Xmas sales bonanza at Tesco spells tough future

Britain’s favourite grocer has posted another set of impressive trading figures, this time for the Christmas period.

Tesco told analysts that group sales had risen 11.5% in the seven weeks to 7 January this year.

Like-for-like sales growth in the UK hit 5.7%, not including petrol, while prices across the store were cut by an average of 1.5%.

Despite the impressive figures, the supermarkets share price lost more than 10p on the announcement, or around 3%, before recovering some ground.

Some analysts said the supermarket had posted more impressive growth at Christmas 2004, and pointed to Sainsbury’s revival as a sign that competition in the grocery sector was hotting up.

Sainsbury’s reported 5.2% sales growth, Morrisons 2.8% growth with Asda, still the UK’s number two retailer, somewhere in between.

Nick Goulding, chief executive of the Forum of Private Business, said: “Tesco has become the King Kong of the high street. It is too powerful, too greedy and too dominant.”