Tesco's Fresh & Easy US convenience chain is proving it can compete on price with the US big boys. Despite the average Fresh & Easy store being just 10,000 sq ft, a survey by The Grocer revealed that more than half the products in a 10-item basket were cheaper than at a 180,000 sq ft Wal-Mart in Las Vegas. It was also competitive against 294-store chain Trader Joe's and Kroger-owned Ralphs Fresh Fare, which has similar-sized stores to Fresh & Easy. Of the four chains, Fresh & Easy provided the cheapest bagels, bananas, Monterey Jack cheese and freshly squeezed orange juice. On a half-gallon of 2% milk, Fresh & Easy was second-cheapest, behind Ralphs Fresh Fare. "I found the prices were pretty good, although I did find it more expensive on milk," said Tina Campbell, who was shopping with her young family at the Eagle Rock store in Los Angeles. "This store is definitely different and has more healthy food than other stores." Her partner was also very impressed with the price of beer. Fresh & Easy chief executive Tim Mason said the chain probably had the lowest operating costs of any grocer in the world . The chain's mantra is to provide "Whole Foods-quality food at Wal-Mart prices". A Fresh & Easy has 3,500 SKUs compared with 35,000 in an average-sized US grocery store, allowing the chain to offer suppliers high-volume contracts and consumers low prices. All but the leading brands in each category have been "edited out". "I would describe us as a discounter and I'm proud of that," said Fresh & Easy chief commercial officer John Burry. "But we are a 21st-century discounter. We are bringing down price while offering top quality. We want to change the belief that high prices mean high quality and low prices mean low quality." Burry said all own label products were benchmarked against high-end grocers Whole Foods Market and Trader Joe's. The Grocer survey tallies with a Citigate analysis of 50 items, which indicated Wal-Mart was 3.5% cheaper than Fresh & Easy. That price differential would be indiscernible to consumers, said Citigate analyst James Anstead. Analysis p28