Tesco share price soars after it reports sales up 1.3% over Christmas period

Tesco’s efforts to lower prices to compete with discounters had resulted in “strong” Christmas sales

Tesco is by far the UK's biggest grocer

Tesco's share price soared on Thursday morning after it reported a sales increase of 1.3 per cent over the Christmas period, beating analysts expectations that sales would fall 1.3 per cent.

Tesco was the top performer on the FTSEurofirst, opening up 6.5 per cent.

Results from the six weeks ending January 9 showed that Tesco’s efforts to lower prices to compete with discounters had resulted in “strong” Christmas sales.

Tesco is by far the UK's biggest grocer but had been wrong-footed by the success of discounters Aldi and Lidl.

It responded by slashing prices and adding 4,000 "Here to Help" staff. Sales in the 19 weeks to January 9 grew for the first time in four years.

“There is plenty more to do, but we are making progress and are trading in line with profit expectations for the full year," said Dave Lewis, chief executive of Tesco since 2014.

Lewis has spearheaded Tesco's turnaround plan following disastrous end of year results for 2014/15, when it recorded a pre-tax loss of £6.4 billion, the worst in its history.

Tesco also reported results for the third quarter ending November 28. It said sales were down 1.5 per cent on the same period the previous year due to what it called "unsustainable couponing", where it stopped offering the £5 off £40 national coupon campaigns from the previous year.

Tesco's results follow Morrisons and Sainsbury's, where sales were up 0.2 per cent and down 0.4 per cent respectively.