Hunkering down to face the new reality

Tesco has been on the edge of crisis for years, always just about to come unstuck, always just about to lose its touch.

Then it reports profits or sales figures, and the critics go back to mumbling about something else.

Disaster didn't strike again today. Sales growth is less than that of Asda or Morrisons, but that's mostly intentional.

Tesco saw the recession coming and has been pricing its goods to match the new reality. The point is to fend off the new breed of discounters such as Lidl and Aldi and be ready in case the economy gets truly nasty.

Finance director Andy reckons the outlook for next year is "fairly sobering". While rivals focus on growth, Tesco is moving to slash costs on all fronts and hunker down. By next year, no one will remember that Tesco had a moderate third quarter.

Tesco will make full-year profits of something like £3 billion. Those super-discounters are private companies, so we may never know whether the sales they are bragging about were profitable.