The U.K.’s largest grocer Tesco must look hard at its Fresh & Easy operation in the U.S., according to billionaire investor Warren Buffett the chairman and CEO of the investment company Berkshire Hathaway.Buffett, who holds a 3% share in Tesco, was talking at a shareholders conference in Omaha, Nebraska, and said that the retailer was foolhardy to enter the world’s largest grocery market.
Charlie Munger, vice-chairman of Berkshire Hathaway was even more forthright, saying that Tesco's West Coast adventure had been ill-advised, adding: "I could have told [Tesco] if they had asked me, but they didn't. I am not critical; I just think it is difficult to be a new boy. Tesco is God Almighty in England. But you come into Southern California and you have Trader Joe's and Costco that is tough competition."
Asked whether Tesco should pull out of the U.S., Munger said "I don't know. Maybe they are skilful enough so that they can make it work."
The businessman did acknowledge however that sales have been improving for Fresh & Easy and, in Deputy CEO Tim Mason, the company has “a smart guy at the top” to potentially make a success of its business in the U.S.
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