United Kingdom-based Tesco Plc has shelved expansion plans for its new Fresh & Easy convenience stores in the U.S. amid growing speculation that the five-month-old venture has missed internal sales targets, reports The Guardian newspaper. Officially, Tesco is saying that new store openings are on hold for three months to allow the new business time to “settle down.”
“In a little over four months we’ve gone from a business with no stores to one with 59 – with hundreds more in the pipeline . . . So we’ve given ourselves a little bit of time to kick the tyres, smooth out any wrinkles, and make some improvements that customers have asked for,” Simon Uwins, Fresh & Easy Marketing Director, said in his blog.
Earlier in the year, Fresh & Ease CEO Tim Mason downplayed suggestions that the new venture in the U.S. was having teething problems. “Every single week brings more good news as sales, customer numbers and repeat visits are all growing,” Mason said.
In March, analysts at Goldman Sachs and U.S. brokerage Piper Jaffray downgraded their forecasts for Tesco over concerns regarding Fresh & Easy. Piper Jaffray’s Mike Dennis suggested that sales could be as little as $30 million, as opposed to the anticipated $100 million.
Last February, Fresh & Easy said it planned to have approximately 200 stores in the U.S. by February 2009. To date, the retailer has opened about 50 stores in southern California, Las Vegas and Phoenix.
