Tesco enjoyed strong sales in non-food items

It was helped by healthy demand for non-food items, such as clothing, and entertainment items like CDs and DVDs.

The sales increase follows positive seasonal trading news from rivals Sainsbury's, Asda, and Morrisons.

Tesco also said it will raise �810m through a placing of new shares to give it more "flexibility and firepower".

The placing will be of up to 315 million new ordinary shares

In the seven week period to January, UK sales were up 15.4%, as non-food sales went "from strength to strength".

Record trading

On Monday, the UK's third biggest grocer Sainsbury's said its performance over the key Christmas trading period had been "encouraging".

Last week, rival supermarket chain Morrisons posted record like-for-like sales over the Christmas period - up 10.2%.

Wal-Mart-owned Asda reported similar record trading, with 18 million transactions in the week before Christmas.

Tesco is now estimated to have a UK market share of around 27%.

Last year Tesco had expressed an interest in bidding for Safeway, which was eventually snapped up by Bradford-based grocer Morrisons, but was barred from doing so on competition grounds.

Over the past three or four years Tesco has reached a position where it can compete with Carrefour and Wal-Mart on a world-wide scale and raising more capital with a share issue will increase its potential for growth.

Global player

Robert Clark, research director with Retail Knowledge Bank, told BBC World Business Report that Tesco is operating hypermarkets abroad, rather than the smaller stores found in the UK.

"Tesco is importing back into the UK a lot of what it is learning by operating hypermarkets internationally, and that tends to be one of the benchmarks of a global-scale retailer," he said.

"Tesco and competitors like Carrefour are arguably better global retailers than Wal-Mart," he said, citing the American company's unproven record as an international player.