Tesco expected to beat City forecasts
Tuesday will see results from Tesco which are expected to beat City forecasts and confirm that the group saw sales grow by 3% over the festive period. While beating analyst forecasts in the current economic climate is no small achievement, it is becoming more and more apparent that Tesco is falling behind the likes of Sainsbury, William Morrison and Asda, at least over the festive period. So are we seeing a seachange in the UK supermarket sector?
While there is no doubt that competition in the supermarket sector continues to increase it is becoming more and more apparent that Tesco, while still deemed to be the most powerful of companies in the sector, is under pressure. In a bid to increase sales just prior to festive period, and over the festive period, Tesco used its loyalty card system to perfection even sending out vouchers early so that customers could make use of them over Christmas and New Year. However, many believe that this is in effect increasing short-term sales at the expense of medium-term sales.
It is highly likely that we will see the likes of Tesco and other leading supermarkets look to branch out, and expand existing operations, into new areas of the UK economy in the weeks and months ahead. Banking is an obvious choice with leading supermarkets playing host to millions of customers on a daily basis and having a ready-made client base. But can the success of traditional supermarket shopping be transferred into other areas of the economy?
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