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Tesco US Fresh & Easy debacle gets worse Tesco US Fresh & Easy debacle gets worse
(7 days later)
Tesco's miserable investment in its US Fresh & Easy chain is ending in miserable fashion: the "buyer" is Ron Burkle, but the billionaire will not have to dip into his considerable fortune to complete the deal because Tesco is giving away the business with an £80m ($125m) loan. Tesco could not even persuade Burkle to take all 200 stores. He has picked 150; Tesco will bear the cost of closing the others.Tesco's miserable investment in its US Fresh & Easy chain is ending in miserable fashion: the "buyer" is Ron Burkle, but the billionaire will not have to dip into his considerable fortune to complete the deal because Tesco is giving away the business with an £80m ($125m) loan. Tesco could not even persuade Burkle to take all 200 stores. He has picked 150; Tesco will bear the cost of closing the others.
The supermarket giant has wasted almost £2bn on Fresh & Easy, counting investment and trading losses, since 2007. The harder-to-quantify expense is the loss of competitiveness in the core UK business, which the chief executive, Philip Clarke, has been trying to correct since the profits warning in January last year. The two are connected, as the former chairman Lord MacLaurin pointed out in June in his damning analysis of the "sad" legacy left by his successor, Sir Terry Leahy. "It's unforgivable that he took money out of the UK business and allowed it to flounder when our rivals were catching up and expanding," said MacLaurin. Quite.The supermarket giant has wasted almost £2bn on Fresh & Easy, counting investment and trading losses, since 2007. The harder-to-quantify expense is the loss of competitiveness in the core UK business, which the chief executive, Philip Clarke, has been trying to correct since the profits warning in January last year. The two are connected, as the former chairman Lord MacLaurin pointed out in June in his damning analysis of the "sad" legacy left by his successor, Sir Terry Leahy. "It's unforgivable that he took money out of the UK business and allowed it to flounder when our rivals were catching up and expanding," said MacLaurin. Quite.
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