WASHINGTON — An investment group that works with union-sponsored pension and benefit funds affiliated with Change to Win, a coalition of U.S. unions, is asking shareholders of Tesco to demand greater transparency in the operations of Fresh & Easy Neighborhood Market, Tesco's U.S.-based division.
Their request is in the form of amendments to the report of Tesco's directors that will be presented at the parent company's annual meeting in London on June 29. According to a report filed by Change to Win Investment Group, "Management's optimistic outlook that Fresh & Easy is 'on track for another significant reduction' in losses this year is difficult to evaluate when investors do not have information on cost of sales or operating expenses.
"Some shareholders have already called for Tesco to exit the United States. Others have called for a definitive decision to be made on the future of the U.S. operations. To answer these concerns, some members believe a higher degree of transparency is necessary and that a committee of non-executive directors should review the current strategy and issue a report that discloses the metrics and timeframe the board will use to evaluate Fresh & Easy's future performance."
The group is also asking shareholders to support the idea that Tesco "cannot reasonably predict a break-even point at this time" and that it needs to address "challenges of scale and operational execution before we are confident about the outlook for Fresh & Easy."
Tesco was quoted in the Financial Times of London saying: "This proposal is union motivated and follows several years of union opposition in the U.S. Change to Win is not a shareholder and does not speak for shareholders. Fresh & Easy continues to grow and innovate and … we are confident the business is moving in the right direction."