Tesco set 
to confirm 
decision 
to quit US
market

The supermarket is expected to confirm a decision to quit the US – the world’s most competitive retail market – where its 199-store Fresh & Easy business has never made a profit. Tesco’s bid to take on Wal-Mart in its own back yard was doomed in December when chief executive Philip Clarke said he was not afraid to make “big decisions” by calling time on the venture.

It follows Tesco’s announcement in August it was pulling out of Japan after ploughing more than £250m into the venture and spending eight years trying to crack the market. Bad timing was partly to blame for Fresh & Easy’s woes, with the chain arriving in 2007 amid a housing market slump in California and just before the financial crisis struck.

But the team’s strategy, under former group chief executive Sir Terry Leahy and US chief Tim Mason, also appeared to be flawed from the start. Its decision to launch Fresh & Easy as a small store format meant it faced a lot of upfront costs, while its self-service checkout model led to the often-quoted gibe that it was “not very fresh and not very easy”.

Analysts expect heavy writedowns if Tesco quits the US, with predictions ranging from £250m to £1bn. Options for the US business include a one-off sale or piecemeal disposal of assets. The group publishes results for the year to the end of February on Wednesday, with a consensus of analysts expecting it to post underlying pre-tax profits almost 11 per cent lower at £3.5bn.

The retail sector will dominate the agenda again this week as figures from Debenhams, JD Sports Fashion and Burberry, which makes its iconic trenchcoat in Yorkshire, will also be published.

Meanwhile, bookmaker William Hill’s fast-growing online division looks set to be the star performer again when it reports on first-quarter trading. Increasing numbers of punters are betting via its mobile apps, and William Hill recently backed its flourishing online arm by spending £424m on taking full control of the operation. The swoop on the 29 per cent stake held by gaming software partner Playtech came as it posted a 22 per cent rise in pre-tax profits to £292.7m for 2012, driven by a third year of online revenues growth above 20 per cent.

The trading update on Friday will cover the 13 weeks to the start of April, its first quarter. William Hill employs more than 3,000 people in Yorkshire.