Tesco hires Greenhill to conduct strategic review of Fresh & Easy as US boss Tim Mason departs

Fresh & Easy chief executive Tim Mason has left the business after 30 years with Tesco and the grocer has appointed financial advisers Greenhill to conduct a review with a view to a sale.

Tesco said: “It is now clear that Fresh & Easy will not deliver acceptable shareholder returns on an appropriate time frame in its current form.

“We have therefore appointed Greenhill to assist with the review of options. In recent months, we have had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop the Fresh & Easy business.”

The Fresh & Easy chain has racked up several million pounds of losses since launch and Clarke has been under pressure from the City to axe the ailing chain. Like-for-likes in the US fell from 6.9% growth in the third quarter to 1.8% growth in the second.  

Chief operating officer Tim Ashdown is expected to handle the day-to-day running of the business.

In the third quarter, group sales rose 2.9% in the 13 weeks to November 24. However, like-for-like sales excluding VAT and petrol in the UK fell to 0.6%, a slowdown from the 0.1% growth in the second quarter.

Tesco attributed the poor performance to difficult consumer spending conditions and the continued slowdown in general merchandise sales.

The City was watching keenly for signs of Tesco’s UK turnaround plan taking shape but overhauls of in-store fresh food departments, improvements in service and an extension of click-and-collect have yet to translate into strong like-for-like growth.

Tesco continues to struggle in a number of its international markets. In Asia, like-for-likes fell 1.2%, held back by a 5.1% fall in South Korea and a 1.5% fall in like-for-likes in China.

In Europe, like-for-like sales fell 3.6%, with the Czech Republic experiencing a 9.2% fall and Turkey a 7% decline.

Clarke said: “Our general merchandise performance overall in the UK was not good enough, and we are renewing our efforts to deliver sustainable, profitable growth in this part of the business.

“We have seen a further weakening in consumer spending in central Europe, although the effects of this have been partly offset by a better quarter in Asia.

He added: “I am looking forward to the important seasonal period ahead, and am confident in our plans to deliver further improvements in our shopping trip for customers.”