British supermarket operator Tesco will launch a strategic review of its money-losing Fresh & Easy chain in the United States, Sky News reported on Tuesday.
Tesco Chief Executive Philip Clarke will announce in the company's third-quarter results on Wednesday "a strategic review that could lead to the sale or closure of some or all of its U.S. stores," Sky News said without citing any sources.
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Tesco did not return calls for comment on Tuesday evening.
Investors had been calling for a withdrawal from Fresh & Easy which has absorbed nearly 1 billion pounds ($1.6 billion) in capital since it was launched in 2007.
So far these calls have been rejected and less than three months ago Clarke said Fresh & Easy was "fighting nicely" in a tough market.
For the first half of 2012, Tesco's U.S. operations lost 74 million pounds, similar to the same period a year earlier.
"Fresh & Easy has delivered a small reduction in losses at constant rates in the first half, with sales performance improving throughout the period," the half year statement said.
Clarke is also facing pressure from struggling UK operations and slowing growth in emerging markets.
($1 = 0.6209 British pounds)
(Reporting by Dasha Afanasieva; Editing by Richard Chang)