Like-for-like sales at Sainsbury's grew 3.7 per cent over the last three months, excluding petrol, the resurgent supermarket said today.
The figures come as a surprise to forecasters, but are a much-needed boost for a retail sector dampened by fellow shopping giant Marks & Spencer's (M&S) announcement yesterday that its third-quarter sales were down 2.2 per cent.
Following today's statement, Sainsbury's share price increased by almost four per cent to 379p in early trading.
Such a rise is a rare fillip for an industry which saw shares dip by about ten per cent overall and M&S lose a fifth of its market value on the stock exchange yesterday.
"This is a good result for the Christmas quarter, and is particularly pleasing given the level of competition during this period," said chief executive Justin King.
"We have now completed 12 consecutive quarters of like-for-like sales growth delivering strong three-year growth ahead of our expectations."
Online sales at Sainsbury's increased by 40 per cent a trend experienced by many other retailers as customers looked to the internet in 2007.
"Over the quarter we continued our investment in the customer offer to ensure our price position remains competitive for customers while continuing to provide the additional quality Sainsbury's products have to offer," said, Mr King.
"We also delivered a number of market-leading promotions in the weeks leading up to Christmas."
Mr King also said that the company has made year-on-year improvements in other seasonal holidays, such as Halloween and bonfire night.
Sainsbury's delivered 90,000 orders and serviced more than 21.5 million customers in the seven days before Christmas, he added.
Its non-food business experienced "significant sales growth," said Mr King, fulfilling expectations, while its premium 'Taste the difference' and basic value products recorded the highest growth.
Mr King said: "We have now successfully achieved our goal of £2.5 billion of additional sales since March 2005. This significant milestone in our recovery was surpassed early in quarter four, three months ahead of plan.
"The improvements we have made to our business during our recovery means we are well-equipped to perform in this challenging environment and we remain confident in our ability to deliver our growth plans."
The company said total sales for the 12 weeks to December 29th 2007 rose 4.7 per cent, when not taking fuel purchases into account.