Tesco's Fresh & Easy Could Break Even This Year
LONDON -- There may finally be a light at the end of the tunnel for Fresh & Easy, following losses of approximately $1.11 billion since its 2007 launch. Philip Clarke, CEO of British parent company Tesco plc, expects the company to break even periodically "in months of 2012 or 2013," according to media reports.
"I can see it's going to get through to break even," Clarke said in an interview with the Financial Times.
Former Tesco CEO Terry Leahy originally targeted 2013 as the year for Fresh & Easy's break-even point.
However, merely halting the company's losses isn't enough. "What I am yearning for is a day I can say not just, 'Hey do you know what, it's got to break even,' but 'Look here at the prospect of strong returns'," Clarke told the news outlet. "The only reason for having any business is that it generates a return...on investment that justifies you being there. So, first job: break even. Second job: returns."
Fresh & Easy has underwent a number of changes in recent months, including the launch of its Fresh & Easy Express format and the temporary closing of 12 underperforming locations. It has also refurbished a number of existing Fresh & Easy stores.
Clarke did not indicate when Tesco will make a final decision between committing to the United States or pursuing a sale or joint venture, according to the report.