In a trading statement, Tesco said that its sales in the 14 weeks ending 15 November 2003 increased by 17.5 per cent. No figures were given.
Total UK sales for the quarter were up 14.6 per cent, including 4.3 per cent from the recently acquired T&S convenience store business. Like-for-like sales were up 6.9 per cent, driven by strong volumes of 6.6 per cent.
Analysts had expected the company to report like-for-like sales growth of around 4 per cent for the quarter, a slight decline compared to the 6.3 per cent in the first half.
Non-food, an area of increasing importance for all the main food retailers in the UK, continued to perform well, with the group's clothing range in particular posting good results (sales up 34 per cent), growth of more than six times the market rate.
Tesco is by far the most international of the UK supermarket groups, and its foreign businesses continued to contribute to the overall performance in the third quarter. International sales were up 31 per cent, with all countries contributing to the gain despite some tough trading conditions.
The company said it planned to have 189 hypermarkets operating overseas by the year end, from Malaysia, Thailand, Taiwan and South Korea in Asia to Hungary, Poland, Slovakia and the Czech Republic in eastern Europe.
Tesco's statement comes in stark contrast to recent announcements from both Sainsbury and Safeway, respectively the third and fourth largest supermarket operators in the UK.
Last week Safeway announced like-for-like sales growth of just 0.1 per cent in the first six months of the year as it struggled to overcome the uncertainty surrounding its future - although its acquisition by Morrisons now seems a foregone conclusion - while Sainsbury continued to disappoint after many months of restructuring, managing just 1 per cent growth in the first quarter.
Tesco already has a 27 per cent share of the UK food retail market, and is likely to increase this further with the addition of several Safeway stores. Like Asda and Sainsbury, Tesco can only buy a handful of the stores which Morrisons must offload in order to finalise its Safeway takeover, and all three chains must sign undertakings pledging not to buy any more.