Tesco boss Philip Clarke today revealed it was ”likely” the retailer would quit the US, after announcing a strategic review of its struggling Fresh & Easy chain and the immediate departure of its CEO Tim Mason.
Mason’s exit, after 30 years at Tesco, came as the supermarket giant claimed to have had several approaches from potential buyers of the business or joint backers.
However, outright closure of the chain is also a strong consideration, admitted Clarke.
He said he had decided it would have been “inappropriate” for Mason, the latest in a string of senior figures to leave the retailer, to head the review.
“We’ve now concluded that Fresh & Easy is not going to deliver acceptable shareholder return in its current form,” he added.
“We’ve had a number of approaches from potential buyers or partners.
“It might lead to us selling Fresh & Easy, it might lead to us closing it down.
“It’s likely, but not certain that our presence in America will come to an end.”
The results of the review will be announced in April and Tesco has appointed advisers Greenhill to assist with the process.
Fresh & Easy’s like-for-like sales performance fell below 2% in today’s Q3 results and Tesco also admitted previous measures to concentrate on increasing profitability by slowing down its expansion plans were not enough to satisfy its investors.
Meanwhile UK like-for-likes excluding petrol and VAT fell 0.6%. However Clarke pointed out that like-for-like food sales were up 1.2% and online grocery sales has climbed 15% in the quarter.
He said the £1bn UK turnaround plan was beginning to reap rewards with Tesco’s offer “significantly stronger” in the run up to Christmas than last year, backed by its new heavyweight advertising campaign.
“I’m really pleased about the performance of food. The offer is improving and customers are starting to respond,” he added.