Tesco has emerged as a festive winner after reporting a rise in sales over the crucial Christmas trading period.
The supermarket giant said UK like-for-like sales in the six weeks to January 7 rose by 0.7%.
Tesco also notched up a 1.8% rise in third quarter sales, marking a year of continuous growth as its recovery under boss Dave Lewis continues.
He said in a trading statement: “We are very encouraged by the sustained strong progress that we are making across the group. In the UK, we saw our eighth consecutive quarter of volume growth and delivered a third successful Christmas.
“Our fresh food ranges proved particularly popular, outperforming the market with great quality, innovative new products and even more affordable prices.
“We are well placed against the plans we shared in October to become more competitive for customers, simpler for colleagues, and an even better partner for our suppliers, whilst creating long-term value for our shareholders.”
Mr Lewis, who has been leading an overhaul since he took over from Philip Clarke in 2014, aims to slash costs by £1.5 billion over the next three years to help boost margins and return the group to bottom-line profit growth.
Tesco said it saw particularly good growth across its core Christmas grocery and fresh ranges, including a 24% increase in party food sales and an 18% rise in Free From sales.
The chief executive said the firm, which was embroiled in a furore over an inflation-linked rise in the price of Marmite last year, is working “shoulder to shoulder” with suppliers to help mitigate the impact of the collapse in the value of the pound.
He said: “Inflation pressure is there, but we will keep doing everything we can to minimise the impact.”
Mr Lewis added that Tesco has “seen no change in the pattern” of consumer spending behaviour.
The firm said: “We have worked hard throughout the period - in collaboration with our supplier partners - to minimise the impact on our customers of the inflationary pressures that have started to emerge in the market.
“As a result, while deflation has eased, the price of a typical basket remains nearly 7% cheaper than in September 2014. We will continue to do all that we can to ensure that we offer our customers the best possible prices.
Across the group, Tesco saw like-for-like sales grow 1.5% in the third quarter and 0.3% over Christmas.