Asda stages recovery

Tesco shares came under pressure as Asda recorded further growth in its online food sales, closing the big gap in market share between the two retailers.

TNS Worldpanel shows Tesco's market share dropped 0.3% to 31.1% in October. Asda's rose to 16.7%.

Asda has returned to sales growth of "high single digits" over the last 12 weeks. It has attracted a million extra customers through re-jigged ranges, cost cutting and lower prices.

With seven new stores opened and the store embarking on what it describes as "its most aggressive price-cutting ever", the pace of recovery is expected to quicken considerably in the run-up to Christmas.

Bid rumours swirl around Sainsbury

Takeover rumours continue to swirl around J Sainsbury.

One rumour is that the company could be a target for a private equity bidder (Sainsbury's has £7bn of property, enabling a bidder to offer 500p per share); another has a management buy out on the cards; while a third is linking it to a possible merger with Wm Morrison.

The last is considered the least likely scenario as it would attract the attention of the Monopoly Committee. Fuel was added to the fire with the surprise resignation of Lord Sainsbury as science minister - who has a 15% share stake.

Sainsbury's has delighted the market with a sizzling 123% rise in pre-tax profits to £194m in its first half of 2006, on sales of 8.3%, up £9.5bn - the seventh quarter of sales growth in a row. Operating profit margins are up to 2.43%. Till takings are at 6.2% and rising. Boss Justin King plans to open more stores and expand existing stores.

Northern Foods - long slog ahead

Northern Foods posted profits of £30.5m for the latest half year, against £14.4m last time. Profits were flattered by a one-off cash injection from the sale of NFT, its distribution business. Sales fell from £652m to £645m. Strip out the exceptional item and profits fell to £16m in the first half against £25.7m for the same period last year.