LONDON (Reuters) - Tesco (L:TSCO), Britain's biggest retailer, ground out a 0.1% rise in underlying sales in its home market during what it said was a "subdued" Christmas for consumer spending.
Showing how hard supermarkets had to work over the festive period, Tesco said it had cut prices, delivered the best operational performance in six years and seen the biggest ever day of UK food sales in its history, just to secure a small rise in organic growth.
British shoppers turned particularly cautious in 2019 as wage growth slowed and political uncertainty gripped the country. Tesco said a resounding election victory for Boris Johnson in December, which broke the deadlock, had not released any pent up demand.
Industry data showed supermarkets, which also includes Sainsbury's (L:SBRY), Walmart (N:WMT) owned Asda and Morrisons (L:MRW), recorded the lowest sales growth over the Christmas trading period for five years.
"In a subdued UK market we performed well, delivering our fifth consecutive Christmas of growth," Chief Executive Dave Lewis said.
Tesco, which has a 27.4% share of Britain's grocery market, also updated on trading in the third quarter period before Christmas, when life-for-like sales fell by 0.4%. That showed shoppers had returned to its stores for Christmas.
The retailer said it had enjoyed a strong performance with fresh food and seen a very positive reaction to its new loyalty scheme, Clubcard Plus, which entitles shoppers to discounts in return for a 7.99 pounds monthly subscription.
The solid performance sets Tesco up for the year ahead, when boss Lewis will step down after he revitalised the group and saved it from near collapse in 2014. He will be replaced by Ken Murphy, a former executive at healthcare group Walgreens Boots Alliance (NASDAQ:WBA).
As part of the company's ongoing turnaround, it said in December it had received interest in its businesses in Thailand and Malaysia. It said on Thursday that no decision had been taken about these assets.