Tesco puts breaks on US roll out

Supermarket giant Tesco today confirmed it has put the brakes on roll-out plans for its US brand Fresh & Easy.

The retailer has halted the expansion of its US fledgling business for three-months after opening 60 stores across America since last autumn.

The move will raise questions over Fresh & Easy’s trading success so far with rumours circulating that the US business missed internal sales targets, according to The Sunday Telegraph.

But Tesco said it always intended to have a three-month pause to review the expansion and assured it was “very pleased with the way things are going” in America.

The US launch last November has been a significant move for Tesco, with more than £250m (€158m) put aside a year for investment into the venture.

Tesco has so far held off from providing initial sales figures, saying only at its last trading statement in January that the customer response to had been “very encouraging”.

However, the market may be given a better idea of inaugural sales when Tesco releases its 2007 results on April 15.

Simon Uwins, marketing director of Fresh & Easy, said in his company blog last week that the decision to halt expansion was a natural part of the process.

“We’ve given ourselves a little bit of time to kick the tyres, smooth out any wrinkles and make some improvements that customers have asked for.”

He added: “In nine months, we’ve gone from a project team of 200 people to a business employing nearly 2,500 people. We’ve learnt a huge amount about running the operation and talked to thousands of customers about what they like about Fresh & Easy and where they would like us to improve.”

The first Fresh & Easy stores were launched in Los Angeles, Phoenix, Las Vegas and San Diego.

The chain is aimed at local customers, with smaller stores selling a large proportion of own-brand convenience foods.