TESCO, the UK's biggest supermarket, today revealed a worse-than-expected drop in sales in the run-up to Christmas as it admitted its Big Price Drop had failed to pull in enough customers.

Tesco, which has 2,700 stores in the UK, said the 2.3% decline in like-for-like sales excluding VAT and petrol in the six weeks to January 7 was below its own expectations and “disappointing”.

The grocer, which triggered a price war with its £500 million price-cutting campaign at the end of September, said the number of customers drawn in by its latest promotion had not been enough to offset the lower prices.