Tesco, the British supermarket giant and the world's fourth largest retailer, announced it will sell or shut down its 200 Fresh & Easy grocery stores. All of the stores are located in California, Arizona and Nevada, and the banner is Tesco's only U.S. asset.
Fresh & Easy began with its first store in Phoenix in 2007, and the grocery chain's stores are typically in the 10,000 to 15,000 square foot range. They offer fresh food and ready-to-eat meals at low prices, and the stores are touted as more convenient alternatives to traditional U.S. supermarkets.
Since 2007, Tesco has invested about $1.6 billion in the chain, but it has never been profitable.
"It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate timeframe in its current form," said Tesco CEO Philip Clarke.
Analysts say that Aldi could be among those interested in acquiring the chain, and that Walmart could bid for parts of it.