Tesco lifts Christmas sales

Tesco: Non-food sales were particularly strong

Tesco has reported a solid increase in sales over the important Christmas trading period.

The supermarket group said it had achieved a 10.5% increase in UK sales for the seven weeks to 6 January while like-for-like sales in the same period were up 6.9%.

"This performance reflects our determination to deliver the best offer for customers as we continue to cut prices," Tesco said in a statement.

Analysts said the group's position as the UK's leading grocer had also been buoyed by strong trading in non-food items and online shopping.

Court battle

The results were issued as lawyers for Tesco attended the European Court of Justice to defend the company's strategy of selling discounted branded goods, such as Levi jeans.

"We'll show the European Court how Levi and other brands are using archaic interpretations of the law to rip off British customers," Tesco director John Gildersleeve said.

"They try to stop us from buying products in cheaper markets [such as the US and Eastern Europe] and bringing them into the UK to sell at discounted prices.

"This keeps prices high because there's little competition and customers aren't offered a choice."

Online sales up 400%

Tesco said its strategy of offering excellent value in non-food had been "a resounding success" this Christmas.

"We saw record sales in all areas including 14,000 DVD [digital versatile disc] players and 8,000 widescreen televisions," it said.

Online sales over Christmas were up 400%.

To cope with this demand, Tesco's online operation had recruited 400 new staff while 30 million products had been delivered and coverage now extended to 90% of the UK population.

International sales up 50%

Total group sales for the seven-week period were 15.4% improved, helped by rapidly developing international stores, Tesco said.

Last year, Tesco added 32 stores internationally, increasing its international trading space by more than three million square feet or 45%.

International sales were up 50% over the Christmas and New Year period.

Last week, both Sainsbury's, the UK's number two supermarket chain, and Morrison's, the north of England operator, had reported solid Christmas trading gains.

Investors were cheered by Tesco's report. The shares were up eight pence or 3.1% at 265p by 1201 GMT.