Sales of fresh food and its own F&F clothing brand have helped Tesco to record its highest rate of market share growth in five years in Ireland as it continues to regain lost ground with shoppers.
The gains made during the 19 weeks to January 5 cover the important Christmas trading period. The retailer's UK like-for-like sales were 1.9pc higher.
But that was below the 2.8pc increase that had been expected by analysts, and sent Tesco's shares tumbling by more than 4pc.
Tesco, which is Ireland's second biggest grocery retailer in terms of the value of sales, said its like-for-like sales in Ireland climbed 3.5pc during the 19-week period.
"Our fresh food ranges performed particularly well as did F&F Clothing which saw double digit growth," said Tesco Ireland CEO Andrew Yaxley.
He said that more customers did their Christmas shopping with Tesco than in the previous year, while the retailer's customer satisfaction scores in Ireland also improved.
Mr Yaxley said he's "very encouraged" by Tesco's latest performance and that a continued focus on improving its offer for customers resulted in "increased volumes, transactions and basket size".
Tesco's like-for-like sales in Ireland slipped by 0.1pc in its financial year to the end of last February, when it posted revenues of €2.48bn here, excluding VAT and including fuel.
According to the latest figures from research group Kantar Worldpanel, Tesco had a 22.3pc share of Ireland's grocery market during the 12weeks to December 3.
That placed it second, just behind Dunnes Stores, with a 22.5pc share.
The top three retailers are neck-and-neck in terms of market share, with Musgrave-controlled SuperValu having a 22.2pc share.
Tesco, whose CEO is Dave Lewis, is the latest UK retailer to reveal its Christmas trading performance, which has been a mixed bag of results.
Tesco rival Morrisons this week beat Christmas trading expectations, but Marks & Spencer saw clothing sales fall in the run up to the festive period. Its food sales also fell on a like-for-like basis.
But Tesco said it had its biggest-ever sales week in the UK over the festive period, notching up 58 million customer transactions and 770,000 online grocery deliveries in the week before Christmas. Its party food offerings helped to lift sales.
Its shares still tumbled more than 4pc as its trading in the quarter was hit by the collapse of wholesaler Palmer & Harvey which disrupted Tesco's tobacco supply lines.
Mr Lewis said Tesco is "confident" in terms of its outlook for the full year.