Tesco has recorded its slowest Christmas sales growth in its core UK market since the early 1990s amid what the company described as “challenging” trading conditions.

According to the retail group’s Christmas and New Year trading statement, UK like-for-like sales during the seven weeks to 10 January 2009 excluding petrol increased by 2.5 per cent, marking the smallest sales rise during the period since 1993.

The retailer’s sales outside the UK fared considerably better, contributing to an 11.6 per cent increase in overall group sales, which Tesco said was being driven by continued rapid international expansion and steady growth in the UK.

However, Tesco said this growth came against the background of challenging trading conditions in all of its markets caused by the global economic slowdown.

Tesco said its total international sales grew by 32.7 per cent over the Christmas and New Year period, helped by favourable exchange rate movements in Europe, and a particularly strong performance in Asia.

In Europe, the retailer’s sales grew by 24 per cent, with growth at constant exchange rates slowing compared with its third quarter, which Tesco said reflected the economic conditions in parts of central Europe and Ireland.

Tesco’s sales in Asia increased by 43 per cent, with strong growth in Korea, China and Malaysia.

The group said that integration of its recently acquired Homever stores in Korea was going well, claiming that the introduction of Homeplus Tesco ranges and lower prices were proving popular with customers. It said sales at converted stores had increased by more than 50 per cent.

Tesco said its Fresh & Easy subsidiary in the US was “coping well with a severe downturn” in the west coast markets in which it trades, adding that like-for-like growth was “strongly double-digit” for the 28 stores which had been open more than a year.

Separately, Patrick Cescau has been appointed as a non-executive director to Tesco’s board, with effect from 1 February 2009. Mr Cescau previously held the position of group chief executive of Unilever.

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