Five years after launching the Fresh & Easy grocery chain in the United States, British-based global retailer Tesco is exiting the US marketplace.
Tesco's April 17 announcement confirms speculation that the British supermarket giant was conducting a strategic review of Fresh & Easy and its 200 stores in California, Arizona and Nevada.
The chain reportedly failed to make any money during its run, losing more than $1 billion since opening its doors. To abandon the project, Tesco will take a write-off of 1.2 billion pounds — or $1.8 billion.
“Based on our progress so far with our strategic review of Fresh & Easy, including the indications of interest received from third parties, we have confirmed that the outcome of the review will be an exit from the United States,” Tesco reported in an April 17 earnings report.
Fresh & Easy, a unique neighborhood market store concept that was geared to making fresh food shopping more convenient and affordable, posted an April 17 message to customers on its website.
“As many of you have heard or read today, our parent company Tesco updated on the future of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business. We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy.”
Tesco is one of the world's largest retailers employing over 520,000 people with over 6,700 stores in 12 markets and serving millions of customers every week.
Said Philip Clarke, Tesco Chief Executive, “The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today. With profound and rapid change in the way consumers live their lives, our objective is to be the best multichannel retailer for customers.
“Our plan to 'Build a Better Tesco' is on track and I am pleased with the real progress in the UK. We have already made substantial improvements to our customers' shopping experience, which are starting to be reflected in a better performance.
“We have set the business on the right track to deliver realistic, sustainable and attractive returns and long-term growth for shareholders. The consequences are non-cash write-offs relating to the United States, from which we today confirm our decision to exit, and for UK property investments which we will not pursue because of our fundamentally different approach to space.”