Tesco shares plunge despite Christmas sales growth

High Street crash

GETTY DARK DAY For M&S and HoF the Christmas results have been one to forget

The supermarket posted like-for-like sales growth of 2.3 per cent across the third quarter and 1.9 per cent in the six-week period to 6 January at its United Kingdom stores.

A profit upgrade from Next and contrasting earnings alert from Debenhams last week set the scene for a mixed performance and the latest clutch of sales reports show it was by no means a jolly Christmas for all. Gains in the FTSE 100, however, remain capped, with retailers weighing on the index following disappointing results by Tesco (LON:TSCO) and Marks & Spencer (LON:MKS).

Indeed, this was Tesco's "biggest ever sales week in the United Kingdom, driven by fresh food market outperformance of almost 4%".

Sales rose by 15% to record highs in December as it welcomed more shoppers through the door than ever before, with the final Friday before Christmas proving to be its "strongest ever" day of trading.

Shares were down 22.8p to 301.2p, as the retailer's woes were compounded by a 0.4 per cent sales drop at its food arm.

Our revenue grew both in-store and online over the weeks leading up to Christmas, however, the impact of an unseasonal October resulted in an overall revenue decline.

Tesco's shares fell by 3.5 percent this morning despite the company stating that it had "outperformed" over the Christmas period.

Market research this week had identified Tesco as a festive victor, but the group said lower sales of general merchandise and the collapse of a tobacco supplier cast a shadow over a record week of trading before Dec (Shanghai: 600875.SS - news). 25. The hard discounter claimed to be the UK's fastest growing supermarket during the four weeks to 31 December 2017. In the United Kingdom total sales were up 1.1% to £2.858bn, but on a like-for-like basis - in stores open a year or more where comparable figures can be taken - United Kingdom sales were down 1.4%.

Marks & Spencer shares tumbled 22.8p, or 7.04pc to 301.2p.

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

The performance of the fresh food category had been helped by a strong seasonal offer, said Tesco, including its "Festive 5" vegetable deal.

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