Tesco emerges as Christmas winner as UK grocery inflation returns - Kantar

Markets Reuters

The signage of Tesco Extra is silhouetted against the sun in London, Britain, September 22, 2014. REUTERS/Luke MacGregor/File Photo (Copyright Reuters 2017)

Britain's biggest supermarket chain Tesco recorded the fastest growing sales of the country's four largest players in the Christmas quarter, as inflation returned to the grocery market after more than two years of falling prices.

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Market researcher Kantar Worldpanel said Tesco sales grew 1.3 percent during the 12 weeks to Jan. 1, outperforming no.2 chain Sainsbury's , whose sales fell 0.1 percent, Asda , down 2.4 percent, and Morrisons , up 1.2 percent.

Kantar's data also showed that inflation returned to the market with underlying grocery prices rising 0.2 percentage points during the period, the first increase in prices since 2014.

Britain's overall inflation rate has begun to rise following the slump in the value of the pound caused by the Brexit vote last June, and it is expected to hit around 3 percent this year.

The industry data was published after Morrisons, Britain's No. 4 supermarket group, earlier on Tuesday raised its profit guidance following its strongest underlying Christmas sales for seven years, confirming its recovery under new management.

(Reporting by Sarah Young; editing by Kate Holton)