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Tesco and Marks & Spencer have both posted strong Christmas grocery growth ahead of the wider market.

M&S posted the strongest festive grocery growth among the full assortment supermarkets, with food sales up 10.5% in the 13 weeks to 30 December to £2.33bn, representing like-for-like growth of 9.9%.

Tesco’s UK and Ireland sales growth for the 19 weeks to 6 January was 6.9%, though growth slowed marginally from 7.3% in the 13 weeks to 25 November to 6.4% in the 6 weeks to 6 January.

Tesco UK sales were up 7.5% in the 19 weeks (7.9% in its third quarter and 6.8% in the 6 week festive period), while its 19-week sales in ROI were up 7.3% and Booker 4%.

Total retail sales were up 6.4% in the 19 weeks as central Europe fell back 0.3% in the period.

Tesco said this “stronger trading performance than anticipated” meant it was upgrading its full-year guidance, with retail adjusted operating profit now expected to by £2.75bn, above its previous guidance range of £2.6bn to £2.7bn.

Tesco said it saw strong market share performance over Christmas, which was up 15bps to 27.9% in the four weeks to Christmas thanks to 9.2% in the four-week period.

It saw consistent volume growth across the period, particularly in fresh food supported by market-leading availability, and is now consistently the cheapest full-line grocer for over 14 months, and continuing to inflate less than all key competitors.

Tesco pointed to price cuts on nearly 2,700 products with savings of around 10%.

Meanwhile total Finest sales were up 16.7% including a record Christmas sales week; continued net switching gains from premium retailers, now for 17 consecutive periods.

CEO Ken Murphy said: “The Tesco team has worked harder than ever to help customers celebrate this Christmas, with our strongest ever range of great value, fantastic quality food. I want to say a huge thank you to all of our colleagues for their relentless dedication and energy. We stepped up our investment in service over the key festive period, with more colleagues on the shop floor, helping to deliver market-leading availability and making this our best Christmas yet.

“As part of our focus on value, we offered a full Christmas dinner for just £2.09 per person, helping to drive record sales in the weeks leading up to Christmas and further market share gains.

“Our powerful combination of great value, quality, availability and service means that we head into the new year in great shape to keep delivering for customers.”

At Marks & Spencer, its double-digit grocery growth led the market on volume growth every month with a 7% increase across the quarter and serving more customers than ever before.

Core categories grew strongly and renewal stores, which cater to larger basket shops, performed particularly well.

Categories such as meat, poultry, produce, grocery and in-store bakery delivered strong growth, supported by our programme of innovation and quality upgrades. Additionally, its ‘Remarksable’ value sales grew 18% as it continued to invest in value.

Total UK sales up 8.5% to £3.57bn as clothing & home grew slightly slower at 4.8% in the period.

International sales fell 6.4% in the quarter, dragging overall group growth down to 7.2% at £3.86bn.

M&S said it entered 2024 with a “spring in our step, but clear eyed on the near-term challenges”.

The group stated: “We are determined to deliver our objective of driving 1% growth in market share in both businesses and to up the pace of our transformation: keeping a relentless focus on trusted value; accelerating our store rotation and renewal plans; doubling down on our supply chain programmes to improve availability and lower costs; and resetting our data, digital and technology strategy to unlock benefits in future years.”

For its next financial year, the group warned of uncertain economic growth, consumer and geopolitical risks and additional cost increases from higher than anticipated wage and business rates related cost inflation.

Nevertheless, it said the strong Christmas trading performance provided confidence that the results for the year would be consistent with market expectations.

Tesco shares have opened up 0.7% at 298.5p following the update, while M&S is down 5.1% to 263.6p.

Morning update

Hilton Food Group, the meat packing supplier to Tesco, had a “strong” key festive trading period, with 3% volume growth in December.

Posting a full-year trading update, the group said this solid Christmas performance meant full-year results were expected to be in line with expectations, with continued revenue growth and operational progress.

Its UK and Ireland business overall has continued to make progress, with a particularly strong festive trading period and overall revenue increases compared with the prior year.

The group’s UK Seafood has performed ahead of its own turnaround targets with the business generating operating profits throughout the second half of the year and for the full year in total.

In Europe, revenue is ahead of the previous year, benefiting from continued growth in its Foppen business and following the start of production of a range of convenience products at its Swedish food park in September 2023.

Meanwhile its business in APAC has continued to deliver strong volume and revenue growth in the period.

Hilton said its board was confident in the outlook for 2024, underpinned by positive recent trading and the group’s strong financial position and cash flows with reduced leverage and comfortable headroom.

It stated: “The strength of Hilton Food’s highly automated supply chain and leading technology, combined with our outstanding multi-category food products provides us with a strong platform for sustained growth.”

It also said it continued to explore opportunities in existing and new markets as it seeks to become the “international protein partner of choice”.

CEO Steve Murrells said: “We finished the year with positive festive trading, and full-year performance in-line with expectations. Our Christmas period was supported by the strength of our high-quality and relevant products.

“Over the year, we have developed our technology and supply chain capabilities, and underpinned by our Sustainable Protein Plan, we have continued to support our customers, providing them with relevant, high-quality proteins that consumers want on their plate.

“We were delighted to announce a long term supply agreement with Walmart Canada in September and looking ahead, we remain confident that Hilton’s inherent strengths leaves the group well-placed to grow further with new and existing customers as we remain focused on becoming the international protein partner of choice.”

Listed skincare group Cellular Goods will change its name to Cel AI as it seeks to become the premier AI recommendation agent for personalised skincare and beauty routines.

The board believes that the Cel AI name aligns with and better reflects the company’s intention to “build an active and engaged community of strategic brand ambassadors and beauty experts who offer scalable beauty advice and product recommendations that go well beyond the current Cel AI CBD offerings”.

It will also change its CBX stock ticker to CLAI to reflect the change in name.

Michael Edwards, executive director of Cel AI, said: “The change of name announced today further solidifies our strategic shift in our operations to efficiency in all aspects of the business, including streamlining all operations and focusing on enterprise value increasing through an active and engaged community built on cutting-edge AI technology.

“The high-end beauty buying experience is ripe for disruption and it is very clear that our prospects and customers want us to provide them with a full suite of product recommendations and beauty ideas. We firmly believe that artificial intelligence can play a major role in scaling this recommendation engine.”

On the markets this morning, the FTSE 100 is up 0.5% at 7,686.5pts.

Risers include Just Eat Takeaway.com, up 2.6% to 1,230p, Greencore, up 1.7% to 99.3p and Hilton Food Group, up 1.6% to 768.4p.

As well as M&S, fallers include McBride, down 3.6% to 86.8p, Virgin Wines, down 2.6% to 37p and Naked Wines, down 1.1% to 56.5p.

Yesterday in the City

The FTSE 100 fell back 0.4% to 7,651.8pts to continue its bumpy ride so far in 2024.

Sainsbury’s may have posted a record Christmas with sales growth of 8.6%, but the City was left cold by its disinclination to raise profit guidance on the strong numbers.

Its shares had risen in the run-up to its Christmas trading update yesterday on strong grocery market share figures, but weaker non-food performance, such as Argos, clothing and general merchandise, saw its shares fall 6.3% yesterday to close at 286.5p.

Other fallers included Just Eat Takeaway.com, down 3.4% to 1,199p, Fever-Tree, down 3.2% to 988p, Ocado Group, down 3.1% to 685.8p, Marks & Spencer, down 3% to 277.7p, Domino’s Pizza Group, down 2.8% to 368p and Science in Sport, down 2% to 14.5p.

The day’s risers included Naked Wines, up 6.7% to 57.1p, Greggs, up 5.2% to 2,602p, Bakkavor, up 1.2% to 84p, Premier Foods, up 1% to 136.4p, Pets at Home, up 1% to 311.6p and Nichols, up 0.9% to 1,140p.

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