Tesco suffers US setback

The setback came when a Californian court ruled last week that the grocer’s huge warehouse on the edge of Los Angeles did not comply with environmental law.

Tesco US executives acknowledged that the ruling could, in theory, delay Tesco’s expansion in the US or lead to the closure of the depot, which has the potential to serve hundreds of Fresh & Easy convenience stores in Los Angeles, San Diego, Phoenix and Las Vegas.

However, the grocer stressed that these were worst-case scenarios and that similar disputes had been settled without such drastic measures.

Last week, at judge at Riverside District Court in California said that more environmental work may be required at the distribution centre, built on a former airbase, to comply with planning regulations.

The case was brought by Health First, a group established with the support of the United Food and Commercial Workers union, which has been highly critical of Tesco’s US launch.

Tesco said the case has been ongoing for some time and has not affected the development of the distribution centre or the launch of its new stores.

In a statement, the supermarket giant said: “We will review the ruling to understand what further compliance might be necessary, but there is nothing in the ruling handed down that we believe will affect the operation or further rollout of the business.”

Health First said that the distribution centre should have been subject to a full environmental review, including a public consultation. It is particularly concerned about the impact on the area of increased traffic from truck volumes.

Tesco has opened 15 Fresh & Easy stores on the US West Coast so far and plans to have 50 by the end of February.