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Tuesday, 15 January, 2002, 17:15 GMT
Tesco loses sales edge
Tesco, the UK's biggest selling supermarket, has failed on home territory to match the Christmas sales growth of arch rival J Sainsbury.

British supermarkets by size
1: Tesco
2: Sainsbury
3: Asda
4: Safeway
5: Somerfield
Excluding takings from petrol stations, Tesco reported a 6.2% rise in UK Christmas sales for the seven weeks ending 5 January.

That growth was narrowly beaten by Sainsburys, which interpreted its own rise of 6.8% as evidence that customers were returning to them from the stores of their arch rival.

But analysts pointed out that this year's sales gains came on top of almost flat sales the previous year at Sainsburys, while Tescos reported 6% growth.

And an aggressive policy of price cuts - totalling 230m during the year - will also have impacted on the overall sales figures for Tescos, a company spokesman told BBC News Online.

In the City, Tesco shares edged 0.75p higher to 237.75p on the news, while J Sainsbury stock closed 11p up at 375.5p.

Pace-setter

Sainsburys boasted on Monday that it was taking customers away from Tesco for the first since losing the top spot in 1995.

Christmas trading update - Tuesday
New Look: +8.8%
Debenhams: +8.5%
Tesco: +6.2%
Whitbread: +5.8%
Safeway: +4.1%
JD Sports: +3.0%
Woolworths Group: +1.1% (Woolworths stores: -3.5%)
Mothercare: -4.0%

But Tesco questioned the reliability of the market share figures, stating that its own data for December suggested it was still winning a steady flow of customers from other stores.

In recent years Tesco has set the pace for the food retailing sector, but its competitors are beginning to catch up.

That means Tesco is likely to have its work cut out to repeat its outstanding overall performance of last year.

Analysts, who are used to Tescos outperforming its peers, were slightly disappointed, even though the firm is still on track to meet its profit target for 2001 of 1.22bn ($1.77bn).

Number four and five

Safeway, Britain's fourth-biggest food retailer, also disappointed on Tuesday, with Christmas sales growth coming in at the bottom end of analysts' expectations.

Sales at stores open at the same time a year earlier, rose 4.1% during a 12 week period over Christmas, raising concerns that it may be falling behind in the UK supermarket sector.

But Somerfield - which ranks just below Safeway - fared better, successfully managing to pull itself out of the red.

And its Kwik Save subsidiary achieved sales growth for the first time after many years of decline.

The Somerfield group reported profits of 5.6m in the six months to 10 November, compared with a loss of 9.5m a year earlier.

Somerfield shares rose 9.75p to 100p on Tuesday.

Safeway stock closed unchanged at 307p.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Martin Lewis
"Each chain has solid growth"
See also:

26 Nov 01 | Business
Safeway cyberstore shuts up shop
21 Nov 01 | Business
Sainsbury's profits edge higher
19 Nov 01 | Business
Organic food sales booming in UK
14 Jan 02 | Business
Sainsbury's enjoys strong sales
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