Supermarket showdown as rivals report

SUPERMARKET giants Tesco and J Sainsbury are this week expected to report fairly flat sales growth for the first quarter of the year, signalling a slowing of consumer activity across the food sector.

Tesco is expected to report sales growth of between zero and 1.5 per cent tomorrow for the first quarter according to analysts, which say the group’s international operations continue to see development in Asia but are held back by Europe.

“International could be a tale of two halves as a cyclical recovery continues in Asia but is held back to some extent in Europe by the Euro debt crisis,” said Execution Noble in a research note sent to clients.

The group was hit by the news that chief executive Sir Terry Leahy, who has led the group for more than a decade, is set to retire next year. He will be replaced by director and fellow Liverpudlian Philip Clarke.

Meanwhile, rival Sainsbury’s is expected to report like-for-like sales for the same period of between 0.5 and one per cent growth, including VAT on Wednesday. It is thought that excluding VAT, sales would have fallen by between 0.3 and 0.5 per cent.

Last week the group’s annual report revealed that chief executive Justin King earned £8m in pay, pension top-ups and bonuses despite Sainsbury’s reporting its slowest sales growth in five years.

Supermarkets have been hit by the removal of food inflation and the rising petrol prices.