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.”