), a major UK-based grocery store chain, announced today that Tim Mason, the CEO of Fresh & Easy, its U.S. grocery store segment, would step down and it would either sell or close its U.S. stores. Warren Buffett
, who owns 5.08% of Tesco, called the move into the U.S. market “foolhardy,” prompting the question of whether he’ll buy more Tesco shares now that the company has followed his advice.
Buffett increased his holding of Tesco in January 2012 from 3.6% of the company to 5.08%, for $774 million, bringing his total investment to over $2 billion. Neither he nor his partner, Charlie Munger, approved of the company’s decision to open stores in the U.S. At Berkshire Hathaway (BRK.A
)’s annual meeting, Munger said the strategy was “ill-advised,” saying, “I could have told [Tesco] if they had asked me, but they didn’t.” He cited competition from present stores such as Costco (COST
) and Trader Joe’s as primary reasons. Continue Reading »