Festive sales cheer for Tesco as M&S reports another slump

Supermarket giant Tesco said UK Christmas sales rose by 1.9 per cent and were driven by a strong grocery performance

TWO of the UK's biggest retailers have reported contrasting fortunes over the busy Christmas period.

Tesco recorded a steep rise in sales over the critical festive trading period, but Marks & Spencer experienced another

fall in sales in its clothing arm and disappointing trading in its food halls.

Supermarket giant Tesco said UK like-for-like seasonal sales rose by 1.9 per cent, driven by a strong grocery performance. This helped Tesco notch up a 2.3 per cent rise in third quarter comparable sales.

Tesco saw its biggest ever sales week in the UK over Christmas, with 58 million customer transactions and 770,000 online grocery deliveries in one week.

Food sales grew 3.4 per cent on a like-for-like basis over Christmas, and the only blot was a drag from general merchandise and lost tobacco sales, which the firm blamed on the collapse of wholesaler Palmer & Harvey.

Tesco chief executive Dave Lewis said the latest figures show the company's turnaround is firmly on track.

“We have continued to outperform the market throughout this period, particularly in fresh food, thanks to our most competitive offer for many years. Our trading momentum accelerated across the third quarter and into December, with the four weeks leading up to Christmas Day delivering record sales and volumes in the UK.”

Tesco's update is the latest from the so-called Big Four supermarkets, which also includes Sainsbury's, Asda and Morrisons. Morrisons reported strong figures on Tuesday, while Sainsbury's posted a mixed set of results on Wednesday.

German chain Lidl claimed this week that it was the “fastest growing supermarket” over Christmas after booking record festive sales. The retailer said sales rose 16 per cent in December as it experienced its highest ever footfall.

Marks & Spencer blamed a tough October for a 2.8 per cent fall in like-for-like clothing and home sales over the 13 weeks to December 30, while it said “ongoing under-performance” in its food arm saw sales fall 0.4 per cent.

M&S said a pick up in trading over the key Christmas weeks helped make up for a weak clothing market and more difficult trading in its food business, with consumer spending under pressure amid a squeeze on budgets from inflation.

Steve Rowe, chief executive, said: “M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing under-performance in our food like-for-like sales.”

He added that the group remains on track to meet full-year profit expectations.

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