Tesco set to outgrow international rivals

17th Feb 2011 16:31

Catching up with the world's biggest retailer, Walmart, is a daunting task, especially when it is set to notch up annual sales of $500bn by 2014, but UK champion Tesco is set to outperform the US titan over the next few years, according to food and grocery research company IGD.In a study of the top global retailers' prospects in the period up to 2015, IGD forecasts global growth of 7.5% a year for the Cheshunt-headquartered retailer, which would push Tesco's global revenues up to £106.1bn by 2015. Tesco's group sales, including VAT, totalled £62.54bn in the year to 27 February 2010. That sort of growth rate would see it grow faster than world number one Walmart, and the number two operator, France's Carrefour, not to mention German retail giant Metro.IGD predicts sales growth of 4.7% a year for Walmart, which, in sterling terms, would push up sales to £401.8m in 2015. "Global retailers that want to achieve the highest growth rates are those that are building a presence in emerging markets. Rapid urbanisation and a growing middle class will create big opportunities in countries like Brazil, China, Russia and India," predicted Joanne Denney-Finch, chief executive of IGD.Tesco has been using profits from its core UK business, where its market share is typically just above 30% of the grocery market, to grow its overseas businesses. Sales in Asia in fiscal 2009/10 totalled £9.07bn, just behind continental Europe's £10bn contribution, while the fledgling US operation chipped in with £354m.There have been signs, however, that Tesco is struggling to maintain its market share in the UK, leading some to suggest it has taken its eye off the ball.Harping on this theme, Denney-Finch noted: "Each market is different and nobody should take their eye off the mature and domestic markets which still provide the bulk of sales for the international players."