Tesco reported a 1.9% rise in UK like-for-like sales over Christmas with a strong performance in groceries though it had a tougher time outside its food aisles.
Britain’s biggest supermarket said food sales were up 3.4% in the six-week period to 6 January but that the performance of general merchandise dragged on the overall performance – though clothing was up.
Tesco also took a significant hit from lost tobacco sales after the collapse of wholesaler Palmer & Harvey in November put an extra strain on its distribution network.
Shares opened 4% lower.
Chief executive Dave Lewis said the business had again worked with suppliers to try and limit the impact of higher costs on shoppers.
Alongside the Christmas update, Tesco reported a 2.3% rise in sales for the third quarter, just before the festive period, meaning that for the combined 19 weeks it was up by 2.1%.
The figures were published at the same time as a slew of retailers’ trading updates, with rival supermarket Waitrose seeing like-for-like sales up by 1.5% over the six weeks to 30 December.
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Waitrose, owned by the John Lewis Partnership, hailed the impact of “innovative” products such as chocolate and ginger mince pies and one-day only cut-price offers, but said the “highly competitive” market saw its profit margins come under pressure.