LONDON – Tesco's billion pound gamble to crack the United States may have only months to run as investors and management focus more squarely on the British retailer's struggling home business and slowing growth in emerging markets.
Fresh & Easy (F&E), having absorbed nearly 1 billion pounds ($1.6 billion) of capital since its 2007 launch, remains stubbornly loss-making in the cut-throat U.S. grocery market where it competes with larger rivals Trader Joe's, Ralphs , Whole Foods Market and Vons.
Earlier this month Tesco, the world's No. 3 retailer, posted its first profit decline in nearly 20 years that reflected investment to address a loss of share in the UK as well as underlying sales declines in South Korea and eastern Europe.
At the same time F&E, which trades from 199, mainly leasehold, stores in California, Arizona and Nevada, posted first-half losses of 74 million pounds, similar to last year.
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