Iceland is still losing sales

The firm - which is set to be bought by a consortium led by Icelandic firm Baugur - said sales fell 3.5% in the 5 weeks to 31 December on a year ago.

It said a "disappointing" Christmas on the High Street had been made worse by continued pressure on prices and greater competition.

Like-for-like sales at Iceland stores were down 3.1% over the festive period.

Recovery hopes dashed

Big Food's Booker cash-and-carry unit also saw Christmas sales fall, dropping 4.6%.

For the 13 weeks to 31 December - the third quarter of Big Food Group's financial year - group sales were down 3.4%, with Iceland's sales falling 3.5% and Booker's sales 4.3% lower.

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"Following the seasonal difficulties experienced during the second quarter, the company had expected some recovery after the summer," the company said.

"However, a generally disappointing Christmas on the High Street compounded by a trading environment increasingly characterised by grocery price deflation and increased competition in the convenience sector, meant that this did not materialise," it added.

The company is not alone in reporting poor sales over the crucial Christmas trading period. On Friday, Marks & Spencer also announced it had seen sales slide, and earlier in the week disappointing sales updates had emerged from Woolworths, House of Fraser and Ottakar's.

Last month, Big Food Group agreed to be bought by a consortium led by Baugur following a �326m ($612m) takeover offer.