Tesco gets 3pc boost as brokers bet on success

TESCO shareholders were dancing in the aisles for a second day running as the supermarket chain was named one of the fastestgrowing in the UK.

In a boost for the retailer, figures reveal Tesco and Morrisons outpaced the rest of the so-called ‘Big Four’ supermarkets with sales growing at 2.7pc in the 12 weeks to February 25.

To put that into context, though, discount chains Lidl and Aldi continued to motor ahead of the competition with growth of 13.3pc and 13.9pc respectively.

It was the second piece of good news for Tesco in as many days after it started the week by waving its hotly-anticipated £3.7bn acquisition of Booker Group, the wholesalers, over the line.

Analysts at Barclays said Tesco’s core UK business is ‘in good health’ and has given the supermarket an ‘overweight’ rating.

In a note to investors, it said: ‘We believe that Tesco’s recent UK sales trends look robust, especially if we look at the core grocery offer. More importantly, we think the outlook remains positive.’

Tesco jumped 3.4pc, or 7p, to 211p, although Morrisons ticked up just 0.1pc, or 0.2p, to 225.7p. Meanwhile, shares in rival Sainsbury’s struggled after the firm announced a £100m pay rise for 130,000 staff.

The new deal will take its base rate of pay from £8 to £9.20 an hour from September. For employees working in central London, pay will increase to a minimum of £9.80 an hour.

But it also means staff will not be paid bonuses or for breaks.

Sainsbury’s says it will fund the pay increase through ‘ongoing cost savings’ but shareholders weren’t convinced. Shares slid 3.2pc, or 8.2p, to 244.7p. The

FTSE 100 nudged up 0.43pc, or 30.77 points to 7146.75 after strong performances from the basic materials and energy sectors.

Elsewhere, office tycoon Mark Dixon had a cheeky dig at a US rival over its market valuation.

Speaking to BBC Radio 4 after announcing a profit slide at his firm IWG, Dixon said, tongue firmly in cheek, that it annoyed him rival We Work was valued at £15bn when his own was £2.2bn.

He suggested We Work’s share price was over-inflated by its attempts to woo in vogue tech firms. ‘It does annoy me,’ said Dixon. ‘I am a competitive soul. It is one of the things that gets me up in the morning. We do the same as We Work, we are just much bigger – about 20 times the size of We Work; we are in 100 countries.

‘We also have the same tech platform, so there is really no difference. I think they are just a lot better, obviously, at marketing themselves.’

Despite the fall in profits, Dixon said he looked forward to the future ‘with great confidence’ as the market for office space stabilises. At closing, shares were up nearly 1pc, or 2.3p, to 242.5p.

Shares in construction equipment rental firm Ashtead fell after it refused to boost its full-year guidance, despite posting healthy figures for the three months ending January 31.

The FTSE 100 giant also revealed finance director Suzanne Wood, who has been in the position for nearly six years, was leaving to spend more time in the US. Shares dived 5.5pc, or 111.5p to 1917.5p.

Shares in online retailer Findel rocketed after it revealed plans to strengthen its ties with Sports

Direct, its largest shareholder. It follows two pilots in which Sports Direct-licenced products were sold on the website of Findel subsidiary Express Gifts. As part of the love-in, Sports Direct head of strategic investments Liam Rowley will attend Findel meetings as an observer.

Findel’s shares jumped 7pc, or 15p, to 229p, while Sports Direct rose 2.3pc, or 8.5p to 370.5p.