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Last Updated: Thursday, 8 February 2007, 08:13 GMT
Arizona gets first Tesco US store
Tesco trolley
Can Tesco crack the US market?
Tesco, the UK's largest retailer, has chosen to open its first US store in the state of Arizona.

The retailer, which is using Fresh and Easy as its brand name for its US venture, said it had secured 20 sites in the Greater Phoenix area.

Other outlets in Los Angeles and San Diego will open later this year.

Tesco is targeting US grocers like 7-Eleven and locally-run stores using a chain of convenience stores modelled on the Tesco Express blueprint.

The Phoenix area was selected because of rapid growth in the region, Tesco said, predicting 2,500 jobs would be created by the first wave of openings.

Tough market

"The Fresh & Easy Neighbourhood Market format is designed to draw customers back to their local neighbourhoods by offering high quality, fresh and nutritious food at affordable prices," said Tim Mason, head of Tesco in the US.

"Our company has enjoyed strong success in countries throughout Europe and Asia, and we are excited to bring that success to America."

However, the US market is notoriously tough for UK businesses.

Top retailers Sainsbury's and Marks & Spencer have failed to crack the tastes of the US consumer and both have withdrawn back across the Atlantic.

Having the US in its sights helped Tesco to attract a 734m investment from stock market guru Warren Buffett.

The investment by his Berkshire Hathaway company is seen as a key endorsement of Tesco's expansion strategy by market analysts.

But Tesco has attracted fierce criticism for the impact its stores have on small local outlets in the UK.

The UK's Competition Commission is engaged in a study into the fall-out from the growth of Tesco and other large grocery chains.

Tesco sees overseas investment as the key to corporate growth. It has 155 outlets in Thailand and has just opened its first store in Beijing.

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