(Oct. 3, PACKER WEB EXCLUSIVE) Tesco’s entry into the U.S. market cost the company more than $100 million in losses in the first half of the year, the United Kingdom-based retailer reported.

Tesco said Sept. 30 that for the 26-week period ending Aug. 23, its Fresh & Easy stores had sales of $133.8 million but netted a loss of $105.6 million.

Tesco, which entered the U.S. market in November 2007, said the losses were in line with the company’s expectations.

“These planned losses reflect the fact that the U.S. business — which has been trading for nine months — has been built with the necessary infrastructure in place from the beginning to support hundreds of stores,” the company reported in a financial statement. “At this stage, it is therefore operating with high overhead and other costs in relation to the scale of the business, whilst also trading from immature stores.”

Tesco has opened about 90 U.S. locations with stores averaging 10,000 square feet. The retailer said its best stores were averaging about $25 per square foot per week, and its average was $11 per square foot per week.

“Customer response to our combination of fresh, wholesome food at very competitive prices in neighborhood locations has been extremely positive,” the company said. “Feedback from new as well as regular shoppers continues to surpass our expectations.”

The retailer also said it has secured a significant number of sites in northern California for additional stores, but no timeline has been announced for the next stage of expansion.


Tesco has opened about 90 U.S. locations with stores averaging 10,000 square feet. The retailer says its best stores are averaging about $25 per square foot per week, and its overall store average is $11 per square foot per week.