Tesco’s push into the US – which has proved a graveyard for UK store groups’ ambitions in the past – is regarded by many observers as a high-risk enterprise.
However, Scott’s comments, which he made to an audience of investors at last week’s Goldman Sachs retail conference in New York, may well convince sceptics to revise their opinion.
Responding to a question, Scott said he had heard mixed reports about how Fresh & Easy was faring, but that he was convinced the business would perform well.
He said: “The thing that bothers me is Tesco is a very good retailer. I have a lot of faith that they will find their direction and it is something we need to pay attention to.”
At present, there are 75 Fresh & Easy stores. Tesco is investing£1 billion in the business, which is headed by Tim Mason, and aims to take its store count to 1,000.
Exane BNP Paribas analyst Tim Attenborough agreed with Scott’s analysis, saying: “There’s been a lot of misguided comment about Fresh & Easy. Tesco is onto something good and it’s a very lucrative long-term growth opportunity.”
He expects Tesco chief executive Sir Terry Leahy to report that Fresh & Easy is moving in the right direction when the retailer posts interims later this month.
Fresh & Easy’s arrival has prompted Wal-Mart to develop a rival fascia, Marketside, which is expected to make its debut within weeks in Phoenix, Arizona. If successful, Marketside is also likely to be developed into a 1,000-store business.