EL SEGUNDO, Calif. — The day before Fresh & Easy Neighborhood Market is set to expand into the Sacramento, Calif., market, the chief executive officer of Tesco, its U.K.-based parent company, told the Financial Times of London the company needs to not only achieve profitability but also to generate steady returns.
Philip Clarke said the Fresh & Easy stores could reach a break-even point as early as this year — and if not, then in 2013 — but simply reaching profitability is not necessarily the end goal.
"What I am yearning for is a day I can say not just, 'Hey, do you know what? It's got to break even,' but, 'Look here at the prospect of strong returns.' On the one hand, not losing money is a good thing, but on the other hand, generating strong returns from the business would be a great moment, and that is where we are starting to focus our efforts now because that is the next great question.
"The only reason for having any business is that it generates a return ... on investment that justifies your being there. So, first job: break even. Second job: returns."