Tesco Set to Call Time on Its American Dream

Britain's Tesco, the world's No. 3 retailer, has launched a strategic review of its loss-making United States chain Fresh & Easy that could lead to a sale or closure of the business.

Published

7 months ago

Categories

Finance

Topics

United States

People

Bryan Roberts, Philip Clarke

Places

United States of America, United Kingdom

Companies

Tesco Plc, Fresh & Easy, Kantar Retail

Transcript

It's the world's third biggest retailer and the UK's number one. But success in the US has alluded Tesco. Fresh and Easy has never made a profit and now Tesco has called for a strategic review into what went wrong. Kantar Retail's Bryan Roberts says timing was key. SOUNDBITE: Bryan Roberts, director of retail, Kantar Retail, saying (English): "They announced plans to move into the States in 2006 and started establishing the infrastructure shortly afterwards then in 2008 the financial crisis hit and Tesco found itself with some of the worse effected areas by the subprime crisis mainly California and Arizona." Tesco has spent nearly 1.6 billion dollars on its American dream. A huge investment for zero return. News that it might pull out of the US around April next year was enough to boost shares by 4 percent. And its not the first European retailer to have failed to crack America. SOUNDBITE: Bryan Roberts, director of retail, Kantar Retail, saying (English): "Auchen, Carrefour, two of the French businesses that failed there. But I think it's worth remembering that Sainsbury's for example did a very good job with Shaws in the north east of the USA and only pulled out to re-focus on a very troubled domestic business." CEO Philip Clarke says finding a solution to Fresh & Easy will allow Tesco to focus on other parts of the business. And there's some speculation the possible opening up of the retail sector in India could offer that new direction.