LONDON – Tesco has finally
put the nail in the coffin of its U.S. experiment with the announcement that
the U.K. supermarket chain will sell its Fresh & Easy stores, the
Press-Enterprise reports.
Analysts had been
speculating for months that Tesco would jettison Fresh & Easy after the
stores continually dismal sales. “The announcements made today are natural
consequences of the strategic changes we first began over a year ago and which
conclude today,” said Philip Clarke, CEO of Tesco, in a statement. “With
profound and rapid change in the way consumers live their lives, our objective
is to be the best multichannel retailer for customers.”
Fresh & Easy, which
has dozens of stores, mostly in Southern California, bled $1.8 billion since
its debut five years ago. “The consequences are non-cash write-offs relating to
the United States, from which we today confirm our decision to exit, and for
U.K. property investments which we will not pursue because of our fundamentally
different approach to space. We have also faced external challenges which have
affected our performance, notably in Europe and Korea,” said Clarke.
Tesco will begin looking
for a buyer to take over Fresh & Easy, which CFO Laurie McIlwee said would
take at least 90 days. Some analysts predict the chain will be split up among
several purchasers instead of being sold altogether.