Tesco shrugs off subdued market as festive sales edge higher

Tesco said it outperformed a subdued market, delivering its fifth Christmas in a row of sales growth.

While UK like-for-like sales grew 0.1 per cent in the six weeks to January 4, it saw a 0.2 per cent fall in the 19 weeks covering both the third quarter and the festive period.

Chief executive Dave Lewis, who recently announced plans to step down in the summer, said: "In a subdued UK market we performed well, delivering our fifth consecutive Christmas of growth.

"In our centenary year, our customer proposition was compelling, our product offering very competitive and thanks to the outstanding contribution of our colleagues, our operational performance was the best of the last six years.

"As a result, this Christmas we had the biggest-ever day of UK food sales in our history."

Tom Stevenson, investment director at Fidelity Personal Investing’s share dealing service, said: “Tesco’s turnaround under Dave Lewis continues, but it can’t buck tough trading.

"Like-for-like sales in the Christmas period were just the right side of flat for the core British supermarkets and growth was only really achieved in the UK and Ireland thanks to the Booker wholesale business."

He said that growth at Tesco is returning to sustainable levels after the recovery of recent years so he doesn't expect more than hard-won, single-digit earnings growth in the future.

"In a mature market, of which the company already accounts for more than a quarter of sales, that’s as good as it will get," he added.