Value retailer M&Co generated like-for-like growth over the eight weeks to Christmas Eve of 2.7% despite being “significantly” impacted by snow.

The retailer, one of the country’s biggest privately owned fashion groups, said that its online arm traded up 176% during the period.

M&Co reported: “With significant price increases combined with increased unemployment and minimal salary increases outside of London, 2011 will be very interesting.”

In a radio interview this week majority shareholder Iain McGeogh said that a “tidal wave of inflation” was poised to break over the clothing sector as increasing cotton prices and freight costs pile on pressure.

M&Co said that international franchise plans are on the 300-store retailer’s agenda for 2011/12 but it declined to comment on target markets.

The retailer first warned of price increases challenging value retailers in August, despite posting that operating profits doubled to £15m in the year to February 26 on sales up 11.8% to £182m.

The performance was a turnaround from the previous year after an improvement to its trend-led product and marketing campaigns, with womenswear and kidswear performing strongly.