• Financial Times, Wednesday, April 16, 2008 10:09 AM

After enduring weeks of suggestions that his Fresh & Easy chain was not hitting the mark with U.S. consumers, Tesco CEO Sir Terry Leahy has struck back, claiming that sales are ahead of budget and that in a survey of 200 shoppers, not one was dissatisfied. "What we have seen is remarkable demand for Fresh & Easy own-label," Sir Terry says, scotching suggestions that brand-hungry Americans do not like his Fresh & Easy own-label ready meals and fresh lines.

Tesco is planning its second distribution center in San Francisco to roll out the north Californian business and will build a second "kitchen" alongside it to prepare its own-label ready meals. That implies that Tesco is quietly planning to open more stores this year than the 150 it has promised.

Tesco says that sales in some of its stores in the U.S. are now exceeding $20 a square foot a week, which is well above the industry average of $8.7 a square foot--although well below the $30-plus sales densities of Trader Joe's stores.

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