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Tesco, the British parent of the 130-store Fresh & Easy Neighborhood Market, the grocery/convenience hybrid that made its U.S. debut in 2007, will lose about $259 million this year, according to a report by the Los Angeles Times.
According to the report, the retailer is struggling with the overhead of a large infrastructure created to support the anticipated opening of hundreds of stores. Instead, store expansion has stalled as Fresh & Easy has faced poor economic conditions in such areas as Southern California, Phoenix and Las Vegas.
The losses match the amount the company lost in its first year of operating in the United States.
“We have been making good progress in developing the Fresh & Easy business, despite the prolonged weakness in the California, Nevada and Arizona economies,” said Tesco CEO Sir Terry Leahy about Tesco’s financial results for the six-month period ended Aug. 29.
He noted that the company is adapting to customer feedback to tweak its assortment. Meanwhile, total revenue for the international retailer rose 9.3 percent during the six-month period, while net profit rose 1.3 percent.