Blog: Petah MarianWhat will Clarke's leadership mean for Tesco in the US?

Petah Marian | 4 March 2011

Tesco has signalled its confidence in the US with the opening of its first northern California stores, a move that perhaps cools speculation that new CEO Philip Clarke could pull the plug on the struggling venture.

The retailer yesterday said it had opened a store in San Jose and another in Danville, in the San Francisco Bay area.

The retailer plans to open a further 10 stores between now and the end of April.

The announcement may put to rest suggestions that Clarke may not be behind the US venture.

Speaking to just-food yesterday about the retailer's US operations, where it is yet to make a profit, Shore Capital analyst Clive Black said that Clarke "has already set an ultimatum in our minds" that either it "demonstrates within a year or so a trajectory towards materially improved financial performance or it's going to be either closed, or sold".

However, he added that should it be able to turn make the venture profitable, it will find itself in a very "virtuous situation" as it owns its headquarters, distribution and food production facilities, which would obviously have a favourable impact on margins.

With this continued investment into the region, hopefully it is only a matter of time before the operations begin to record a profit.


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