Fresh & Easy could break even in 2012 says Tesco CEO
Tesco has said that its loss-making Fresh & Easy chain in the US could reach break-even point as early as this year.
However, Tesco CEO Philip Clarke said in an interview with the Financial Times that the company needed to not only achieve profitability but also to generate steady returns.
Clarke told the Financial Times: “What I am yearning for is a day I can say not just, ‘Hey, do you know what? It’s got to break even,’ but, ‘Look here at the prospect of strong returns.’ On the one hand, not losing money is a good thing, but on the other hand, generating strong returns from the business would be a great moment, and that is where we are starting to focus our efforts now because that is the next great question.”
He added: “The only reason for having any business is that it generates a return. . . on investment that justifies you being there. So, first job: break even. Second job: returns.”
Fresh & Easy is estimated to have made losses of around £700 million since its launch in 2007 and received £1 billion of capital.
Clarke would not comment on how long he was willing to wait for the chain to achieve the “strong returns.”
