The Los Angeles Times reports this morning that Tesco, which reported its financial results this week, has put the projected losses for its US Fresh & Easy Neighborhood Markets division at $259 million – or about $2 million for each of its 130 stores.
In addressing the losses, Tesco CEO Terry Leahy is said by the Times to have put a “chipper spin” on the numbers, saying that “we have been making good progress in developing the Fresh & Easy business, despite the prolonged weakness in the California, Nevada and Arizona economies.” Leahy also said that the company is tweaking its approach in response to customer feedback.
In addressing the losses, Tesco CEO Terry Leahy is said by the Times to have put a “chipper spin” on the numbers, saying that “we have been making good progress in developing the Fresh & Easy business, despite the prolonged weakness in the California, Nevada and Arizona economies.” Leahy also said that the company is tweaking its approach in response to customer feedback.
- KC's View:
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I agree with what industry analyst Bill Bishop tells the Times - that despite the missteps, Tesco has deep enough pockets to keep investing in getting Fresh & Easy right…and that it will be deemed a smart move if, a few years from now, it has 2,000 stores in the US and dominates the small-store grocery business.
That’s not to say that this necessarily will happen. But Tesco has the money and marketing intelligence to ride out the tough times…which isn’t easy when most of its stores are in a state, California, that seems to get more bad economic news every day.
I’m not ready to write off Fresh & Easy yet.
