aWHILE not exactly bowing out on a high note, Lord Sainsbury will be leaving the supermarket chain when it appears to have found its feet again after its hiccup of the mid-1990s.

He has just witnessed the formal dethronement of Sainsbury as Britain's leading grocer to Tesco. The latter has been UK market leader since 1996 but Sainsbury's overall sales were still ahead when its US operation was taken into account.

Now even with this prop, Sainsbury has slipped to number two, while Tesco is well ahead in the UK.

However, lessons have been learned since Sainsbury allowed itself to become complacent and fall down on its product offering and marketing.

Most importantly, like-for-like sales are showing respectable growth, though still way behind Tesco, while margins have edged forward.

Sainsbury is improving the look of its stores and has firm plans for smaller convenience stores in city centres as well as home delivery.

There is nothing original in these ideas but the group is keeping up with current trends.

While it may have allowed Tesco to steal a march in loyalty cards, Sainsbury has done a good job with its bank, greatly helped of course by its partner Bank of Scotland. It should be in profit by the end of the year and looks like being the most successful of the new retail banks.

It should become a real moneyspinner in time.

However, the group's foray into the US is more problematical. Shaw's is strengthening its position in its market and is making progress in improving its performance. But one could not have a more competitive market than the US and the business does not have enough scale to do well.

Sainsbury will have to invest a lot more money to reach the necessary scale and it should have better uses for the capital.

Consolidation in the US supermarket sector should create a suitable exit.

Tesco's policy of growing in new markets like Eastern Europe and Asia looks a better bet for the long term.

At home, with or without its family chairman, Sainsbury is not going to catch up with Tesco now.