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Fri 1 Jun 2007 12:00 AM

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Tesco puts $3 bn cap on US venture

Tesco, the UK's biggest retailer, will retreat from the US market quickly if its Fresh & Easy retail concept fails in the country, according to The Business magazine.

Tesco, the UK's biggest retailer, will retreat from the US market quickly if its Fresh & Easy retail concept fails in the country, according to The Business magazine.

The report added that Tesco has privately set a US $3 billion cap on the amount it is prepared to sacrifice if its plan to open 200 Fresh & Easy convenience stores in the USA fails.

In an interview with The Business, Andrew Higginson, Tesco's finance and strategy director, said: "If it [Fresh & Easy] is a failure with consumers you have got to be prepared to pull the plug, and we would move fast, but you don't go in with that view.

"This is a launch, not a trial. The way we see this is it is an investment - if we create a success it will be something we can roll out that will create billions of pounds in value. But if not, the business [Tesco] can sustain a loss of £1.5bn in terms of failure; our careers might not, but the business would."

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