Britain's Tesco, the world's No. 3 retailer, has launched a strategic review of its loss-making United States chain Fresh & Easy that could lead to a sale or closure of the business.
Announcing the review alongside a third quarter trading update that showed the continued pressure on Tesco's home market, the group said it would report the findings of the review when it issues full-year results in April.
It said all options were under consideration for the business and it has appointed Greenhill to assist in the review.
Tesco said it has had a number of approaches from parties interested in acquiring either all or part of Fresh & Easy, or in partnering with the firm. It added that Tim Mason, Fresh & Easy's CEO, is leaving Tesco after 30 years with the group.
The 200-stores Fresh & Easy chain, having absorbed nearly 1 billion pounds ($1.6 billion) of capital since its 2007 launch, remains stubbornly loss-making in the cut-throat U.S. grocery market and Tesco Chief Executive Phil Clarke has been under increasing pressure from investors and analysts to act.
Its third-quarter underlying sales growth eased to 1.8 percent from the second quarter's 6.9 percent.
The problems in the U.S. compoundeda tough trading environment in Britain and central Europe, which was partially offset by thestronger performance inAsia.
Tesco posted a return to falling quarterly underlying sales in its home market on Wednesday, raising questions over whether its 1 billion pounds recovery plan is struggling to gain traction.
The firm, which takes about one in every 10 pounds spent in British shops,said sales at UK stores open over a year, excluding fuel and VAT sales tax, were down 0.6 percent in the 13 weeks to Nov. 24, its fiscal third quarter.
That compares with analysts'forecasts in a range of down 0.9 percent to up 0.2 percent and an increase of 0.1 percent in the second quarter, which had been Tesco's first rise after 18 months of decline.
Tesco said the UK slowdown particularly reflected weak general merchandise.