28 November 2001
Tesco still top but prices falling

By FWi staff

TESCO has underlined its position as the UKs top supermarket with underlying sales growth of 6.4% for the past three months.

Last week Sainsbury and Safeway reported underlying growth of 5.3% and 5.7% respectively, reports the Daily Express.

Tesco claimed that a price-cut campaign which has seen prices fall by 1% was driving growth. Analysts told the Express that most cuts were in petrol prices.

However, the Financial Times claims that the one per cent price cut shows that conditions are worsening in the British supermarket sector.

This deflation is the highest seen by Tesco in three years.

The store is expected to make annual pre-tax profits of 1.22 billion, against 1.05bn last year.

UK supermarkets have enjoyed a “surprisingly strong” year, due to higher food prices and a switch to better quality products, reports the FT.