Tesco said it will likely leave the US after announcing a review of its Fresh and Easy unit in the country and the departure of the unprofitable business’s head.
All options are being considered for the US chain and investment bank Greenhill has been hired to assist with the review, Tesco said today as it reported that a sales decline resumed in the UK in the third quarter.
Some analysts have questioned the viability of Fresh and Easy, in which Tesco has invested £1 billion (€1.2 billion) and which hasn’t made a profit since it was formed. The unit’s loss narrowed by 1.4 per cent to £74 million in the first half of Tesco’s financial year.
In April, chief executive officer Philip Clarke pushed back a goal for Fresh and Easy to reach breakeven until fiscal 2013 and vowed to slow store openings and focus on getting each store to profitability.
“It is now clear that Fresh and Easy will not deliver acceptable shareholder returns on an appropriate timeframe in its current form,” Tesco said in a statement. – (Bloomberg)
