Tesco is again slowing down the US rollout of Fresh & Easy, with the supermarket giant delaying its expansion into North California as it wrestles with the economic downturn.

Fresh & Easy chief executive Tim Mason told The Times that the UK's biggest retailer was pushing back its target to have 200 Fresh & Easy outlets by February 2009 to a new deadline of November next year.

"The industry is in a very different place [from] when we came out and did the feasibility research three years ago," he said. "In October, the US consumer confidence index was the lowest it has been since 1967. We will still open stores every week, but it's prudent to slow things down a bit."

Mason added: "There's a big cost step for us when we open up northern California and we can be quite flexible about when we do that. As things get to a point that we like how it's all coming together, we like the way the stores are growing into the second year, then we can accelerate. If the economy takes a turn for the worst, it would be unwise to accelerate."

The rollout of Fresh & Easy was initially halted for three months last March to take stock and make tweaks. It has since put more emphasis on price promotions, added one or two new brands to the offer, while also working to make the stores less sterile.

The news comes after Tesco yesterday announced plans to step up its expansion in China despite a slowdown in sales across its South Korean arm – the retailer's largest market after its UK heartland.

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