LyrArc Article Gist
Tesco's decision to exit the U.S. market in Dec. 2012. Tesco's U.S. plan was made after research showing buyers would favor smaller stores than large supermarkets, and more fresh products. Tesco made its entry in the U.S. market in 2007 in Nevada, California and Arizona in areas with new housing projects. When the mortgage crisis hit in 2008, foreclosures and the recession affected these areas where new stores were opened. Some of the ideas were lost in the implementation. The format that worked in Britain failed to takeoff in the U.S. Many stores were located in area where people were used to driving longer distances and could find a larger store with more selection a few minutes away. American buyers preferred to shop for name brands with more selections, Tesco carried more house brands. Experts say Tesco failed to establish a clear proposition to buyers. Tesco faces a loss of 1 billion pounds on the U.S. venture.