Tesco, Britain's biggest retailer, today defied the industry gloom, saying improvements in its own-brand ranges helped deliver its best Christmas in nearly a decade.
The supermarket group reported a 2.2% rise in same-store sales in its home market in the six weeks to January 5, beating UK rivals Sainsbury's and Morrisons.
Analysts had forecast a rise of 1-1.5%.
The increase contrasted with an industry survey showing UK retailers failed to increase Christmas sales for the first time since the depths of the financial crisis.
UK shoppers are worried about whether Britain will secure an orderly withdrawal from the European Union in less than three months' time.
"In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market," Tesco chief executive Dave Lewis said.
The company's closest UK competitors - Sainsbury's and Wal-mart's Asda - are merging, potentially overtaking Tesco as mainstream supermarkets strive to counter the threat from fast growing discounters Aldi and Lidl.
Lewis said customers had responded to better pricing and quality in Tesco's own-brand products, with 125,000 more shoppers in stores this Christmas than last helping it outperform the market in food, clothing and general merchandise.
December 23 was the busiest Sunday in Tesco's history, he added.
Lewis said Tesco's strong Christmas - with growth from its "Finest" premium products to new own-brand goods that vie with the discounters - was the result of the recovery plan he initiated after he joined in 2014.
He has lowered Tesco's prices versus all its major rivals, streamlined product ranges and improved quality, while raising store standards and transforming relationships with suppliers.
For the third quarter as a whole, Tesco recorded comparable UK sales growth of 0.7%, down from 2.5% in the previous three months - but the 12th consecutive period of positive figures nonetheless.
Over the 19 weeks to January 5, the supermarket saw like-for-like sales grow 1.2% in the UK.
Tesco said that like-for-like sales in its Irish operations were down 0.2% over the 19-week period, compared to a strong performance last year.
"In a more competitive market, driven by increased couponing activity, customers responded well to our Christmas offer with positive volumes across key fresh categories," the company added. Its Christmas Irish sales rose by 0.3%.
Analysts had forecast quarterly UK like-for-like sales growth of 0.5-1% following 2.5% in the second quarter.
For the 2018-19 year, analysts on average expect Tesco to make an operating profit before exceptional items of £2.08 billion, up from £1.64 billion in 2017-18.
The second biggest UK supermarket chain Sainsbury's missed forecasts with a 1.1% fall in third-quarter sales yesterday, while fourth-ranked Morrisons reported a 0.6% rise in Christmas sales on Tuesday.
However, industry data showed all of Britain's big four grocers, lost market share over Christmas to German-owned Aldi and Lidl.