Tesco has reported its “biggest ever Christmas” as the supermarket announced sales growth of 4.1% at its UK stores in the six weeks to 4 January.

Q3 sales, which covered the 13 weeks to 23 November, were also up by 3.8% in the UK.

As a result, Tesco announced that it had recorded its highest market share since 2016, driven by “further improvement in customer satisfaction”. The retailer reported a 78-basis point increase in market share, which was up to 28.5% of the grocery market, after it recorded 19 consecutive periods of share gains.

The supermarket’s food sales were up 4.7%, which it said was mainly driven by volume growth across the Q3 period with a particularly strong contribution from fresh food.

“We invested to bring the best value, quality and service to everyone, no matter how or where they shopped with us,” Tesco chief executive, Ken Murphy, said. “As a result, we delivered our biggest ever Christmas, with continued market share growth and switching gains.

“Our strong performance reflects the investments we have made, positioning Tesco as the UK's cheapest full-line grocer for over two years.

“As we start 2025, we look forward to continuing to offer our customers the very best products and experience at Tesco.”

Tesco also stated that it is set well for long-term growth and expects to deliver a retail adjusted operating profit for the 2024/25 financial year of around £2.9bn, a figure in line with its own guidance.

The group’s latest trading statement also revealed that it expects retail free cash flow to be within its medium-term guidance range of between £1.4bn and £1.8bn and adjusted operating profit contribution from the retained Tesco Bank business to be around £120m.

Head of Markets at interactive investor, Richard Hunter, added: “While Tesco continues to flex its muscles in a notoriously competitive environment, expectations also progressively increase, lessening the likelihood of positive shocks for investors.

“The share price reaction to the numbers could relate to a tinge of disappointment that guidance was not expanded following the festive success, even though the sales numbers were largely in line or ahead of expectations.

“Nonetheless, the momentum has been positive of late for Tesco, where the shares have risen by 22% over the last year, as compared to a gain of 7.4% for the wider FTSE 100.”

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