M&S clothing and home sales fall over Christmas quarter

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Tesco has emerged as a festive victor after reporting a steep rise in sales over the critical Christmas trading period.

LONDON, Jan 11 (Reuters) - Tesco (Frankfurt: 852647 - news) 's Christmas trading missed forecasts as strong food sales were offset by weak demand for items such as DVDs and computer games, showing that even Britain's biggest supermarket chain is feeling the strain as consumers curb their spending.

In the four weeks before Christmas Day Tesco enjoyed "record sales and volumes" and in the first week of December Tesco reported its biggest ever week of sales, outstripping the market by almost four per cent in fresh food.

Dave Lewis, Tesco's Chief Executive, commented: "We have continued to outperform the market throughout this period, particularly in fresh food, thanks to our most competitive offer for many years".

Food sales rose an impressive 3.4 per cent on a like-for-like basis over Christmas.

Tesco's update is the latest from the so called Big Four supermarkets, which also includes Sainsbury's, Asda and Morrisons.

The retailer hailed a "strong" third-quarter performance in the United Kingdom and Republic of Ireland, with United Kingdom like-for-like sales up 2.3% in the period and 1.9% over the Christmas trading season.

Similarly, Marks and Spencer Group lost 4.5 percent after reporting a 2.8 percent fall in like-for-like sales for its struggling clothing and home divisions over the Christmas quarter.

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But an unseasonably mild October had resulted in an overall revenue decline for the quarter, while online sales also suffered, with growth slowing to 3%, from 6% in the previous quarter.

Lidl claimed it was the "fastest growing supermarket" over Christmas after booking a 16% leap in festive sales in December, although it did not give a breakdown of like-for-like sales.

It said "ongoing under-performance" in its food arm saw sales fall 0.4%.

Like-for-like sales in the United Kingdom went up 2.3%, having increased 2.1% in the second quarter.

Like-for-like sales at Marks & Spencer (M&S) were underwhelming, dropping by 0.4%.

Over Christmas, sales of fresh food brands and the Tesco finest range were particularly strong.

The retailers blamed tough trading conditions, with Tesco speaking of "inflationary pressures" and M&S referring to "ongoing trading pressures".