It's Not So Easy for Fresh & Easy

Phoenix -- Fresh & Easy Neighborhood Market suffered heavy losses during the past year, according to the Arizona Republic, although the U.S. division of British retailer Tesco plc claimed it is gaining traction with shoppers.

Fresh & Easy, which has 172 stores in Arizona, Nevada and California, lost $307 million in the fiscal year that ended Feb. 26, up from a $253 million loss posted a year earlier. Tesco acknowledged the loss was greater than expected and attributed it to the acquisition and integration of two food suppliers, 2 Sisters and Wild Rocket Foods, according to the report.

Revenue grew 42 percent to $818 million as the company opened new stores and gained customers. Sales at comparable stores open one year or more grew 9.4 percent during the year.

"Customer feedback remains excellent and our clear objective now is to accelerate the strong growth in customer numbers we are seeing," said Tesco CEO Philip Clarke. He noted that the loss is expected to substantially narrow in the coming year as the company moves closer to break-even.

Tesco entered the U.S. in 2007 with an initial rollout of stores in metro Phoenix, Las Vegas and Southern California, with plans to have hundreds of stores open within a few years. Those plans were scaled back due to the economic downturn.

After freezing expansion last year, the company now plans to resume growing by opening 50 new stores this year.