Like-for-like sales growth of 6 per cent in the half-year and in current trading sets the benchmark for the rest to follow. The rise in Tesco's UK market share from 14.2 to 15 per cent probably comes more at the expense ofgroups like the Co-Op and the independents than the other three superstore groups, but it is impressive nevertheless.
The 9 per cent profits advance was achieved despite lower European profits and a pounds 2m loss on the start-up of its financial services division. In financial services, Tesco is pushing ahead with a savings account like Sainsbury's and mortgages could be on the way. It is also targeting non- food ranges in store and is keen to sell more newspapers, childrenswear, health and beauty products. If the manufacturers can be encouraged to supply them, the group will also soon be selling perfume, branded sportswear and televisions at lower prices.
With the UK business firmly under control, Tesco is looking further afield. The pounds 600m Quinnsworth acquisition in Ireland is being bedded in and organic expansion in central Europe, where sales are powering ahead, will continue. The Catteau chain in France has been disappointing. Tesco would like to increase its share in France with a deal, but it is finding the prices attached to the larger chains too rich.
On NatWest's full-year profits forecast of pounds 819m, the shares, up 5.5p to 441.5p, trade on a forward rating of 17.
That is a slight premium to the market but justified given the track record. Still worth picking up.