Tesco hails best Christmas for three years

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The Independent Online

Tesco hailed its strongest Christmas performance in three years today as recession-weary customers bought festive treats and its bumper voucher handout paid off.

The supermarket said like-for-like sales in the six weeks to January 9 grew 4.9 per cent, excluding petrol and adjusted for the change in VAT.

It said its Finest range was a "real winner", growing 16 per cent, while 35 per cent more bottles of Champagne were sold than last year.

Tesco handed out around £100 million in extra loyalty vouchers before Christmas and the firm said around £40 million worth of those were redeemed.





Tesco's performance was at the top end of analysts' expectations for the Christmas period and reflects a strong trading period across the industry.

Rival Sainsbury's, which has already reported its figures, saw like-for-like sales growth of 4.2 per cent in the quarter to January 2, excluding VAT and fuel.

Tesco finance director Laurie McIlwee said the additional vouchers boosted its like-for-like sales figures by about 0.5 percentage points and ensured customers shopped with the supermarket.

He said the supermarket was slowly reducing its promotional activity, but said there was still a discount-driven environment.

Consumers had wanted to put aside the worries of the previous year and treat themselves over the festive break.

"There is an element of people being fed up of continuous bad news - they wanted to enjoy Christmas," he said.

Clothing, electrical goods and toys were among the non-food items to have performed strongly over the festive period.

Mr McIlwee praised staff for keeping stores open in spite of the snowy weather and said the transport problems had seen customers turn to online purchasing.

Internet sales grew nearly 20 per cent in the six weeks, with rises in both food and other items.

Tesco was cautious but confident over the future, expecting growth patterns to continue as inflation remains low.

But Mr McIlwee said there were still some worries for consumers in the future.

"Unemployment is still high and we have still got all of the concerns around how all the Government debt is going to be paid off," he said.

Tesco said total UK sales, excluding fuel, outperformed the industry as a whole, increasing by 8 per cent compared with the same period last year.

Group sales were up 7.5 per cent at constant exchange rates and the supermarket said progress in its international business had been good.

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