by Christopher Freeburn | December 5, 2012 10:26 am
Britain’s Tesco (PINK:TSCDY) is considering whether to sell or shutter its U.S.-based chain of Fresh & Easy supermarkets.
Launched five years ago in a bid to establish a beachhead in the U.S. market, the 200 Fresh & Easy stores have consistently lost money, Reuters noted.
Tesco has invested $1.6 billion in the unit since 2007. The company indicated that a number of other companies had expressed interest in acquiring the Fresh & Easy chain.
A Tesco executive said that it would take “too long” for the stores to ultimately produce a profit. The company is reviewing Fresh & Easy operations and will likely withdraw from the U.S. market. It plans to refocus its efforts on more profitable regions and bolster operations in its home territory where its sales are under pressure. Earlier this year, the company admitted that its previous expectation for Fresh & Easy growth had been overly optimistic.
Shares of Tesco rose almost 3% in Wednesday morning trading in New York.
Tesco competes globally with Wal-Mart (NYSE:WMT) and France’s Carrefour. The Fresh & Easy chain has about 5,000 U.S. employees. It’s U.S. rivals include Wal-Mart and Whole Foods Markets (NASDAQ:WFM).
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