EL SEGUNDO, Calif. — Fresh & Easy Neighborhood Market here said Monday it is continuing to strive to build sales and profits, despite published reports from the United Kingdom that parent company Tesco may be close to shutting down the U.S. operation.
"We continue to move forward on building a stronger Fresh & Easy and getting the existing stores to profitability," a company spokesman told SN.
In a report from Reuters, one of Tesco's top 25 shareholders — who was not identified — said, "We never liked the U.S. expansion, never thought it would work and never believe it will work, so the sooner they acknowledge this and exit F&E, the better."
The Reuters report quoted one London-based analyst saying, "We think the deadline [for a final decision on Fresh & Easy's future] is the prelims [Tesco's annual results] in April," while another analyst was quoted as saying, "It seems [Tesco] is preparing to exit."
Read more: Tesco Trims U.S. Investment
For the first half, which ended Aug. 25, Fresh & Easy had a loss of $118 million (U.S.), compared with $119 million during the first half the year before, while sales at the 199 stores rose 16.4% to $586.7 million and same-store sales rose 5.2%. Philip Clark, Tesco's chief executive officer, said comps picked up in the second quarter, “but they were weighed down by a disappointing first quarter.”
The company said 55 of its U.S. stores were cash-positive, "[and] we expect an increased number of stores to cross over into positive territory in the second half." The company also said it planned to constrain capital investment during the second half.
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