Britain's largest supermarket group, Tesco, has reported industry-beating sales growth over Christmas, but the result was eclipsed by an intensifying bid battle among its main competitors.
Tesco said like-for-like sales grew 4.8% in the seven weeks to January 4, including volume growth of 5%. This was better than its three closest rivals, all of whom are involved in a takeover struggle to create a new force in food retailing to challenge Tesco's supremacy.
Britain's fourth-biggest grocer, Safeway, has already agreed a £2.6 billion sterling offer from smaller rival William Morrison Supermarkets. However, Safeway is also now in the sights of the second and third biggest chains, J Sainsbury and ASDA, which is owned by the world's biggest retailer, Wal-Mart. Both have said they may bid.
Tesco's group sales for the seven weeks around Christmas rose 11.1%, led by international sales up 24.9%. Tesco aims to have half its sales outside the UK by year-end, and eight of its 10 offshore operations are now profitable.
Tesco said its international operations were on target to generate earnings before interest and tax of £140-160 million in the current financial year.
Overall like-for-like sales growth of 4.8% over Christmas beat its near rivals.
Sainsbury's reported UK sales up 1% for the 12 weeks ended January 4, Morrisons' sales were up 3.4% in the six weeks ended January 5 and Safeway sales rose 4.2% in the four weeks ended January 4. Safeway had its best ever Christmas, though sales for the whole third quarter were up only 0.1%.
