Associated British Foods said group revenue in the 16 weeks to January 5 was 10% ahead of last year.

This was driven by a higher-than-expected 25% increase in sales at clothing retailer Primark, which trades as Penney's here.

New store openings at Primark also helped sales, as "like-for-like growth benefited from comparison with weak sales during the unseasonably warm autumn of 2011 and good trading over the Christmas period," AB Foods said.

Primark has benefited as recession-hit consumers worried about jobs and facing squeezed household budgets hunt for bargains.

Other British retailers are suffering. The latest hit are entertainment retailers HMV and Blockbuster, and camera retailer Jessops.

AB Foods revenues were hit by the strengthening of sterling against all of the group's main foreign currencies except the Australian dollar. Without the impact group revenues would have been up 13% and Primark revenues up 27%, it said.

The company said it now expected further progress in overall adjusted operating profit for the full year, with the improvement heavily weighted towards the first half.

Revenues at its highly profitable sugar business were 12% ahead of last year in the 16 weeks to January 5, on higher sales volumes and marginally higher sugar prices, AB Foods said.

However, in the UK, poor growing conditions in 2012 led to a lower beet yield and sugar content meaning factory throughput would be lower, it said. It estimated this year's production would be lower - 1.13 million tonnes compared with last year's 1.32 million tonnes - while lower production, higher beet cost and a weaker euro would make for a lower profit.

In Spain, the company estimated it would achieve its sugar production quota but said it would make a lower profit because of a higher beet cost and because this year's sales included a higher proportion of lower-margin, refined cane sugar.