Tesco shares have dropped 10 per cent after the retailer said it was "disappointed" by its seasonal trading in the UK. Like-for-like sales, which exclude the effects of new store openings, fell 2.3 per cent, excluding fuel and VAT.

Tesco warned that it expected "minimal" profit growth for the current year as it increases investment, especially in the UK. Total group sales for the seven weeks to 7 January rose 5.2 per cent including petrol and four per cent excluding petrol.

The supermarket warned that its profits for the year would be "around the low end of the current consensus range". Tesco's latest sales figures were released on a day when a whole host of UK retailers also announced how they had fared over the crucial Christmas trading period.

Home Retail Group, which owns Argos and Homebase, reported a fall in sales. Chocolate maker Thorntons said like-for-like sales at its own stores were down 4.2 per cent in the 14 weeks to 7 January.

Like-for-like sales at Halfords fell 4.8 per cent in the 13 weeks to 30 December, as motorists cut their spending on car maintenance and improvement. Mothercare reported a three per cent drop in like-for-like sales for the 13 weeks to 7 January.

However sportswear retailer JD Sports saw like-for-like sales, excluding VAT, rise by 0.1 per cent in the five weeks to 7 January. When VAT is included, sales were up 1.6 per cent. And online grocer Ocado said customer orders in the four weeks to Christmas jumped 21.9 per cent from the previous year. The news pushed its share price up by 14 per cent.

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