Tesco and Marks & Spencer have emerged as Christmas winners as shoppers flocked to their stores despite pressure on family finances.
Both posted bumper figures amid strong demand for premium range food and clothes.
Tesco said sales in the six weeks to January 6 were 6.8 per cent higher than a year earlier, while M&S reported an 8.1 per cent leap in the 13 weeks to December 30.
M&S chief executive Stuart Machin, who has overseen a remarkable turnaround in fortunes under chairman Archie Norman, said it was entering 2024 with a ‘spring in our step’.
Ken Murphy, his counterpart at Tesco, said the country’s largest grocer was ‘in great shape to keep delivering for customers’.
The updates placed Tesco and M&S firmly among the Christmas retail winners alongside Aldi, Lidl, Next and Sainsbury’s.
Others have struggled, however, with JD Sports last week reporting disappointing sales.
Chris Beckett, head of equity research at Quilter Cheviot, said this week’s updates paint ‘a good picture of the British consumer’.
But he warned the resilience has not been felt by every retailer.
He said: ‘Tesco and M&S have followed up Sainsbury’s relatively positive Christmas update with a bit of festive cheer.
‘They have delivered good results and are taking market share.
Christmas boost: Tesco said sales in the six weeks to January 6 were 6.8% higher than a year earlier
‘With Sainsbury’s claiming the same, the private equity-backed supermarkets, Asda and Morrisons, must still be suffering and not enjoying the same positivity.’
Tesco nudged its annual profit guidance higher to £2.75billion, up from a range of £2.6billion to £2.7billion.
Although its shares rose yesterday morning, they were dragged down later in the day as the grocer was among those to voice concerns about attacks in the Red Sea.
Murphy said if shipping continued to be diverted, freight costs would increase and this ‘could drive inflation on some items, but we just don’t know’.
But he had positive hopes for consumer spending power at home.
As inflation continues to ease, he said that he was ‘cautiously optimistic’ about the economic outlook, as long as strong employment levels hold up.
He said Brits opted for more expensive party food at Christmas as they wanted to celebrate after ‘tough year’ but it was ‘too early’ to say whether the cost of living crisis was over.
Sales of its premium own-label range, Tesco Finest, swelled by almost 17 per cent.
And it sold over 32m pigs in blankets and 6.6m bottles of prosecco, with December 22 being its busiest day for Christmas shoppers. Tesco shares closed down 1.4 per cent, or 4p, at 292.4p yesterday.
Such was the weight of expectation in the run-up to yesterday’s figures, that M&S shares also fell despite the positive update, dropping 5.2 per cent, or 14.4p, to 263.3p.
Once condemned for dowdy fashion ranges, the business saw a 4.8 per cent rise in clothing and home sales over the 13-week period, while its food sales were up 9.9 per cent.
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