Tesco to focus on profitability before U.S. expansion
LONDON — The break-even forecast for the U.S. division of Tesco has been pushed back to early next year, the U.K. retail giant announced in its fiscal-year results.
The company noted its projected break-even for its U.S. unit Fresh & Easy now will be later than its earlier guidance because "[we] intend to focus on delivering store level profitability first, before pushing on faster with the expansion we need to create sufficient scale to cover our overheads." Fresh & Easy — which operates stores across Arizona, California and Nevada — however, showed "promising results" in the fiscal year ended Feb. 25, with an 18% drop in losses against last year, along with delivering a sustained improvement in same-store sales throughout the year, Tesco said.
U.S. sales for the 2011-2012 financial year totaled about $1.02 billion and ended the financial year with 185 stores and expects to end the current financial year (ending February 2013) with 230 stores.
"The U.S. is moving in the right direction, but I'd like it to move faster," Tesco CEO Philip Clarke was quoted as saying. "I need to demonstrate to shareholders, who have been very patient with us, that we can do it."