Shares in Tesco fell 6.5p to close on 320.5p yesterday after the City reacted to the retail giant’s plans to enter the US market in 2007.

The supermarket group yesterday revealed that next year it plans to open convenience store formats similar to Tesco Express on the west coast of the country.

It is ploughing £250m a year into the format, which will be led by Tim Mason, currently Tesco's marketing and property director.

Despite months of speculation, first revealed by The Grocer in May last year, the City reacted with surprise that Tesco was making the move.

Analysts were concerned that Tesco had failed to provide details of the plan, including the location, size, offering, or even name of the stores.

They also pointed out that Tesco has no brand, customers, or distribution network in the US.

Jonathan Pritchard, from Oriel Securities, said: “This is not the country to go in and say ‘trust us’ given how many companies have gone to the US and failed.”

However, others were more upbeat. Philip Dorgan, from Panmure Gordon, said: “For Terry Leahy to come across so confident when he normally likes to downplay things means they think they are on to something.”