EL SEGUNDO, CA – British-based grocery Tesco, the parent company of Fresh & Easy Neighborhood Market here, may have to shut its U.S. stores or seek multiple buyers, Supermarket News reports.

An industry source said that Tesco is already holding talks with a prospective buyer, with Tesco’s desire to avoid retaining any liabilities at its stores a sticking point. "When I heard Yucaipa was talking to Tesco, I knew it meant there were no other bidders because Yucaipa would not want to get stuck with all of Fresh & Easy's long-term leases when it already has so much debt with Pathmark and A&P," the source said, adding that Tesco’s bad locations will make it unlikely a buyer would agree to take on their leases.

The source speculated that Aldi, which has plans to enter California, might be interested in assuming the leases "because it can generate enough volume to make it work as it puts itself on the West Coast map."

Tesco operates 200 Fresh & Easy stores in California, Arizona and Nevada. It announced in April that it was treating the chain as a discontinued operation, with U.S. losses that totaled $1.8 billion for the year that ended in February.

“Leaving the U.S. is the right thing to do,” Philip Clarke, Tesco’s chief executive officer, said in April.