Tesco announced it is withdrawing from the U.S. market

By Rita Jane Gabbett on 4/18/2013

http://www.meatingplace.com/

U.K.-based food retailing giant Tesco announced it is withdrawing from the U.S. market and is selling the assets of the Fresh & Easy grocery chain it started in the western United States in 2007.

In a blog on the company’s website, Tesco Chief Executive Philip Clarke explained how the chain it started in California, Arizona and Nevada suffered from the subprime mortgage crisis and could not recover despite investing over $1.5 billion building stores and distribution centers.

The announcement coincided with Tesco’s full-year earnings results, which showed a 96 percent drop in profits, following a writedown from the Fresh & Easy exit.

“We entered the U.S. in 2007. At the time, the three states we were in — California, Arizona and Nevada — were the fastest growing in the U.S. Two years later, they were the worst performing, having been hit hard by the subprime mortgage crisis,” Clarke wrote in his blog. “Faced with a choice of investing further or selling up, we have chosen to sell up and to focus future investment in areas where we can deliver greater returns.”

Clarke said the sales process is “well-advanced," but not finished, including some leases it could not break.  “We should recover some of the capital when we agree a sale of the assets but for now we are writing it all down,” he wrote.  

In January 2013, there were 200 Fresh & Easy stores in the three states