Investors pressuring Tesco to pull back on its Fresh & Easy U.S. venture, focus on core U.K. supermarket business; Tesco spokesperson says company 'has a clear target to break even in America'

LOS ANGELES , April 9, 2012 (Industry Intelligence) – Tesco's third-largest shareholder, Legal & General Investment Management, is pressuring Tesco Plc to focus more on its British supermarket business and less on its U.S. and banking operations, The Guardian reported April 8, citing a report in The Times (London).



Richard Black, fund manager at L&G, which owns a 4% stake in Tesco, said the company "needs to think long and hard about what it wants to be. Can it be everything to everyone, or should it focus on its gem, the British grocery business? Of course, this is likely to raise questions about other areas of the business, such as America and the bank."



One investor quoted in the article who wished to remain anonymous said Tesco's U.S. venture, Fresh & Easy Neighborhood Market, were a "disaster" and that the company "should have pulled back faster." Tesco has invested £800 million in the venture and has lost half a billion pounds on the four-year-old initiative.



Meanwhile, Tesco issued its first profit warning in two decades in January, and the company's market share in the U.K. is the lowest it has been in nearly seven years.



he supermarket giant issued its first profits warning for 20 years in January, and shares have fallen 21% over the past year. Tesco's market share is now at its lowest level for almost seven years, at just below 30%, although still some way ahead of its closest competitor, Asda.



A Tesco spokesperson defended the Fresh & Easy venture, saying the company had "a clear target to break even in America."



The primary source of this article is The Guardian, London, England, on April 8, 2012.



