Tesco announced its earnings for the first half of its 2009/2010 fiscal year and Fresh & Easy continues to disappoint.
Exact figures are not available, as Tesco, which published “Like for Like” sales numbers on Fresh & Easy — what we Americans call “Same Store Sales” — last year, stopped doing so when the numbers became inconvenient.
Folks like the food retailing team at J.P. Morgan in London are estimating that sales per store, based on an average number of stores open during the period, actually slipped about 4% this half from the previous six months and fell almost 7% from the first half of 08/09:
Table 5: Fresh & Easy Sales
|
2H07/8 |
1H08/9 |
2H08/9 |
1H09/10 |
|
|
Sales |
$147m |
$212m |
$259m |
|
|
# of stores |
53 |
74 |
115 |
125 |
|
Avg # of stores |
64 |
95 |
120 |
|
|
Sales per store |
$2.31m |
$2.24m |
$2.16m |
Source: Company reports and J.P. Morgan estimates.
Although Tesco points to a drop in marketing efforts while it was revamping the stores as the cause of the drop and says its recently launched ad campaign bodes well for the future, typically the normal maturation process of retail stores should keep sales growing for several years so this is a bad sign for Fresh & Easy.
Tesco also says it is expecting to lose this year about the same as the roughly $259 million it lost last year on the Fresh & Easy operation. Of course, Tesco is a big and rich company, still, lose a quarter billion here and a quarter billion there, and to paraphrase a line popularly attributed — though perhaps apocryphally — to Republican senate minority leader Everett Dirksen — pretty soon you are talking real money.
