Tesco backing off on US expansion
Tesco, whose stock has fallen 18% since the start of this year, has put the expansion of its Fresh & Easy stores in the US on hold for three months. Tesco opened its first US store last November and planned to add 200 US stores by February 2009.
Tesco's decision "clearly means the performance hasn't been stellar," said Christopher Hogbin, an analyst at Sanford C. Bernstein in London. Tesco spokeswoman Lisa Kavanagh said the US chain is performing in line with company's forecast. However, Tesco's 59 Fresh & Easy convenience markets are averaging about US$60,000 per week in sales, well short of the US$200,000 a week target.
Simon Uwins, Fresh & Easy marketing director, commenting on Tesco's actions, wrote on his Web log: "We've opened 31 stores in 66 days so far this year, now we're pausing for breath. The next three months will allow us to accelerate this process, before we restart what's been described as an opening program on steroids.''
The UK-based supermarket chain, which controls a third of the UK grocery market, also owns stores in emerging markets from Turkey to Malaysia and makes more than 25% of its sales outside Britain. Tesco also plans to open stores in Russia, according to real-estate advisers who have held recent talks with the retailer.
