Tesco has insisted its US expansion plans were on track, amid growing speculation that the initial performance of its new Fresh & Easy discount grocery stores concept has fallen short of expectations. Financial Times, The Times, Daily Telegraph
Mike Dennis, an analyst at Piper Jaffray wrote in a note to clients that the 50 stores opened so far around Los Angeles, Las Vegas and Phoenix could be averaging sales of $170,000 a week, against what he said were planned initial sales of $200,000.
Dennis argued that the slow start would hit Tesco’s longer-term earnings projections.
Tesco said in a statement yesterday that the stores were 'proving very popular'. It added: 'What we are seeing is growing sales, growing customer numbers.'
There have been widespread anecdotal reports in the US that the small neighbourhood groceries, similar in concept to an Aldi discount store, have been failing to attract customers at the rate needed.