Tesco has no need to take part in the consolidation sweeping through the world's supermarket industry, claims chief executive Terry Leahy. Speaking as the company confirmed its status as the UK's top grocery retailer, Leahy insisted: "We have a very strong strategy to give us very good growth. We have got a world leading capability and good scale, and we will use that effectively. "We do not have a need for these combinations." While Tesco would look at any merger opportunities that came its way, Leahy made it clear they would have to fit with the company's strategy for moving the business forward and would have to increase shareholder value. And Tesco bosses played down any prospect of the company acquiring businesses in western Europe. Leahy said Tesco's strategy had four strands: maintaining a strong UK business; growing overseas (largely by organic means); building a powerful non food business; and following consumers into new areas like home shopping. In the UK, Tesco saw sales grow by 7.4% to £18.3bn in the year to February 26, with like for like growth of 4.2%. The company's market share rose by 0.1% to 15.5%. Leahy said the year had been marked by significant price deflation in grocery and he warned the "extremely difficult" trading conditions would continue this year with sales growth hard to come by. Tesco invested £380m on price cuts last year, but managed to maintain its operating margin at 5.9%. Leahy said this was due to volume increases and the £100m of savings made through efficiency gains, particularly in the supply chain. And he said Tesco would continue to attack its cost base ­ with the Worldwide Retail Exchange b2b initiative playing a major role. The company also plans to invest £800m in the UK this year to add 1.2 million sq ft of new space ­ which includes plans to open five Extra hypermarkets, bringing the total to 14 by this time next year. Leahy said the extra space formed a vital part of Tesco's plan to double its 3% share of the UK's £75bn non food market in three years. It aims to have 140 Non Food Worlds in stores by next February and is on track to be generating £5bn of non food sales by the end of 2002. "Non food is growing faster than food as new space comes on stream and as we develop our global non food capacity," said Leahy. {{NEWS }}