Tesco insists it is on track to launch its US venture later this year - even though estimated start-up costs have trebled and progress has been dogged by planning delays.

Tesco is to begin recruiting and training for its Fresh & Easy Neighborhood Market stores shortly. This, along with other pre-launch costs and an initial trading loss, will take start-up costs from the originally anticipated £20m to £65m, the company admitted.

Meanwhile, construction of Fresh & Easy's 820,000 sq ft distribution centre in Riverside, California had been slower than expected because of the bureaucracy involved in US building regulations, admitted Tesco chief executive Sir Terry Leahy, who was speaking as the retailer unveiled record results (see below).

"[The distribution centre] has been held up a little bit because of the building process. We have to get a building permit at every stage of construction."

Site acquisition for 10,000 sq ft stores was going well, he said, and a "significant" number of stores would be opened in California, Nevada and Arizona at the launch of Fresh & Easy - expected to be in the autumn. "Our arrival is well timed as people in the US are looking for an alternative to big box out of town retailing parks in light of climate change," said Sir Terry.

Tesco has now expanded its Fresh & Easy website and has sent out its first newsletter to households in Arizona.

The letter explains that the offer includes own-label products containing no trans fats or artificial colours or flavours. It also promises "great food you can trust at unbelievably low prices".

Worldwide, Tesco's international sales were up 17.9% to £11bn, with like-for-like sales up 2%. "We can claim this has developed into one of the most successful, if not the most successful approaches to international retailing," said Sir Terry.

Tesco plans to open its first store under its own name in Japan next month.

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