Tesco endured its worst UK sales performance for more than a decade but its shares rose the most in 20 years after evidence that heavy discounting was starting to attract customers.
Shares in the country’s biggest retailer have been hit hard as market share data showed customers switching to cheaper rivals.
However, they rose 37.4p, or almost 13%, to 325.4p yesterday after Tesco announced third-quarter like-for-like sales growth of 2% in the UK, excluding petrol.
Although the growth was the lowest since the recession of the early 1990s, it still beat analysts’ forecasts and Tesco said it improved at the end of the quarter.
Andy Higginson, finance director, predicted a 'very tough year' in 2009 but argued that a focus on discount brands, which depressed sales growth by value, was necessary.