Supermarket giant Tesco reported signs of improving consumer confidence today as it geared up for the Christmas sales battle.
The firm's like-for-like sales, excluding petrol, grew by 2.8 per cent in the 13 weeks to November 28 - an improvement on the previous quarter's 2.7 per cent. Total sales were up by 8.8 per cent.
The UK's biggest grocer has been helped by its double Clubcard points promotion as well as "particularly strong growth" in toys and entertainment goods in the build-up to the festive season.
Chief executive Sir Terry Leahy said: "We are seeing improving customer confidence and encouraging trends in both the UK and our international businesses, although recessionary conditions still exist in a number of markets."
Tesco has slashed prices on its luxury Finest range and launched a television advertising campaign to tempt in more shoppers and take the battle to Waitrose and Marks & Spencer.
The company has also fought with its rivals to fill the gap in the toy market left by the demise of retailers such as Woolworths late last year, while its Tesco Direct website also put in a "strong performance".
The figures come after the supermarket saw its first market share growth in almost two years in the 12 weeks to November 1, according to the latest TNS Worldpanel figures.
Last year soaring food inflation dented the business as customers defected to discount rivals such as Aldi and Lidl.
But finance director Laurie McIlwee said: "We are seeing a steady but modest increase in consumer confidence and that is a good environment for Tesco to trade in."
International sales were up 5.4 per cent at constant currency rates as the group benefited from stores bought in Korea and openings across the region.
The group has almost 2,300 stores in the UK and more than 286,000 staff.