FINANCE

Report: Tesco Puts Brakes on U.S. Rollout

BY CSA STAFF

London Tesco has halted the rollout of its Fresh & Easy chain in the United States amid growing analyst speculation that the five-month-old venture has begun to miss internal sales targets by some margin, according to a report in The Guardian.

Fresh & Easy marketing director Simon Uwins revealed on the company’s Web site, where he writes an occasional blog, that there would be “a three month break from openings simply to allow the business we’ve created to settle down.”

“In a little over four months we’ve gone from a business with no stores to one with 59—with hundreds more in the pipeline … so we’ve given ourselves a little bit of time to kick the tyres, smooth out any wrinkles, and make some improvements that customers have asked for,” Uwins wrote.

This month analysts at Goldman Sachs and U.S. brokerage firm Piper Jaffray downgraded their forecasts for Tesco over concerns about Fresh & Easy.

Mike Dennis of Piper Jaffray said “very weak footfall” had become an issue for the new chain, adding that supplier feedback suggested the sales could be as little as $30 million, against the anticipated $100 million.

Tesco recently appointed Jeff Adams, an American running Tesco’s operation in Thailand, as chief executive Tim Mason’s deputy in a move some are suggesting is evidence that Fresh & Easy is falling short of expectations, according to the report.

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Giant Eagle alleges chocolate price fixing

BY CSA STAFF

PITTSBURGH According to reports, Giant Eagle has filed suit against a number of chocolate manufacturers, claiming that it was overcharged for products. The company alleges that during the period between 2002 and 2007, it was overcharged for $200 million worth of chocolate products.

The company has named some major players in the suit, including Hershey, Mars and Cadbury Schweppes. According to reports, the suit is not the first to claim overcharging by chocolate manufacturers.

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Sears to sell more appliances at Kmart

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings, according to its annual report, plans to sell appliances at more of its Kmart stores and will open more dealer stores this year.

The company also said in its annual report filed with the U.S. Securities and Exchange Commission that it expects capital spending this year to be flat with last year’s level.

In the filing, Sears Holdings said it “will continue to explore opportunities to profitably cross-merchandise products and services” between its Kmart and Sears stores.

That includes continuing to roll out home appliances, such as those in Sears’ proprietary Kenmore brand, to more Kmart stores, Appliances, a category in which Sears is the dominant U.S. retailer, accounted for about 15% of company revenues during fiscal 2007, the filing said.

As of Feb. 2, the end of fiscal 2007, about 280 Kmart stores were selling major home appliances, the filing said. At the end of fiscal 2005, about 100 Kmart stores were selling Sears-branded products such as tools and appliances.

The company said it opened 40 dealer stores during fiscal 2007, and would open more in rural and urban areas this year. Sears has 857 dealer stores, which sell appliances, electronics, lawn and garden equipment, hardware and car batteries.

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