Tesco has remained tight-lipped over reports it is in talks with potential buyers over the sale of is US Fresh & Easy chain.

The chief executive of the UK retail giant, Philip Clarke, is understood to be in discussions with Aldi and the German discount retailer’s US unit Trader Joe’s for a potential deal. According to The Sun, a sale has been agreed, just four months after Tesco put the loss-making chain under review.

Tesco announced in December it was “likely” to quit the US after confirming it was reviewing its options for the Fresh & Easy business in the country. Clarke blamed the impact of the “unprecedented crisis in the markets” on the states the retailer had targeted on the West Coast.

It is understood talks have also been held with property investors about possible deals for the 220 community stores, The Sun reported.

Tesco, however, declined to comment on the reports and said it would update the market on its US plans at its preliminary results in April.

The retailer has faced questions over its US venture ever since it opened its first Fresh & Easy in 2007.

In October last year, Tesco reported a 5.2% increase in half-year like-for-like sales in the US, excluding fuel. The trading loss from Fresh & Easy, however, stood at GBP74m, 1.4% lower than a year before.

In it latest Christmas and New Year update in January, total sales for Fresh & Easy were up by 4.1% in the six weeks to 5 January.