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Tesco hosted its annual meeting on Friday, and came under fire from numerous quarters both about its stagnant UK business and its still unprofitable Fresh & Easy business in the US.

According to the Financial Times, a great deal of criticism came from Change to Win, an organization that "works with US union-sponsored pension funds," and that "called for Tesco to establish a committee of non-executive directors to review the future of Fresh & Easy ... and 'disclose the metrics and timeframe the board will use to evaluate Fresh & Easy’s future performance'."

However, Tesco rejected the call, saying that its existing board of directors reviews Fresh & Easy's performance on a regular basis and that uncertain economic times make it difficult to set ironclad metrics and timeframes.

CEO Philip Clarke promised that if the US business shows no sign of profitability, Tesco would pull the plug on the operation, just as it recently did in Japan, where it sold its business earlier this year.

However, he also said that "Fresh & Easy is improving as a business and I can assure you that it is receiving close attention from the executive team…We believe there is great value in the business and, if we get it right, an excellent stream of growth in future years."

The company also rejected calls from some investors for Clarke to resign if the company does not meet certain benchmarks.
KC's View:
This is an unaccustomed position for Tesco senior executives, who have been used to things going well. I'm not a Tesco investor and I have absolutely no sway, but I do believe that current management has to be given time to fox some of the systemic problems that seem to exist within the company. I have no idea whether Fresh & Easy should be sold off, but it seems to me that the company won't sell it in the foreseeable future unless someone comes along and makes them an offer they can't refuse.