Tesco says F&E doing OK

Tesco seems to have successfully allayed investors' concerns about the launch of Fresh & Easy, based on most reaction to their annual report yesterday:

In the U.S., Tesco claimed it is 'very encouraged' by the start that Fresh & Easy has made.

Tesco entered the U.S. in November last year and opened 60 stores in under five months. However, it recently called a temporary three-month halt to the expansion programme, leading to widespread speculation that it had missed internal targets -- a claim the retailer firmly denies.

Tesco said Fresh & Easy's sales are ahead of budget and sales densities are already higher than the U.S. supermarket average, with some stores exceeding $20 per square foot per week.

Those are decent numbers, though Tesco also reported that it has lost $125 million thus far on F&E, and expects to lose about $200 million in the coming year.

Although a temporary halt to store openings was called earlier this month, they say they will resume the openings in July and will open 150 stores this year (60 have been opened thus far).