Stockbroker BCP has published an interesting study of the European retail sector, now subject to increasing competition following the acquisition of Asda by the US giant, Wal-Mart and the merger of Carrefour and Promodes in France.

These moves are likely to spark further acquisitions and mergers, the broker says, and have already introduced new competition into Europe.

Against this background, BCP believes that the only British food retailer worth buying at the moment is Tesco, based on its strong expansion across Europe. Elsewhere they believe that WalMart itself is worth a punt, as well as the Dutch retailer Ahold, already with operations in the US as well as Europe and well placed to participate in the restructuring of the European sector.