Fresh & Easy, the loss-making convenience store chain owned by UK retailer Tesco, is planning to enter into profitability by 2012/13 after making trading losses of $737m to date.
In order to achieve the objective, the group’s CEO Sir Terry Leahy said in a statement that Fresh & Easy would grow from its current size of 165 stores to about 400 by the time it breaks even by opening two stores every week.
“We expect to open 19 new stores in the second half of the year with a continued focus on areas where the local economy has been less severely hit and where we are seeing substantially stronger sales performance,” explained Sir Terry.
“Thereafter, we plan to increase the pace of store openings, helped by the strong pipeline of new sites we already have in place.”
“There is no need to carry out some big strategic review. It is clear that continuing and moving to profitability is the right thing,” added Phil Clarke, who takes over from Sir Terry in March 2011.
To that end, Fresh & Easy is to temporarily close or “mothball” 13 stores in the US (six in Nevada, six in Arizona, and one in inland California) for four to five years before re-opening once the regional economy recovers.
Despite that economic recovery in the western US has been slow to take hold, the company said Fresh & Easy has nevertheless made good progress, with around 10 per cent like-for-like sales growth and significant improvements in store operating ratios during the first half.
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