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Tesco Christmas results below expectations'

Published:  23 July, 2008

The supermarket giant has missed revenue forecasts for the Christmas period with like-for-like sales rising by just 3.1%

Like-for-like sales in the UK, excluding petrol, were up 3.1%, in the six weeks to January 5, a deterioration from the 4.1% increase reported for the third quarter and lower than consensus forecasts that estimated trading at between 3.8 to 4.5 %.

Tesco's performance undershot that of rival J Sainsbury, which last week reported a 3.7% rise in third-quarter like-for-likes, excluding petrol, over the previous 12 weeks, and will fuel concerns that the supermarket has lost market share to William Morrison, which issues its trading update next Tuesday.

However, Tesco's international operations continued to prosper, helping group sales up 12.8%, a pick-up from 11.8% in the third quarter.

Overseas sales rose by 26.9%, with some of the chain's newer territories making "exceptionally good progress".

Turkey was the best performer, up more than 80%, followed by Malaysia, at more than 60 %.Central Europe, its most mature international operation, saw total sales growth of almost 30%.

Tesco described the early response to Fresh & Easy, its start-up US business which opened in November, as "very encouraging". It now has 28 stores trading in southern California, Las Vegas and Phoenix.

Total sales at the retailer two online businesses, and Tesco Direct, were up 24% to over 190 million.