Tesco puts on a sales spurt

SALES growth has accelerated at Tesco, already Britain's biggest and most profitable grocer, leaving struggling competitors such as J Sainsbury and Safeway further behind.

Chief executive Sir Terry Leahy cheered the City today with news of a 6.9% increase in like-for-like sales growth in Britain over the 14 weeks to 15 November. That compares with 6.3% in the first half, and is above City forecasts.

Total UK sales in the third quarter rose 14.6%, including a 4.3% advance from the group's T&S convenience stores chain. For the group, overall sales rose 17.5%.

Leahy said all parts of the business had driven the growth. There was a strong performance overseas, with international sales ahead by 31% in the quarter.

All countries contributed to the growth, despite some tough trading conditions. Tesco will have 189 hypermarkets operating overseas by the year end.

In Britain, Leahy said the group's non-food operation 'goes from strength to strength'. Its clothing business lifted third-quarter sales by 34%, a growth rate six times higher than the general market.

Tesco's sales growth is far above rival Sainsbury's, which last week checked in with an underlying sales rise of just 0.1%, although the City was cheered by the appointment of its new chief executive, Marks & Spencer's man Justin King.

Along with other food retailers, Tesco enjoyed a boost from last weekend's Rugby World Cup, with soaring sales of beer, bacon and eggs.

Tesco shares, strong yesterday, rose a further 6 1/2p to 251 1/4p, their highest for more than a year.