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Tesco and Marks and Spencer have emerged as two of the winners from the key Christmas trading period as their range of premium foods drove strong sales.
Like-for-like sales from both retailers beat analyst expectations, with Tesco pointing to demand for its Finest range and M&S saying quality upgrades had helped.
M&S said like-for-like food sales rose 9.9 per cent to £2.3bn in the 13 weeks to December 30, ahead of the 6.6 per cent expected. Tesco, meanwhile, reported that like-for-like sales in the UK were up 9.2 per cent in the four weeks to Christmas.
As a result, Tesco lifted its profit forecast for the year. The UK’s largest supermarket chain now expects adjusted operating profits of £2.75bn from its retail business, up from an earlier projection of £2.6bn-£2.7bn.
“Our continued investments across the full breadth of our customer offer have resulted in a stronger trading performance than anticipated,” Tesco said in a statement.
M&S also delivered a better than expected performance in clothing and home sales. Like-for-like sales increased 4.8 per cent to £1.2bn, above expectations of 2.8 per cent. The group’s overall sales increased 7.2 per cent to £3.8bn.
Chief executive Stuart Machin said M&S had entered 2024 “with a spring in our step” but stressed there was more to do to revive its fortunes and continue to win market share from rivals.
Shares in M&S, which more than doubled last year, slipped 3 per cent in early trading on Thursday. Tesco shares were up 1 per cent.
The strong performance from Tesco and M&S come a day after rival J Sainsbury disappointed investors with weak general merchandise sales.
