Tesco named the Christmas winner as UK grocery inflation returns - Kantar

(Adds table, Kantar comment)

LONDON, Jan 10 (Reuters) - Britain's biggest supermarket

chain Tesco (Frankfurt: 852647 - news) recorded the fastest growing sales of the

country's four largest players in the Christmas quarter, as

inflation returned to the grocery market after more than two

years of falling prices.

Market researcher Kantar Worldpanel said Tesco sales grew

1.3 percent during the 12 weeks to Jan. 1, outperforming no.2

chain Sainsbury (Amsterdam: SJ6.AS - news) 's, whose sales fell 0.1 percent, Asda

, down 2.4 percent, and Morrisons, up 1.2

percent.

Kantar's data also showed that inflation returned to the

market with underlying grocery prices rising 0.2 percentage

points during the period, the first increase in prices since

2014.

Britain's overall inflation rate has begun to rise following

the slump in the value of the pound caused by the Brexit vote

last June, and it is expected to hit around 3 percent this year.

"The long-anticipated return to inflation suggests that the

speed of growth in the overall market will continue to hasten in

2017, and both consumers and retailers will be looking at ways

to avoid increasing the cost of the weekly shop," Fraser

McKevitt, head of retail and consumer insight at Kantar said.

Total (LSE: 524773.L - news) supermarket sales in the period grew by 1.8 percent to

27.8 billion pounds, the fastest growth rate since June 2014,

helped by bumper festive spending as consumers made the most of

Christmas Eve falling on a Saturday (Shenzhen: 002291.SZ - news) .

The industry data was published after Morrisons, Britain's

No. 4 supermarket group, earlier on Tuesday raised its profit

guidance following its strongest underlying Christmas sales for

seven years, confirming its recovery under new management.

Market share and sales (percent)

12 wks to 12 wks to pct change

Jan. 1, 2017 Jan 3, 2016 in sales

Tesco 28.2 28.3 1.3

Sainsbury's 16.7 17.0 -0.1

Asda 15.5 16.2 -2.4

Morrisons 10.9 11.0 1.2

Co-operative 6.0 6.0 2.4

Aldi 6.0 5.5 11.8

Waitrose 5.3 5.2 3.0

Lidl 4.4 4.2 7.5

Iceland 2.3 2.1 9.6

(Reporting by Sarah Young; editing by Kate Holton)