Fresh & Easy Sees Profits in Near Future
Fresh & Easy is keeping its talking points succinct
and positive. Consider the latest pronouncements from Tesco, the chain’s parent
- Total sales and same-store numbers are up, albeit off a low base.
- Store count at the chain is expected to go from under 170 locations today
to 400 by 2013. The company plans to open an average of two new units a week
until it reaches its goal.
- Sir Terry Leahy, Tesco’s current CEO, says Fresh & Easy will be profitable
- Philip Clarke, Tesco’s CEO in-waiting, says there is no need to do a review
of the U.S. business despite some bumps in the road Fresh & Easy has
hit since it opened in 2007.
Many analysts agree that while Fresh & Easy may still face challenges, it
has deep enough pockets to make it. An indication of that may be found in Tesco’s
announcement that it “mothball” 13 stores.
According to Tesco, the
Fresh & Easy locations were in areas hardest hit
by the “residential and commercial property crash … The expected population
growth in these neighbourhoods has simply not materialised and we’ll
re-open these stores when the housing and employment markets pick up.”
Discussion Questions: Has Fresh & Easy turned the corner in the U.S.?
Do you believe it can profitably sustain its projected growth rate?
- Statement of Results – 26 Weeks Ended 28 August 2010 – Tesco PLC
- Fresh & Easy closing store – The Press-Enterprise
- Tesco unveils US food chain expansion – The Telegraph
- Tesco Signals It Will Push Ahead in U.S. – The Wall Street Journal
- Tesco half-year profits up on international growth – International Business