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Breakingviews: Tesco - troubles at home

Wednesday, Dec 05, 2012 - 03:57

Dec. 5 - The supermarket’s American dream has gone sour with U.S. chain Fresh & Easy under strategic review, but its real problems are at home, says Breakingviews.

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While today's breaking news we also hit supermarket giant Tesco is -- under threat to its American dream. Passing so gonna solve with loss making US chain fresh and easy on the strategic review. But assists and edits are Dakotas analog units has been real problems. -- have here in the UK right well. No question about lot of soul mate let's not underestimate. The the the US difficulty. I think it's accounts for about 5% of the capital employed in the business it sucked -- a billion pounds what investments in state. Been trying to break into this market over the last five -- is. But in this is that this is that this is an outfit that I think. I had sales of 365. Million pounds in the last half -- that's about how sixty it hit the VVUK. Business where it's 65. Times you out what it would let let's let's that's. Mentioned some of these numbers because they do put it into perspective two thirds of its sales are in the UK so weak three quarters of its profit is made in the UKA. Tesco takes a power want in every ten pounds spent in proceed shops yet I mean I mean it's massive that that's that's the issue. And I think one of the things that. Is important to say today that it if you like the US those concerns about this US business have been if you like and roaring. Far away from concerns about the big picture without made some news. People -- sensible thing to do I mean that probably accepting defeat yet Laguna -- and Obama but I I do I do actually think that you know do it eight it's not really -- found on on tax cuts -- to -- -- -- and say well for the US Spencer has not bets to a try and filed a not so try to so OK but the end of the day. It's about a year caddie and it's about the top -- from other international markets and South Korea does it to to to. It just doing okay. -- -- -- -- -- -- -- -- -- I have absolutely -- on today let's leave that so I'm I'm I'm currently. And our identity and nobody else has any realistic on the right rather than maybe you don't venture at a may be some sort of -- wanted to -- I actually that's our columnist unreal why this test your news from. Struck cold so so much in the UK exit is is one of these stores that source citizen nut in the middle business it's not a super cheap. And it's not the most expenses well I think the -- -- I think that's that's part of it it's it. If that it is to say one every ten pounds spent so this is not. A small plant by any means but. But the moment to struggling what the competition. These these small talk you know -- at the low -- Ryan Jenna offense yet. And it's that the way tries and the end of the market. -- let's face it you know the economy isn't doing any favors. In the broad economy isn't doing any favors. I think that you know off to the united tremendously successful write in of Terry Levy has been kind of -- a hangover perhaps I haven't been spending. I'm not form promotions have been spending enough on my pistols look a bit mold with the and so you know it's a it's a mixture of a number and a number of different things which is just making -- look at. Quiet today extra -- protest yeah I think a lot of I don't I don't I'm and I think that actually. Long term I'm pretty confident that -- get -- -- it back together. Out of the US is really got to prove itself now Burnett all right Robert many thanks Matt Robert -- I've margin to setting financial -- what are you show every day throw thirties and 1730 GMT time -- -- -- rice's.

Breakingviews: Tesco - troubles at home

Wednesday, Dec 05, 2012 - 03:57

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