(Note: This post was updated after comments from Fresh & Easy.)
Cheerio, Fresh & Easy? British conglomerate Tesco announced this morning it is pulling out of the U.S. market, putting the future of its 199 Fresh & Easy stores in Arizona, California, and Nevada in jeopardy.
Tempe, Chandler, Gilbert, and Mesa are among East Valley cities with Fresh & Easy stores, which were an ambitious move by Tesco, one of the largest retailers in the world, to enter the U.S. grocery market in 2007. Instead, it now will take a $1.8 billion write-off.
Analysts have blamed a variety of factors for Fresh & Easy’s problems, including confusing self-checkout lines, a lack of coupons, and too much competition.
Several hours after Tesco’s announcement, Fresh & Easy posted a Facebook message to its customers:
We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy. While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business.
The optimism may be short-lived. Thanks mostly to Fresh & Easy, Tesco just reported its first drop in profits in nearly 20 years – a whopping 96% decrease from $4.3 billion last year to just $183 million this year.
