Tesco’s determination to crack the US market is set for a new test, with Californian legislators poised to toughen up laws controlling the sale of alcohol.
With lawmakers in California considering whether to ban consumers from buying alcohol at self-service tills, analysts last week kicked off a new round of speculation over the future of Tesco’s loss-making US arm.
MF Global said the law change would further threaten margins at Fresh & Easy and could signal “the beginning of the end” for Tesco’s American dream.
Most of Tesco’s US stores are in California. The chain’s losses climbed to more than $300m last year. It is unlikely to break even before 2013.
Fresh & Easy opens first stores in northern California (4 March 2011)
Sales are great, but will Fresh & Easy really break even by 2013? (analysis; 11 December 2010)