Matalan like-for-likes soared 9.9% in the five weeks to December 31.
The retailer said the jump was down to its product offering, the response to its Christmas TV ad campaign and weak comparisons caused by snow last year.
The value fashion and homewares group achieved its best sales week to date over the period, beating its previous record set in 2005. Matalan said due to the challenging market conditions it decided to adopt a targeted promotional strategy offering customers promotions on selected lines.
For the 13 weeks to November 26, Matalan’s like-for-liked edged up 1.3%. Total sales rose 3.5% to £310.8m and EBITDA from continuing operations was £41.7m.
Matalan said that maintaining a strong price message had a positive impact on footfall and conversion. Its online business continued to deliver “strong growth”.
On December 31 cash levels were £114.0m compared with £102.5m the year before.
The retailer warned that the outlook for the UK consumer confidence remains uncertain with increasing pressure on disposable income and declining confidence levels.
Matalan added that higher cotton prices in the latter part of 2010 and early part of 2011 were now hitting margins and due to its buying cycle the recent fall in cotton prices will not be reflected in its margins until the second half of next year.
Chief executive Darren Blackhurst said: “It is clear that Matalan is well positioned in this increasingly competitive market to offer customers the higher quality, lower cost value proposition they seek.
“Style, quality and value are key to the Matalan offer and our customers recognise that.
“During these challenging times, it is encouraging to see us deliver our best ever week’s sales in the run up to Christmas and I would like to thank all of our employees for their efforts in delivering this great result.
“We remain focused and cautious and recognise the need to maintain healthy cash levels and tight control of costs as we look after customers and exceed their expectations going forward.”