TESCO yesterday shut the door on its loss-making move into the US after completing the sale of its Fresh & Easy business to American billionaire Ron Burkle’s investment firm Yucaipa.
The sale of 150 Fresh & Easy stores to Burkle’s Yucaipa cost Tesco £150m – including an £80m loan to the new business and £70m of additional costs for closing the 50 stores the US firm didn’t want to buy.
This was on top of a £1.2bn writedown announced by Tesco boss Philip Clarke in April, when he confirmed plans to exit the loss-making US venture.
Clarke’s decision to exit the States – one of his predecessor Sir Terry Leahy’s most ambitious projects – is part of a series of moves by the supermarket giant to reposition its overseas businesses and put its UK arm back on track.
However, Tesco’s half-year results next Wednesday are expected to highlight the substantial troubles Tesco continues to face both in its home market and overseas.
“We expect a sequential worsening in group like-for-likes, driven by the UK, where the July weather effect that helped second quarter sales disappears, and Asia,” JP Morgan analysts said yesterday, predicting a 1.3 per cent fall in UK like-for-likes.