LONDON (AP) — Britain's Tesco PLC will overtake France's Carrefour SA to become the world's second-largest retailer by turnover behind US-based Wal-Mart Stores Inc. by 2012, according to an industry report released yesterday.

The report by international food and grocery expert IGD forecasts Tesco to grow at an average of 11 percent between 2007 and 2012, compared with 7 percent growth for Carrefour.

IGD said that international expansion in markets such as China, the United States and India will contribute to Tesco's annual turnover reaching $157.1 billion by 2012, just pipping Carrefour with turnover of $157 billion by the same date.

Jonathan Gunz, a senior business analyst at IGD, said emerging markets will not be immune to the global economic slowdown, but the pace of growth will continue to outstrip that of the developed world.

"We estimate that in grocery, retail markets in China and India will each grow at a compound annual rate of 13.2 percent between 2008 and 2012, exceeding any other country in the top ten," he said. "Other emerging markets to watch include Indonesia, Ukraine and Vietnam."

Tesco revealed last week that its international business, particularly in Asia, remains strong as it reported that worldwide sales rose 11.7 percent in the third quarter, compared to the same period a year ago.

In the trading update, the company added that it remains on track to open several new stores in its international division this year, which will provide around eight million square feet of new selling space.

The IGD report also showed that Wal-Mart will remain the clear front-runner in the global retail industry, with annual turnover expected to rise by around $100 billion to $476.2 billion in 2012.