Tesco Boss Dave Lewis
Tesco chief executive Dave Lewis is trying to cut costs.Bauke Schram/IBTimes UK

Tesco has surprised shareholders by reporting an increase in Christmas sales. In the six weeks to 9 January, the grocer managed to hike its UK sales by 1.3%, compared to an expected drop of 2.3%.

Group sales were up 2.1% at Tesco. The company focused on customer service and shopping experience, as part of its chief Dave Lewis's turnaround plan. The positive results in the Christmas period could not save the entire quarter, however. In the three months to 9 January, like-for-like sales dropped 0.5%, with analysts expecting a 1.5% drop.

"Our Christmas performance was strong, benefiting from lower prices on an outstanding range of products," Lewis said in a statement. "Our customer service improved materially and our colleagues went the extra mile. Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco."

Despite the dip in quarterly sales, Joshua Raymond, CFD and FX broker XTB.com said the supermarket reported a "fairly balanced set of results". Tesco managed to generate a 3.2% increase in international sales over the Christmas period and 2.7% growth over the whole quarter.

"The grocer saw sales fall 0.5% in the 19 week trading period to end the year," Raymond said. "That was somewhat better than expected though the market had low expectations for the UK supermarket chain."

"All in all, there is much to like in these results for now but Tesco must simply show continued improvement if shareholders are to regain the confidence its lost in the company over the last few years," he concluded.