Asda supermarket chain owner Wal-Mart Stores Inc has revealed December sales were below analysts' forecasts and has slashed the company’s annual profit targets.

The world's largest retailer had been one of the few success stories in retail as shoppers cut back on spending and focused on necessities.

The US firm's shares dropped nine per cent on Wall Street after the trading update. December like-for-like sales rose 1.2 per cent for the company overall.

Conversely, UK chain Asda hailed one of its best-ever Christmas trading performances as it said sales beat expectations during the festive period.

Asda gave no exact trading figures but said it enjoyed record sales for a single day on December 23.

Analysts surveyed by Thomson Reuters had expected a 2.8 per cent December sales increase for Wal-Mart.

Total sales for the five weeks ended January 1 edged down 0.1 per cent to $46.51 billion (£30.58bn) from $46.57 billion last year. International sales fell 10 per cent as they were impacted by the rising strength of the dollar.

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