UK retail giant Tesco, which tomorrow (21 April) reveals its full-year results for 2008, is expected to confirm that its US-based Fresh & Easy neighborhood operation will fail to break even again in 2009 having made losses of around £100m (US$148m) last year.
According to a report in The Guardian, the retailer will confirm that is is abandoning plans to further expand the US store network to a profitable state during in the annual report, which is also expected to reveal record profits of £3bn (US$4.44bn).
Fresh & Easy boss Tim Mason has attributed the slowdown in store openings to the current global economic crisis, with the key areas in the US that Tesco launched in – southern California, Las Vegas and Phoenix – proving to be some of the worst hit financially.
In January, the retailer launched a special US$0.98 range of produce which have been said to increase sales by 11 per cent – a move which has led to Mr Mason admitting market research done before the US launch may have been flawed.
Elsewhere, however, international sales have proved more profitable, with the group expected to emphasise the strength of operations in South Korea and China in particular during its results announcement.
In an interview with the Financial Times, Tesco's head of international operations Philip Clarke pointed to these as the group's most promising markets, with 100 new convenience stores expected to open in South Korea by the end of the financial year.
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