Checking out

5 December 2012 By Robert Cole Follow @RobertCole7

The UK-based supermarket group has finally admitted that its American dream has gone sour. But the likely exit from the U.S. will focus investor concern on a much bigger issue: the health of its core grocery business in Britain and its hotchpotch of other international markets.

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Sales at Tesco, the UK supermarket group, increased by 1 percent in the 13 weeks to Nov. 24. Excluding revenue from fuel, and ignoring exchange rate effects, sales rose 2.9 percent. Like-for-like sales in the core UK business, which accounts for nearly two-thirds of overall revenue, fell 1.2 percent in the third quarter. In the second quarter like-for-like revenue was 0.8 percent lower.
The company also said, on Dec. 5, that it has appointed Greenhill, the financial adviser, to assist with a review of Fresh & Easy, its small U.S. venture. Tesco said it had received a number of approaches from parties interested in acquiring all or part of Fresh & Easy, adding: “It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate timeframe in its current form.”
Tim Mason, the Fresh & Easy CEO, is to leave Tesco after 30 years service with Tesco.
Shares of the company rose 3.2 percent in early trading on Dec 5.

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