Tesco bucks trend as sales leap 12%

The supermarket giant Tesco left its rivals trailing today after reporting a strong jump in sales figures for the Christmas period.

The supermarket giant Tesco left its rivals trailing today after reporting a strong jump in sales figures for the Christmas period.

The group, which is on course to break the £2 billion profits barrier in this financial year, said total sales in the UK grew by 12.1 per cent with the like-for-like figure up by 7.6 per cent when excluding petrol sales. The rate of underlying growth is in line with the trend reported by Tesco for the autumn period.

The performance for the seven weeks to January 8 compares with a like-for-like Christmas sales fall of 0.4 per cent for Sainsbury's and a 0.1 per cent rise for Safeway owner Morrisons.

Tesco said the strong performance, which included a 13 per cent rise in group sales, had kept it on course to meet the £2 billion profits target forecast by analysts for its financial year to the end of February.

Around £1 in every £8 spent by UK shoppers goes into its tills and has left the company with an estimated 29 per cent share of the food retail market.

In today's figures, Tesco said it had seen deflation of 1.6 per cent over the holiday period after it continued to invest in price cuts. A further £80 million of cuts were announced on December 31.

There was also significant growth in petrol volumes with the like-for-like sales figure when including forecourt trade ahead by 9.3 per cent.

The finance director Andrew Higginson said: "It was a good Christmas for us. The credit goes to our 240,000 staff who worked their socks off to make sure customers got a good service."

He said the retailer sold four million Christmas puddings, 250,000 PlayStation 2 games and 450,000 pairs of novelty socks during the period. It is thought non-food sales grew at twice the rate of food sales.

International sales were 16.1 per cent stronger over the festive season, despite tough trading conditions in some of its markets in central Europe. The company has operations in 12 countries, including Hungary, Poland, Taiwan and Japan.

As well as international expansion, Tesco is plotting further growth with plans to trial a new store selling only non-food products.

The retailer's growth into areas such as electrical products, CDs and clothes has been blamed for putting pressure on traditional chains such as Woolworths and WH Smith.