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LONDON -- Less than two months after predicting grocery chain Fresh & Easy could break even later this year, parent company Tesco plc is rolling back expectations after facing a surprise profit warning, according to Reuters. Now Fresh & Easy isn't expected to break even until its 2013-2014 calendar year.
"I'm announcing today our 1 billion pounds plan to put the heart and soul back into Tesco," said CEO Philip Clarke. "The plan isn't radical, isn't a radical change of direction, but it's a radical change of pace."
Rather than continue the U.S. expansion of Fresh & Easy stores, Tesco will put its money into improving existing Tesco stores in an attempt to reconnect with consumers. The company will revamp 430 locations, or 25 percent of its British selling space, and offer warmer colors, better lighting and signage and an improved look, said Clarke.
Tesco also plans to focus on online shopping and smaller stores. New stores opening during the 2012-2013 calendar year will comprise 38 percent less selling space than in 2011-2012. This is expected to reduce capital spending from 3.8 billion pounds to 3.3 billion.