Tesco today emerged as a winner in the latest price war in the supermarket sector after reporting a 7.8% rise in like-for-like sales.

The UK's biggest grocery chain said its core food business in the UK had captured market share from rival retailers in the wake of the merger of Morrisons and Safeway earlier this year.

Sky-high petrol prices also boosted sales growth during the 12 weeks to May 22, which was faster than the previous quarter and ahead of market expectations of around 6%.

Tesco has invested more than £100 million in slashing prices to meet the challenge of rivals such as Morrisons and Asda which have unveiled special offers on a host of goods this year.

In a trading update today, Tesco noted there had also been price reductions in its non-food business.

Total sales in the UK were 11.1% ahead of a year ago, reflecting same-store growth and an expansion of selling space at existing outlets and new openings.

Chief executive Sir Terry Leahy said: "I am particularly pleased that our core UK food business has continued to grow market share and to perform very strongly in the first quarter."

Friday June 18, 2004