12:27 17 April 2013
One of the UK’s largest retail groups Tesco has revealed a drop in profits following its agreement to quit America. By Tesco exiting the US, it will cost at least £1billion according to reports. This is in regards to the business Fresh & Easy in the US.
The group will have to acknowledge the £1billion decrease with regards to its business and America. It is believed that overall the group’s pre-tax profits have decreased by as much as 52per cent compared to results from the previous year, as reported by The Telegraph.
The Chief Executive of Tesco’s Philip Clarke explained “strategic changes” were started at least 12 months ago.
The Chief said: “We have set the business on the right track to deliver realistic, sustainable and attractive returns and long-term growth for shareholders.
“The consequences are non-cash write-offs relating to the United States, from which we today confirm our decision to exit, and for UK property investments which we will not pursue because of our fundamentally different approach to space.”
Mr. Clarke added however, that Tesco is doing well in the UK.
He said: “Our plan to 'Build a Better Tesco' is on track and I am pleased with the real progress in the UK. We have already made substantial improvements to our customers' shopping experience, which are starting to be reflected in a better performance.”
Fresh & Easy, also known as Fresh & Easy Neighbourhood Market, have grocery shops in America. The group first began towards the end of 2007. Their headquarters are based in California, where it is believed they also have stores, among other places in the US.
Tesco PLC, whose headquarters are in the UK, has business across the world with stores in Europe and Asia as well as the US. It was first started in 1919.
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