Tesco has had its headquarters here since the days when Jack Cohen was piling it high, selling it cheap and doling out Green Shield stamps as an incentive to customers. Today, when the company is making more than £2 billion profits from shops in a dozen countries, it still plots its course from dreary Delamare Road.

Undeterred by the utilitarian surroundings, Sir Terry Leahy, the intense Liverpudlian who joined Tesco in 1979 and has been running the business since 1997, has boundless ambitions for it. The speed with which he is realising them in Britain is beginning to unnerve not only his competitors but also some consumers, who fear that the Tesco machine will become so dominant that choice will be eradicated from the market place.

Tesco wants to sell everything, from food and financial services to DVD players and dresses, to everyone of any social class, and it is succeeding. The figures it produced yesterday showed how in one year it had grabbed business to increase its hold on the British consumer’s purse. Its total UK store sales rose by 11.9 per cent to £39.5 billion. The cut-price electrical goods and widening ranges of toiletries and beauty products helped to send non-food sales up by 17 per cent in the 12 months to the end of February. Dixons and Boots are among those bemoaning the difficulties they face on the high street, and the Tesco numbers go some way to explaining why.

Stuart Rose, Marks & Spencer’s chief executive, said yesterday, in explanation of his sliding sales figures: “The trading environment remains difficult.” Tesco is delighting in making it so, expanding on its ranges of cheap T-shirts and discount denims to offer dirt-cheap copies of designer dresses. On closer inspection, the floaty blue item would never pass for the little Chloe number it so closely resembles at a distance, but that has not stopped it waltzing out of the stores, helping to send Tesco clothing sales up by 28 per cent.

“When will it stop?” wonder those who are uneasy that Tesco’s tightening grip on the high street is already collecting £13 in every £100 that we spend. As far as Sir Terry is concerned, the answer is “not while I can help it”. He added 1.5 million sq ft of selling space to his portfolio last year and has a pipeline of new stores coming through at a rate that leaves his rivals even further behind.

Sir Terry said that Tesco’s secret was that it could trade across income groups, geographic areas and formats. Right now, that means that Tesco operates 100 Extra hypermarkets, 446 superstores, 160 Metro stores, 546 Express stores and more than 500 other smaller shops that are not judged worthy of the Tesco name but still bring in the cash.

The shape of the business changed when, in 2002, the Office of Fair Trading allowed Sir Terry to add 1,200 T&S convenience stores to his business. Even he thought that the decision could go either way at a time when the rules stopped him buying a supermarket rival such as Safeway or Sainsbury. The OFT ruled that convenience stores were a different market from one-stop supermarkets, since when Tesco has been happily snapping them up.

There have been minor protests, such as that in a small area of London where three grocery stores which used to trade as rivals now come bedecked in Tesco colours; but the same people who bemoan the change tend to continue shopping in the stores. Sir Terry acknowledges that there are concerns about his spreading empire but points out that, at the ten former Safeway stores that he bought last year, sales have doubled.

“There are 70,000 more shoppers in those shops every week than there were when they were Safeway,” Sir Terry said. As far as he is concerned the customer is always right and, whatever the pundits say, customers are telling him, through the tills, that Tesco is delivering what they want. He acknowledges that there will be a limit to the number of stores he can operate in Britain, but he is confident that he is not there yet.

The competition authorities may be starting to feel differently. The OFT recently asked the Competition Commission to look at an ostensibly innocuous purchase by Somerfield of Safeway stores. Somerfield is not in the big league, in which Asda and Sainsbury are not much more than half the size of Tesco and the combination of Wm Morrison and Safeway is smaller still. The theory is that the OFT is offering the commission the chance to revisit the idea of whether there really are two different markets: convenience and supermarket.

Whatever the conclusion, Tesco is ready with plenty of other routes for its expansion. Since 1997 it has launched new businesses that now produce profits equal to what it was earning then. It has a financial services arm that boasts 4.9 million account holders. It has signed up more than a million customers for it new telecoms services. Overseas it is empire-building on a scale Britain has not seen in generations. From its first steps into Central Europe, Tesco has ventured into Thailand, Japan and China. The pace of growth abroad is well ahead of the UK.

Worldwide, there are now ten million more customer visits a week to Tesco stores. Sainsbury is by comparison a strictly British retailer trying to clamber its way back to health. That is a fact they must contemplate with some pleasure from the depths of Delamare Road, where even the art on the boardroom walls is made of recycled Tesco carrier bags.

Is Tesco’s dominance good for the consumer?

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