Tesco's edge behind Irish grocery rivals

BRITAIN and Ireland's largest supermarket group, Tesco, continues to set the pace in the UK and is understood to be neck and neck with Musgraves in the Irish market.

According to the latest Nielsen figures Tesco in Ireland controls 23.7% of the Irish grocery market marginally behind arch rivals Musgraves and Dunnes Stores.

Musgraves claim a 24% market share boosted by a very good Centra performance in Connaught and Ulster where the group has been expanding.

As Wal-Mart eyes up Sainsbury in the battle for supremacy in one of most competitive retail grocery markets in Europe, Tesco continued to produce the good news that keeps the UK markets happy.

Tesco confirmed its results in the UK were very satisfactory with like-for-like sales growing by 4.8% in the seven weeks to January 4.

That included volume growth of 5% - 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.

About Ireland the group was less forthright. But a spokeswoman said "we are very very happy with our results over the period in Ireland.

She confirmed that the Monday before Christmas was the day shoppers came out with a vengeance after what she admitted was a slow start to the Christmas period for the group in Ireland.

Meanwhile the battle for control of the grocery market in the UK continues to hot up as many predicted.

Britain's fourth-biggest grocer, Safeway which has already agreed a Stg£2.6 billion offer from smaller rival William Morrison Supermarkets may not be targeted by Wal-Mart and is already in the sights of the other major store group J Sainsbury.

ASDA, which is owned by the world's biggest retailer, Wal-Mart is the third possible payer in the battle of Britain's grocery stores.

Both have said they may bid.

"Obviously these are significant developments and we are monitoring them very closely," a Tesco UK spokeswoman said.

"We never comment on mergers and speculation in relation to ourselves," she added.

Tesco shares were unchanged at Stg183p in opening trade on Tuesday.

Tesco's sales figures were issued within minutes of a statement from Wal-Mart that it was considering all-cash bid for Safeway, which has been losing out to bigger rivals and has long been seen as the grocery sector's juiciest takeover target.

All Safeway's suitors would have to overcome competition hurdles before pulling off a successful bid.

Since Tesco took over Quinnsworth, takeover speculation has come and gone. The big fear among Irish supermarkets at this stage is that Wal-Mart, which has a strong presence in the UK will make the Irish market its next port of call.

It is a massive group and a move into the Irish market would cause serious upheaval in the Irish market.

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