Food groups and general retailers were at the heart of City action during a week driven by the Competition Commission’s early findings on the grocery market, takeover tensions and bid speculation.

Citi concluded that the competition watchdog’s report was pretty much what the market had expected and said: “We see Tesco’s competitors being boosted a little by the proposed changes to the competition test, but Tesco as a potential winner if it becomes easier to open stores out of town.”

Blue Oar Securities agreed and said: “Any weakness in Tesco’s share price should be seen as a buying opportunity.”

Separately, Panmure Gordon looked forward to Tesco’s US debut next week and envisaged a “substantial growth opportunity”. On Tuesday, Tesco revealed it had raised US$2 billion (£965.2 million) in its first Stateside bond issue. The fundraising was designed to introduce US bond investors to the British retailer.

Qatari fund Delta Two’s difficulties in financing its proposed acquisition of Sainsbury’s and a Takeover Panel deadline for the deal knocked the supermarket group’s share price. Pali International noted: “We think the Qataris will cough up to get the deal done, but we can understand why some investors are nervous that the deal could collapse.”

Kingfisher, which plunged to a five-year low just a fortnight ago, had the week’s biggest rise on the back of vague bid chatter. Also in the deal spotlight was Halfords, after resurgent talk that Japanese retailer and investor Autobacs might be ready to pounce.

Sports Direct delivered a setback to Nike’s attempt to buy Umbro after doubling its stake in the soccer shirt company to almost 30 per cent.

Seymour Pierce said: “Sports Direct could be looking to increase negotiating leverage by building a blocking stake or looking to extract a higher price from Nike. Given Mike Ashley’s history of acquiring underperforming brands, Sports Direct could launch a counter offer.”

Variety store group Woolworths posted group sales up 16.6 per cent in the 38 weeks to October 27, but retail like-for-likes were cumulatively down 0.4 per cent. Chief executive Trevor Bish-Jones remained cautious about Christmas trading conditions, but said: “We are confident that the businesses are in good shape operationally.”

Broker Landsbanki, advising hold, noted: “Retail was up against some tough weather in August, major sporting distractions on at least a couple of Saturdays and October comps that benefited from a TV ad campaign for the Big Red Book.”

On AIM, United Carpets reported trading in line with expectations at its AGM, while Dobbies, in which Tesco has a majority stake, said it would not pay a dividend, but would use the cash to fund future growth.

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