Tesco is to launch a review of its loss-making US operations as its chief executive attempts to convince the City that he has a credible strategy to boost the fortunes of Britain’s biggest retailer.
Latest : Tesco’s US chief Tim Mason quits as retailer reviews Fresh & Easy sale or closure
They have taken over the UK but couldn’t crack the US – Tesco pull out of America to the sum of £1billion !!- thetimes.co.uk/tto/business/i…
— AndrewPittendreigh (@aj_pittendreigh) December 5, 2012
Philip Clarke will announce today that Tesco is to undertake a strategic review that could lead to the sale or closure of some or all of its US stores. Investment bankers have been appointed to assist with the review, which is expected to take several months.
The statement will signal an ignominious end to Tesco’s US ambitions, five years after it opened its first shop there under the Fresh & Easy brand name.
It will also cast a pall over the legacy of Sir Terry Leahy, Mr Clarke’s long-serving predecessor, who stepped down last year. Under Sir Terry, Tesco embarked on a plan to emulate the global footprint of Wal-Mart, the owner of Asda, by acquiring and building market share in eastern Europe and Asia.
Tesco operates approximately 200 Fresh & Easy stores, and employs roughly 5,000 people in the US. Since the business was launched, it has accumulated losses running into several hundred million pounds.
Mr Clarke is already under pressure because of the group’s sluggish performance in its home market, and has unveiled a £1bn transformation programme focused on improving customer service and the availability of fresh produce in its shops.
The news about the US review come alongside Tesco’s third-quarter results, which are expected to reflect the ongoing travails of much of the British retail sector.
George Osborne, the Chancellor, will undoubtedly be keen to see what Mr Clarke says about the health of the high street in the run-up to the crucial Christmas trading period as he makes final preparations for his Autumn Statement.