Mutually held British retailer The Co-operative Group reported an increase in underlying Christmas sales at its food shops as price cuts attracted more shoppers.

Britain’s leading mutual retailer said that comparable sales jumped 5 per cent during three weeks ended January 2.

Sales of Fairtrade wines jumped 36 per cent, while sales of confectionary climbed 26 per cent. Sales of fresh and frozen turkeys advanced 21 per cent.

For the period of 12 weeks ended January 2, group’s underling food sales jumped 4.8 per cent.

Speaking on the issue, group’s CEO Peter Marks said, “These results represent another strong trading performance from our food business in an increasingly competitive market and a difficult economic climate.”

However, The Co-operative Group, which acquired rival grocer Somerfield last year for £1.6 billion, joined other retailers in warning of tough 2010.

The Co-operative expects the tough market conditions to continue until the end of 2010.