Tesco to pull out of U.S. market

In the highly competitive U.S. grocery space, Tesco says it’s had enough.

Abandoning the “Fresh & Easy” grocery model in the U.S. will cost the company about $1.5 billion in one-time costs and require company restructuring.

Britain's biggest retailer wrote down the value of its global operations by $3.5 billion and announced plans to exit the U.S. on Wednesday (April 17).

Fresh & Easy, which trades from 200 stores in California, Arizona and Nevada employs around 5,000. This grocery model has absorbed over 1 billion pounds of capital since its 2007 launch, but has never turned a profit in a market where it competes with Wal-Mart and Trader Joe's.

Analysts say the news is positive for Wal-Mart as it plans to build more Neighborhood Markets this year, filling in more densely populated areas where possible.

Tesco will attempt to sell the Fresh & Easy stores.