Tesco’s US operation, Fresh & Easy Neighborhood Markets, is reportedly planning to slow the rate of its US expansion as a result of current economic conditions.

The UK retailer, which entered the US late in 2007, has made aggressive expansion a priority over the past year, opening 106 stores in and around Los Angeles, San Diego, Las Vegas and Phoenix.

Further expansion had been initially planned for the first half of 2009, but company spokesman Brendan Wonnacott told The Packer that the strategy had been scaled back.

“The initial plan was to ramp up the store openings in the second half of the fiscal year, but given the current economic situation, we felt it would be more prudent to continue to open stores at the pace we have been,” he said.

Separately, Tesco has reached an agreement with pharmacist Walgreens for Fresh & Easy to share a former Albertsons store in Danville, California as part of the retailer’s plans to increase its presence in the northern half of the state.

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