City Talk: Tesco's forward march
One of the largest retailers in the world, Tesco, announced it is seeing a "steady consumer recovery in the UK" as it announced sales that were better than the market expected over the past quarter. Tesco worldwide delivered a 7% rise in overall sales, with UK like-for-like sales rising by 1.5% up on analysts' expectations of a rise of only 1%.
Jonathan Pritchard, retail analyst at Oriel Securities, reckons, in the fine print of the trading statement, there are indications that Tesco will outperform its UK rivals. The UK still accounts for some 70% of the company's sales and profits.
The trading news came out at the same time as independent research company Kantar Worldpanel announced that Tesco's market share had increased to 30.7% from 30.6% last year. Morrisons' market share fell to 12% from 12.1%.
Tesco outlined special measures that it had taken to keep stores open in snow-bound Britain. The retailer bought in 3,000 tons of grit 6% more than last year. It has also bought 150 quad bikes with snow plough attachments to clear paths for customers.
Fresh speculation on Qatari bid for sainsbury's
There is growing speculation the Qatar Investment Authority could launch a fresh bid for Sainsbury's. The authority has a 27.5% stake in the retailer and could make a full bid of 450p per share.
Qatar failed to buy Sainsbury's three years ago, but has since scooped up a number of international businesses as it seeks to diversify. Qatar Holdings, the investment arm of the Qatar Investment Authority, bought Harrods earlier this year for £1.5bn. Traders urged caution over this most recent market speculation as rumours of a full bid have done the rounds before notably in October last year.
Now that the Sainsbury family are becoming more relaxed about fighting off a bid from Qatar, a new bid could emerge. However, the family is thought to want £6 per share for their key stake.
Greene King relies on food for profits
Greene King, the pub owner and brewer is increasingly focusing on food and it is working. Interim revenues for the Suffolk-based group, which operates 2,452 pubs across the UK, rose to £484.1m in the 24 weeks to 17 October, compared with £464.5m in the same period last year. This reflected a robust performance in the managed foods division. Pre-tax profits after exceptional costs rose to £60m from £51.2m last year.
Food is the particular growth driver, according to chief executive Rooney Anand, and food sales now account for 39% of total revenue, up from 37% for the same comparable period. Revenues from Greene King's managed pubs division rose by 5.6% to £293.4m.
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