Threadeneedle: Competition Commission's investigation into Tesco

Following the early outcome of the Competition Commission's investigation into Tesco, Leigh Harrison, Head of UK Equities at Threadneedle Investments commented:

"We are pleased with the earlier outcome of the Competition Commission's investigation - effectively saying that even though Tesco has a dominant position, it is not being used to the detriment of the customer. However, we remain vigilant as the investigation is still ongoing.

"The fact that Tesco has such a dominant position in the market - effectively being able to use its significant sales base to buy better, keep its prices low and attract more customers - is one of the reasons it features highly in our funds.

"Tesco is one of our favoured stock picks because of its strong growth franchise. In other words, the ability to grow earnings year on year - driven by the roll-out of new stores, the rapid rise in sales of non-food merchandise and expansion in Eastern Europe and Asia Pacific.

"The holding in Tesco is complimented by a large position in William Morrison, now showing the benefits of the Safeway integration - and looking to benefit from the return of price inflation to the sector and a growing share of the consumer's purse."

Threadneedle holds 2% of the shares in Tesco plc.