The world is not enough

***Tesco - the world is not enough... bad news is good news for M&S

***Rover's still grumbling away... generous Governments... economic harmonisation

***Shock horror, houses are falling down...

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- Is Tesco going to take over the world? Results announced yesterday show that profits at Britain's best-loved superstore group broke through the £2bn level last year. Tesco now gobbles up £1 in every £8 spent in the UK. Group sales rose 12.4% to £37.1bn; UK turnover increased 11.9% to 29.5bn; Asian and Central / Eastern European turnover was up 13.1% to £7.6bn - representing one fifth of total sales; AND the group sold 15 million books in 2003; and even sales at Tesco.com rose 24.1% to £719m - with profits that were up 52%. There isn't a single part of the average Briton's life that Tesco isn't a part of.

- But the firm isn't stopping there. Tesco took the opportunity to announce huge worldwide expansion plans too. It is now the third biggest retailer in the world and it's aiming at the number one spot. The company is set to open 5.4million square feet of new selling space outside the UK by the end of the year. 1.45million will cater for the Chinese market - with 15 new hypermarkets planned there.

- Bet they're jealous over at Marks & Spencer where investors may be regretting refusing Philip Green's offer last year. Releasing its trading statement yesterday cannot have been a happy event. Like-for-like sales in the fourth quarter fell by almost 5% and its share of the UK clothing market continued to shrink. The shop, which once dressed all our mothers and grandmothers, now finds itself hanging on to its high street position by a thread. And pre-tax profits fell about 20% last year.

- However, there are glimmers of light to be found if you look hard enough. The pace of decline is slowing. The fourth quarter was nowhere near as dismal as the third had been. We're not sure that's quite good enough but the City - which is often too easily pleased - seemed happy enough. The shares ended the day up 4% at 354.75p.

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- Rover is still in the news. It may be impertinent to question the government's motives for this week's bail out of £6.5m - but when it was suggested yesterday that the government would cop another £6.5 m to cover the wage costs for next week too - alarm bells should have started ringing everywhere. Has the government's splendid generosity anything to do with the election or are they handing out taxpayers' cash to this loser of a company out of the kindness of their hearts? We couldn't help but wonder...

- We're also wondering how the UK government will react if the European Commission says it can't carry on with its pre-election giveaways. It emerges - a little late in the day if you ask me - that the UK government isn't actually allowed to hand out wads of cash to a car maker whose life support machine is cranking down without Europe's consent. Which it announced yesterday it might not give. This economic harmonisation business can be tricky, can't it?

- One are of our economy that the EU has not yet stuck its fingers into is the UK housing market. Given the collapse in transactions over the last few months, we can't say we're remotely surprised to see that figures released yesterday showed that the average house price fell about £1,000 to £179,491 between January and February.

- The only surprise left is how long it is taking people to accept the fact that the housing market has changed completely in the last year. If you bought in London two years ago you won't even break even if you sell now - especially once you count in the costs of estate agents and stamp duty. But you'll never find anyone who will admit to losing money on property. Everyone thinks that your house should - that it must - make you money. Losing money on a house isn't just losing money - it's a shameful failure.

- That's why people won't cut the asking prices on their properties. When they can't sell they declutter. They paint in neutral colours. They bake bread. They buy scented candles. But they don't do the one thing that will make their house sell: cut their price.

Until next time,

Annunziata Rees-Mog