UK retailer Tesco is set for a boom in growth that will see it overtake French group Carrefour as the world's second-largest retailer by 2012, behind only US behemoth Walmart in terms of annual turnover.

According to a report by international food and grocery expert IGD, Tesco will grow at a faster pace than its French counterpart, with a compound annual growth rate of 11 per cent and 7 per cent respectively expected for the two companies.

In the report, entitled 'Global Retailing: Preparing for Change', Tesco's annual turnover is forecast to reach US$157.1bn by 2012, boosted by international expansion in markets such as China, India and the US.

Carrefour is expected to achieve strong growth in Brazil and China, with Walmart set to increase turnover by around US$100bn throughout the period.

'The next few years are likely to be challenging for the leading global retailers, yet are all well-placed to achieve further growth, particularly internationally,' said Joanne Denney-Finch, chief executive at IGD. 'Scale alone will not determine who will win in today's global trading environment – global retailers must also show increased simplicity, greater efficiency, flexibility and strong brand positioning to succeed.'

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