Tesco Christmas sales lower than expected

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Supermarket giant Tesco revealed a worse-than-expected 3.1 per cent rise in Christmas trading today.

The UK's biggest grocer said the growth in like-for-like sales excluding petrol during the six weeks to January 5 was "solid" - but it was below the 4 per cent widely expected by City analysts.

The key trading measure, which strips out the impact of changes in store space, was lower than the 4.1 per cent growth for the retailer's last quarter covering the three months to the end of November.

Tesco's total sales in the UK grew by 8 per cent in the six week period.

The retailer said non-food sales performed well with good market share growth across most categories, including clothing, entertainment and books.

Tesco's online arms, tesco.com and Tesco Direct, saw sales increase by 24 per cent to more than £190 million. More than two million orders were delivered in the six weeks, the firm said, with sales of MP3 players, digital cameras and laptops particularly strong.

The trading update comes a week after till roll figures from research firm TNS suggested that Tesco's share of the UK's £32 billion grocery market remained largely unchanged during the run-up to Christmas compared to a year ago.

TNS said the share was 31.5 per cent during the 12 weeks to December 30 last year, up from 31.4 per cent on the year.

Rival Morrison appeared to enjoy the best performance of the big retailers over the festive period, according to TNS, increasing its share from 11 per cent to 11.4 per cent or £2.4 billion. One analyst said the data suggested Tesco could have lost some sales to Morrisons.

Group sales at Tesco increased by 12.8 per cent during the six weeks to January 5, its statement said today.

Overall international sales grew by 26.9 per cent in the period, with strong growth in both Europe and Asia.

In Central Europe there was sales growth of almost 30 per cent - with Turkey growing by more than 80 per cent and Malaysia by more than 60 per cent.

Tesco said the response to its Fresh & Easy supermarket chain in the US had also been "very encouraging", with 28 stores now trading in Southern California, Las Vegas and Phoenix.

The retailer said: "The Tesco group has delivered a strong performance and record sales over the Christmas and New Year period, driven by rapid expansion internationally and solid growth in the UK."