Tesco's American dream over as US retreat confirmed Customers at a Fresh & Easy store in Los Angeles. Photograph: Damian Dovarganes/AP Tesco has announced an embarrassing retreat from the US after pouring £1bn into a bid to take on the mighty Wal-Mart in its own backyard. The supermarket group's deputy chief executive, Tim Mason, who heads the loss-making US Fresh & Easy chain, is to quit the company after 30 years. The UK's biggest retailer confirmed on Wednesday it is launching a "strategic review" of the US business. The chief executive, Phil Clarke, who took over from Sir Terry Leahy last year, said that while all options are under consideration it is "likely, though not certain" that Tesco will quit the US entirely. He said it was now clear Fresh & Easy "will not deliver acceptable shareholder returns on an appropriate timeframe in its current form." The group has in recent months received "a number of approaches" from parties interested in buying all or part of Fresh & Easy, or in partnering with Tesco to develop the business. He promised an update when the group presents its full-year results in April. Mason, once seen as a candidate to replace Leahy, will quit the group immediately. Clarke said he had "played an important part in our success over a 30-year career with the company, and he leaves with my thanks and good wishes." News of the end of Tesco's American dream came as the group reported another disappointing set of sales figures. Underlying sales in the UK fell by 0.6% in the third quarter, with Clarke describing the performance of the general merchanside division as "not good enough." Its figures lag well behind rival Sainsbury's, which recently reported a 1.7% increase and has been gaining market share. Despite the gloomy trading news, Tesco shares jumped 4% on Wednesday morning to 340p as analysts welcomed the US move. Unions in the US expressed anger over the fate of Fresh & Easy, which they said could have been avoided. Pat O'Neill, United Food and Commercial Workers union vice-president, said: "Thousands of Tesco workers at Fresh & Easy stores in the US now face their holiday season filled with uncertainty and fear over whether their jobs and their stores will be there in the new year. These job losses could have been avoided if Tesco had chosen to engage with community stakeholders and its customers to address the many underlying problems and warning signs of the troubled Fresh & Easy model. He called on Tesco to include all community and labour stakeholders in the review process. The plans came after two years of intensive research which involved Tesco sending senior executives from the UK to live with Californian families, assess the way they shopped and ate, and to build secret test stores.