Tesco ponders sale of Fresh & Easy Neighborhood Market

Stating that its U.S. Fresh & Easy Neighborhood Market chain “will not deliver acceptable shareholder returns on an appropriate timeframe in its current form,” Tesco PLC, Cheshunt, England, said it appointed Greenhill to assist the company in a review of options. One of those options appears to selling Fresh & Easy. The move follows an October announcement from Tesco indicating new capital investment in Fresh & Easy was to be tightly constrained while the business focused on reducing costs and improving the profitability of its existing stores.

“In recent months, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business,” Tesco said. “We will communicate progress on this process when we present our full-year results for the current financial year in April 2013.”

The retailer also said that Tim Mason, Fresh & Easy’s chief executive, will be leaving Tesco after 30 years of service with the company.

"I have been clear since my appointment as CEO was announced that my role is to deliver long-term value for shareholders,” said Philip Clarke, Tesco’s chief executive. “Following a year in which my priority for Fresh & Easy was to improve its performance, I have now made a fully informed assessment of its longer term potential.

"Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities,” he added. “I have therefore decided to conduct a strategic review of Fresh & Easy, with all options under consideration.”

Clarke also noted that Tim Mason has played an important part in Tesco’s success.

“He leaves with my thanks and good wishes," he said.

Over the past few years, Fresh & Easy has made its store brands a key focus, introducing such brands and fresh&easy, fresh&easy Goodness, fresh&easy eatwell, Kitchen To Go, Green Things and more.