Tesco creates 20,000 jobs as lead over Sainsbury's grows

TESCO SHOWED that it is extending its lead over its struggling rival Sainsbury's yesterday, when it reported strong trading figures and confirmed plans to create 20,000 jobs worldwide this year.

Announcing a "solid start to the year" John Gardiner, the Tesco chairman, told shareholders at the company's annual meeting that underlying sales in the three months to the end of May were up by 3.7 per cent on the same period last year.

This is better than the industry average and significantly ahead of Sainsbury's sales growth. In a poor set of results earlier this week Sainsbury's indicated that its underlying sales are at best flat on last year and possibly lower.

One analyst said: "The gap between Tesco and Sainsbury's is enormous and widening."

The analyst said that Tesco was well placed to take advantage of the distractions of its rivals. Sainsbury's is starting on a full-scale makeover that will include a new corporate image and cost-cutting exercise. Asda is embroiled in its merger with Kingfisher, while Safeway is struggling. "It all leaves the way clear for Tesco to power ahead," the analyst said.

Tesco has 15.7 per cent of the UK's pounds 89bn grocery market, according to figures compiled by the Institute of Grocery Distribution. This compares with just 12.7 per cent held by Sainsbury's.

Analysts point to additional initiatives by Tesco that are expected to push sales still higher. These include a holiday prize promotion and fresh mailshots to members of its ClubCard loyalty scheme.

At its annual meeting yesterday Tesco confirmed its plan to create 10,000 jobs in the UK this year. These will mainly be in 26 new stores and in other outlets that are being extended, while 20 per cent will be in its home shopping service which is being expanded.

The group is also creating a further 10,000 jobs outside Britain. Thirteen new stores will be opened in Tesco's central European operations in Hungary and the Czech Republic as well as in South-East Asia.

Analysts are forecasting that Tesco will make full-year profits of pounds 940m this year. This compares with just pounds 730m for Sainsbury's.

The expansion plan is in stark contrast to Sainsbury's, which has announced 1,600 job cuts in the last few weeks. The company is opening new stores but they will be smaller than the group's average size and in total will add only half the new space that Tesco will open this year. Tesco shares closed 1.5p higher at 185.25p.

Elsewhere in the sector Waitrose, part of the John Lewis Partnership, announced a 22 per cent increase in sales in the week to 19 May.

The figures were well ahead of the group's estimates and helped by the late Bank Holiday in May and good weather, which helped sales of salads, fruits and chilled ranges. At the company's department stores sales were up by 5 per cent in the same week last year, helped by strong fashion sales.

PROMOTED VIDEO
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor