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Tesco Case Study

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Background The purpose of this paper is to analyze the failure of Tesco’s Fresh and Easy markets in the US, and to administer suggestions that Tesco could have taken to prevent bankruptcy or failure in the US market. In 2007, Tesco opened a chain of small format grocery stores in the Western United States called Fresh & Easy. Tesco is the third world’s largest retailer and is based in the United Kingdom. Tesco opened up its first headquarters in El Segundo, California and first store in Hemet, California, as a soft opening. The company expanded overtime to Phoenix, Arizona and Nevada. It had plans for rapid growth with 182 stores as of October 2011 and over 200 by December 2012. After only 17 months of operation, Tesco reported a $142 million loss and eventually accrued a total loss of $1.8 billion. On September 2013, Fresh and Easy filed for bankruptcy. In the filing, Fresh & Easy listed debts of more than $500 million and assets of $100 million to $500 million. Billionaire Ron Burkle’s Yucaipa Cos. bought about 150 of the markets along with the production facility in Riverside, California where the company produces meals under the Fresh & Easy brand. Tesco’s sale of the Fresh & Easy markets to Yucaipa put an end to its US venture. Factors Contributing to the Fail Fresh & Easy Entry Strategy When Tesco’s CEO Terry Leahy announced that there would be major resources committed to making a concept that would adapt to the US market, investors reacted with some skepticism

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