TESCO is set to emerge as one of the worst-performing supermarkets over the Christmas trading period after it revealed its poorest festive figures since the early 1990s.
The supermarket giant's 2.5 per cent rise in like-for-like sales was 2 per cent less than that of rival Sainsbury's.
And is likely to be well below an expected strong performance from Morrisons, which will release its figures next week.
Sainsbu
ry's reported Christmas sales growth almost double that of Tesco.
Morrisons is believed to be set for a 9 per cent rise in sales.
But Tesco, which takes about £1 in every £8 spent in UK shops, sought to be upbeat yesterday.
It said total sales increased by 11.6 per cent during the seven weeks to 10 January, driven by continued rapid international expansion and steady growth in the UK.
The supermarket hopes the extra custom driven by its discount ranges will offset the blow to sales, while non-food sales strengthened slightly on the third quarter, with market share gains across electrical goods, clothing and entertainment.
The firm added that its like-for-like sales were lower because of the VAT reduction, which came into force in early December – and added that growth on a comparable basis was 3.5 per cent.
That figure was also better than the 2 per cent growth reported for the 13 weeks to 22 November, and just above the 2.4 per cent predicted in the latest poll of Reuters analysts.
Tesco said yesterday it was operating in a "challenging" market.
And finance director Andrew Higginson admitted that the groups's UK Christmas trading figure was the weakest "probably since the last recession".
He said: "Against the overall background of, I suspect, rising unemployment and economic slowdown it will be a tough year."
But he added that Tesco's underlying sales growth was driven largely by volumes, rather than price increases as at many of its rivals.
He continued: "In a price sense we are very competitive in the market now … so we are happy with our position."
About 10,000 full-time and part-time jobs are set to be created by the company, through expansion in shops and its distribution and operations departments, as well as new store openings.
However, the firm told The Scotsman there were currently no plans for any new shops to be created north of the Border. The total group sales were given a major boost from a 32.7 per cent increase in international sales, bolstered by the weak pound and strong trading in Asia.
Online sales were also strong in the run-up to Christmas.
Total sales from tesco.com and Tesco Direct were up 18 per cent to £273 million over the seven weeks, with sales of digital and electronics products such as televisions and laptops "particularly pleasing".
