Tesco has retained its position as the UK’s number one supermarket group over the Christmas period, reporting a higher sales increase than its rivals over the seven weeks to 4 January. Tesco’s ability to undercut the high street on sales of electrical goods boosted performance and brought the company out on top.

Tesco, the UK’s leading supermarket chain, has reported strong sales over the Christmas and New Year period in 2002. Like-for-like sales – which ignore the effects of new stores – increased by 4.8% in the seven weeks to 4 January.

In its 152 international stores, sales grew by 24.9% over the same period and eight out of ten of Tesco’s offshore operations are now profitable. This is good news for the company, which hopes that by the end of the year, half of its revenues will be generated outside the UK. Strong growth abroad meant that group-wide sales growth for the period reached 11.1%.

Tesco outperformed most of its UK competitors over the festive season; Sainsbury reported growth of 1%, Morrison’s saw 3.4% growth and Safeway had its best Christmas to date, with a 4.2% increase in sales.

With the ability to stock up on high value goods and the capability to distribute them nationally, Tesco was able to offer the consumer popular high value gift ideas, at a slightly lower cost than the high street.

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Tesco has led the way for supermarkets to branch out beyond perishable consumables and its online electrical warehouse, with its extensive product range, is proof of this. Sales of higher margin goods such as DVDs and wide screen televisions helped to boost Tesco’s Christmas performance and sales of PCs increased by 130% against the previous year’s period. Tesco gave the customer a one-stop shop for its Christmas needs and reaped the rewards.

Frustratingly, Tesco’s dominance in the UK market rules it out of bidding for rival chain Safeway but the company is still monitoring developments closely. A takeover by one of the larger chains, such as Sainsbury, would result in the sale of a number of outlets to avoid competition concerns. So, while Tesco may not be able to grab the whole pie, there may be still something left for it to take away.

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