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Last Updated: Tuesday, 17 January 2006, 11:37 GMT
Strong Christmas sales at Tesco
Shoppers at Tesco tills
Tesco is the UK's largest supermarket chain
Supermarket giant Tesco has reported strong sales growth over the Christmas and New Year period.

Like-for-like sales, which exclude the impact of new store openings, jumped 5.7% in the seven weeks to 7 January.

The supermarket giant said its premium Tesco Finest range sold particularly well, adding that it continued to benefit from non-food sales.

Its online arm also performed well, racking up a record one million orders in the four weeks before Christmas.

Total group sales, which include new stores, grew by 11.5% - buoyed by a 16.1% jump in international sales during the same period.

Tesco has delivered strong growth and record sales over the Christmas and New Year period
Tesco

In the UK, Tesco's performance outpaced competitors such as Wal-Mart-owned Asda and Sainsbury's.

On Thursday, the UK's number three supermarket, Sainsbury's, unveiled a 5.2% rise in like-for-like sales, while second-placed Asda said sales had been higher than the 2.8% same-store sales reported by fourth-placed Morrison's.

Market leader

Recent figures from market research group TNS showed the group had boosted its share of the UK grocery market by 1.5% to 30.5%. Asda was second, with a 16.7% market share, and Sainsbury's third with 16.2%.

"Tesco has delivered strong growth and record sales over the Christmas and New Year period," the supermarket said.

Finance director Andrew Higginson also told BBC Radio 4 he was "delighted" with the group's performance.

Tesco has become the King Kong of the High Street
Nick Goulding, Forum of Private Businesses

"The thing we are most delighted about is that we had such a fantastic Christmas last year - to have held onto the gains we made then and then push on again with 5.7% this time means we've had a very strong Christmas," he said.

Looking ahead, Tesco said it expected sales to grow between 3% and 4% over the coming year.

Mr Higginson added that while the group was predicting a rise in sales, it also expected consumers to remain cautious in the face of rising domestic bills and mortgages.

Customer battle

In an effort to lure in more customers, supermarkets have been slashing prices, with prices at Tesco 1.5% cheaper than at the same time last year.

However, the group has come under fire amid concerns about its relentless growth - Tesco currently operates 1,800 stores in the UK.

As Tesco unveiled its results, the Forum of Private Businesses (FPB) - which represents 25,000 small and medium-sized firms - called for action to limit the group's dominance of the UK grocery sector.

"Tesco has become the King Kong of the High Street. It is too powerful, too greedy and too dominant," said FPB chief executive Nick Goulding.

Fears about the increasing hold that supermarkets have over the UK grocery market have sparked an investigation into competition in the sector.


BBC NEWS: VIDEO AND AUDIO
Tesco finance director Andrew Higginson



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