Tesco’s decision to retreat from its loss-making Fresh & Easy business in the US gave its shares a rare boost this week. The retailer has spent more than £1bn trying to crack the US market without ever making a profit, so news that management would be throwing no more money at it sent shares up 3.3% on Wednesday, to 337.45p.

“It adds credibility to the CEO’s promise to be capitally disciplined, and potentially brings to an end a venture for which few shareholders seemed to hold much enthusiasm,” said Barclays Capital analyst James Anstead.

There was little else in the way of good news from Tesco’s third quarter trading update. Like-for-like sales in the UK, excluding petrol and VAT, were down 0.6%, against a 0.1% increase in the previous quarter.

“There is no real evidence that management’s six-part plan to ‘Build a Better Tesco’ in the UK, which is key to share price performance, is working,” said Seymour Pierce analyst Kate Calvert.

Tesco shares are trading 17% lower than they were at the start of the year before its January profit warning resulted in a major sell-off.

Some analysts expect more bad news to come. This week, Espirito Santo published a note predicting that both Tesco and Morrisons would issue profit warnings in the next 12 months.

On Tesco, the bank’s analysts concluded from a recent survey it conducted on 2,500 shoppers that it had “taken a significant step down for perceptions of price and quality”.

Espirito Santo has ‘sell’ ratings for Tesco and Morrisons and a ‘neutral’ rating on Sainsbury’s, which it described as a “relative winner”.

This week, Kantar Worldpanel figures revealed that Sainsbury’s grew sales by 4.7% in the quarter to 25 November. It is the only supermarket of the big four to have grown its market share year-on-year (see left).

Imperial Leather brand owner PZ Cussons was the only big name in fmcg to report this week. It said sales for the half year to 30 November were “broadly flat” as a robust performance in the UK was offset by difficult trading conditions in Nigeria.

Analysts at Numis downgraded the shares from hold to reduce. The shares dropped just over 1% to 355.8p on Thursday morning.

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