Tesco Hits Record Profit, But Lags in U.S.

British supermarket giant Tesco (TSCO.L) shrugged off the global recession to post annual revenues up 13%, to $79 billion, and pretax profits that blew past the magic £3 billion mark ($4.4 billion), up 5.5% from the previous year. But even as it unveiled the highest profits ever recorded by a British retailer, Tesco—ranked No. 3 in the world behind Wal-Mart (WMT) and France's Carrefour (CARR.PA)—was forced to concede that it finds doing business in the U.S. not so easy.

After all, last year was when Tesco's much-heralded U.S. venture, Fresh & Easy, was supposed to take off. Instead, the West Coast chain of midsize food markets posted higher-than-expected losses for the year ended Feb. 28 of $206 million, up from $90 million the previous year. Prospects of achieving breakeven even this year look increasingly remote.