Tesco burned nearly £2bn launching Fresh & Easy in the US on the wrong shopper research

In 2006 Tesco, then the world's third-largest retailer, announced it would enter the United States with a new chain of small neighbourhood grocery stores called Fresh & Easy. The first stores opened in November 2007 in Arizona, California and Nevada. The format — roughly 15,000 square feet, about a third the size of a typical American supermarket, leaning on private-label and prepared foods — was developed largely from Tesco's reading of US shoppers, led from its UK headquarters.

The bet misread the market. American shoppers in those suburbs tended to do big weekly trips to large supermarkets and warehouse clubs; the small, sparse Fresh & Easy boxes felt understocked and unfamiliar. The timing was brutal too: the chain expanded into the teeth of the financial crisis and the housing crash, in exactly the Sun Belt suburbs hit hardest. Tesco kept the faith, pouring in capital and reaching more than 200 stores by the end of 2012, while losses piled up.

In April 2013 Tesco admitted defeat and confirmed it was pulling out of the US, at a reported cost of £1.2 billion. In September it handed over more than 150 stores to Ron Burkle's Yucaipa Companies — effectively paying Yucaipa to take on the liabilities — and Fresh & Easy filed for bankruptcy that October. The total cost of the venture came to nearly £2 billion. Yucaipa closed the remaining stores in 2015.