a little bigger than the Tesco Express c-stores it operates in the UK, though smaller than the traditional conventional US supermarket.

It was back in February that Tesco announced that it would invest as much as $400 million (US) a year to grow its American operation, and expressed confidence that it could be profitable within two years. Its first US unit is scheduled to open in early 2007.

KC's View: The choice of Los Angeles and Phoenix for Tesco's first stores is intriguing, in part because they both have a number of Safeway stores – and Tesco has invested more than $40 million in GroceryWorks.com, owning 35 percent of Safeway’s online grocery business. In addition, Kroger is a major player in Southern California with its Ralphs stores…and Kroger is a major client of Dunnhumby, the data consultancy, in which Tesco has an 84 percent ownership stake.

Furthermore, both markets are extremely competitive…but we'd guess that Tesco likes the fact that both probably have population demographics that will be open to its particular offering.

While Tesco may be looking at Trader Joe's as a kind of role model, we probably should make the mistake of thinking that its stores will be much like Trader Joe's – which do not have an enormous fresh food offering. They're going to be something completely different.

Then again, maybe this is all idle speculation about inaccurate facts, and that we'll learn what's going on when Tesco is good and ready to tell us.