Tesco, the largest grocery company in the U.K., has announced a strategic review of its loss-making United States chain Fresh & Easy which could lead to sale or closure of its U.S. operations. Tesco also announced that the head of its U.S. business and the deputy chief executive of the company, Tim Mason will leave the supermarket group after 30 years' service.
"It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate time frame in its current form," the company said in a statement. "We have therefore appointed Greenhill to assist with the review of options. In recent months, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business. We will communicate progress on this process when we present our full year results for the current financial year in April 2013."
While it said that all options under consideration, Tesco is likely to quit the US entirely. The 200-stores Fresh & Easy chain has spent nearly $1 billion on the loss-making U.S. venture since its 2007 launch and its Chief Executive Phil Clarke has been under huge pressure from investors and analyst to act. Tesco's third-quarter underlying sales growth came down to 1.8 percent from the second quarter's 6.9 percent.
Commenting on Mason's departure, Clarke said, "Tim Mason, who leaves Tesco today, has played an important part in our success over a 30 year career with the company, and he leaves with my thanks and good wishes."
