Tesco eyes an exit from US as it axes Fresh & Easy boss

Supermarket giant loses £850m in five years in America and UK sales slip back again

Tim Mason, the chief executive of Tesco's United States business, has paid the price for losses of £850m over five years at its troubled Fresh & Easy operation, as the group admitted it was "likely" to exit America.

The world's third-biggest grocer said it has launched a strategic review of its 199-store operation in California, Nevada and Arizona, which could see it sold, closed or made into a joint venture, alongside posting a further decline in underlying UK sales in its third quarter.

Philip Clarke, Tesco's chief executive since March 2011, hinted at a bust-up with strategy over Mr Mason, a Tesco veteran of more than 30 years, who is also its group deputy chief executive.

Speaking from Los Angeles yesterday, he said: "I did not think it was appropriate for Tim to lead the review. I wanted a fresh pair of eyes to run the business so it was my decision [for him to leave]."

He added: "It's likely but not certain that our presence in America will come to an end." Credited with creating the Every Little Helps slogan, Mr Mason is leaving after Tesco failed to crack the US market despite investing £1bn in Fresh & Easy since launching to a fanfare in November 2007.

The supermarket giant's expected exit from the US follows other high-profile UK failures in America, including Sainsbury's selling its Shaw's business in 2004 and Marks & Spencer offloading its Brooks Brothers chain in 2001.

Of this country's biggest retailers, only Sir Philip Green's fledgling Topman and Topshop operation in the US appears to be succeeding, with the billionaire poised to sell a stake of 25 per cent in the two chains to the private-equity house Leonard Green & Partners for £250m.

While investors welcomed Mr Clarke calling time on the loss-making US chain and its shares rose by 10.8p to 337.45p, the review of Fresh & Easy is the latest setback for Mr Clarke.

Following years of its underlying sales trailing UK rivals, Tesco unveiled its first profit warning in January in 20 years and three months later a £1bn investment to turn around its domestic business.

Mr Mason, 54, who is also the group's head of marketing, is leaving with immediate effect and is the latest executive to exit since its former boss Sir Terry Leahy handed over to Mr Clarke last year. Its former finance director Andy Higginson, e-commerce chief Laura Wade-Gery, Asian boss David Potts and Richard Brasher, who was its UK chief executive, have all left.

Mr Clarke yesterday said Fresh & Easy's underlying sales growth had slowed to a "trickle" of just 1.8 per cent over the 13 weeks to 24 November, admitting it had been "too hard" to convince US consumers to shop at its 10,000 square feet stores instead of their traditional reliance on big-box shops of over 150,000 sq ft.

Tesco has hired advisers at Greenhill for the strategic review, adding it had received in recent months a "number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with us to develop" the business.

Mr Mason, who received total pay of £1.63m last year, will receive a pay-off of £1.7m, including a year's salary, his expatriate allowance and a cash bonus.

In addition, he owns ordinary shares worth more than £6.6m and has accrued a pension pot of over £9m.

Mr Clarke described as "disappointing" at 0.6 per cent fall in Tesco's UK like-for-like sales in the quarter, with him blaming tanking demand for big-ticket items, such as electricals.

Sport
Brazilian fans watch the match for third place between Brazil and Netherlands
world cup 2014Brazil 0 Netherlands 3: Dutch pile on the misery in third place playoff
Sport
Robin van Persie hands his third-place medal to a supporter
Van Persie gives bronze medal to eccentric fan moments after being handed it by Blatter
Arts and Entertainment
books The follow-up documentary that has got locals worried
News
Ian Thorpe had Rio 2016 in his sights
people
PROMOTED VIDEO
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
Monkey business: Serkis is the king of the non-human character performance
peopleFirst Gollum, then King Kong - now the actor is swinging through trees in Dawn of the Planet of the Apes
Arts and Entertainment
Blackman: Landscape of children’s literature does not reflect the cultural diversity of young people
booksMalorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
News
Soft power: Matthew Barzun
peopleThe US Ambassador to London, Matthew Barzun, holds 'jeans and beer' gigs at his official residence. He says it's all part of the job
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?