Tesco played down criticism of its 55-strong Fresh & Easy Neighborhood Market chain this week, as it forged ahead with expansion of the business.

The retailer revealed plans for stores in 19 new locations in the Sacramento region of California - as yet virgin territory for the chain.

Announcing the news, chief executive Tim Mason defended the performance of the new chain after speculation that sales had disappointing.

Earlier this week, Piper Jaffray analyst Mike Dennis sent a note to clients after a trip to the US suggesting each store was averaging sales of $170,000 a week against initial targets of $200,000. He said that he believed fresh food sales had only marginally underperformed - but that dry grocery, frozen and beers, wines and spirits had fallen 15%-20% below budget.

But Mason insisted: "We have been very encouraged by the response to our stores thus far."

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