Tesco , the world's No.3 retailer, is mothballing 12 stores at its loss-making Fresh & Easy business in the United States due to weak local economies, it said on Tuesday.

The British group said it remained committed to the chain, which it is aiming to lift to break even by the end of its 2012-13 financial year.

Fresh & Easy continues to grow, and we are opening 25 stores between now and the end of March, so for every store we're closing we are temporarily opening two, it said in a statement.

Tesco said there was not enough growth in sales and customers at the 12 stores in California, Arizona and Nevada to justify keeping them open.

It did not give a timeframe for when the stores might reopen and added all affected staff would be offered a position at a nearby outlet.

Shore capital analyst Clive Black said the move could push up his forecast full-year loss of about 125 million pounds for Fresh & Easy, in part because it would mean lower volumes going through the chain's manufacturing business.

Tesco launched Fresh & Easy with great fanfare in 2007, but its rapid expansion plans were derailed by recession.

The group, which mothballed 13 Fresh & Easy stores in 2010, has also admitted to mistakes, and has changed the stores to be less spartan, and is also experimenting with a loyalty card and convenience store formats.

Tesco is due to report Christmas sales figures on Thursday. Data from market research firm Kantar Worldpanel earlier on Tuesday showed the group lost grocery market share in its main British market to rivals including Wal-Mart's Asda and J Sainsbury in the 12 weeks to December 25.

(Reporting by Mark Potter; Editing by Tim Dobbyn)