In 2007 Tesco announced that it was to launch into the US grocery market: the world’s biggest and most competitive. Boss Sir Terry Leahy switched his best executives from China to the USA and allowed them to carry out a year’s market research and investigation.
In its 2007 annual report, Tesco confirmed its plan to invest £250 million a year for 5 years in a new grocery concept called Fresh & Easy. Tesco believed it had found a market gap: its stores would be one third of the size of a typical US supermarket, but double the size of the average convenience store. By spring 2008 Tesco had 60 Fresh & Easy stores in operation, and was trumpeting that sales were ‘ahead of budget’. It said 150 more would be opened in the 2008/09 financial year, and claimed that breakeven would be achieved within 2 years.
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