[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 25 November, 2003, 18:20 GMT
Tesco races ahead as sales soar
Tesco store
Tesco has put further distance between itself and its rivals with another sharp rise in sales.

The UK's leading grocer said like-for-like sales - which strip out the effect of new store openings - rose 6.9% in the 14 weeks to mid-November.

The figure beat analysts' forecasts, and compared with flat sales growth from rivals Sainsbury and Safeway in the three months to mid-September.

Tesco said the rise partly reflected strong growth in non-food sales.

Global strength

It added that its overseas stores - spread across eastern Europe and south-east Asia - had also performed well, with sales up by 31%.

"This is stronger than we were expecting, and I think stronger than anyone was expecting," said Mark Hughes at Numis Securities.

Most analysts had predicted like-for-like sales growth of between 4% and 6.2%.

However, Tesco said it expected sales growth to moderate in the months ahead.

"We would expect a return to more normal levels of trading in the future," Tesco finance chief Andrew Higginson told Reuters.

Stiff competition

Tesco's latest sales numbers confirm its pre-eminent position in the UK grocery sector, with its share of the market now estimated at 27%.

They will make grim reading for third-ranked Sainsbury, which lost the number two spot to Asda earlier this year, and is struggling to deliver sales growth despite an expensive store refurbishment programme.

Sainsbury and Asda face a fresh competitive challenge from Bradford-based Morrison's, which in September won regulatory approval to launch a takeover of fourth-ranked Safeway.

The other three major supermarket chains - which had also expressed an interest in buying Safeway - were barred from bidding on competition grounds.

However, the three firms are in the running to buy 53 Safeway stores that Morrison must sell as a condition of its takeover going ahead.

Tesco shares closed 3.3% higher at 252.75p.

Tesco hails 'outstanding' results
16 Sep 03  |  Business
Tesco moves in on phone market
01 Sep 03  |  Business
Tesco to hire another 3,500 staff
17 Jul 03  |  Business
Tesco wins pay battle
13 Jun 03  |  Business
Tesco buys Japanese retailer
10 Jun 03  |  Business
Tesco celebrates profits boom
08 Apr 03  |  Business

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific