Tesco's Christmas tarnished by poor sales of DVDs and games
* UK like-for-like sales in six weeks to Christmas up 1.9 pct
* Analysts were expecting 2.4-3.2 pct
* Says outperformed in food, especially fresh food
* But sales of general merchandise fell
* Shares fall 4 pct (Adds CEO comments, shares)
By Paul Sandle
LONDON, Jan 11 (Reuters) - Britain's biggest retailer Tesco missed forecasts for Christmas trading as strong food sales were undermined by weak demand for general goods such as DVDs and computer games.
Market research this week had identified Tesco as a festive winner, but the supermarket group said a fall in general merchandise sales and the collapse of a key tobacco supplier cast a shadow over a record week of trading before Dec. 25.
The company, which has a 28 percent share of the British grocery market, reported a 1.9 percent rise in like-for-like revenue in the six weeks to Jan. 6. However, analysts had expected a rise of between 2.4 and 3.2 percent.
Rivals Sainsbury's, Britain's second largest supermarket group, and fourth-ranked Morrisons, both beat forecasts for Christmas trading.
Shares in Tesco fell 4 percent at the open, and were trading down 3.5 percent at 0915 GMT, the second worse performer after Marks & Spencer, which reported a fall in like-for-like Christmas sales on Thursday.
Tesco Chief Executive Dave Lewis said food, and particularly fresh food, were driving growth across all the company's stores and online, with the company selling over 600,000 turkeys and half a million kilos of fresh salmon.
"In the Christmas week itself (...) we sold more food than ever before at Tesco as we made our offer the most competitive it's been for many, many years," he told reporters.
Tesco, which Lewis has overhauled following a 2014 accounting scandal, said it remained confident in its outlook for the full year and was firmly on track to deliver its medium-term ambitions.
Food sales grew by 3.4 percent, and fresh food specifically by 3.7 percent in the six weeks before Christmas, he said, but weaker sales in general merchandise were a 0.6 percent drag and the disruption in tobacco supplies took a 0.5 percent toll.
Lewis said the collapse of the Palmer & Harvey tobacco supplier had taken "the shine off an otherwise outstanding performance for the period as a whole".
Broker Bernstein said Tesco's like-for-like food numbers were "very strong", but its Christmas could disappoint due to tobacco and general merchandise.
It said that excluding the Palmer & Harvey impact would give Tesco Christmas like-for-like sales of 2.4 percent, better than Morrisons' 2.1 percent and about 2.0 percent for Sainsbury's, excluding its Argos acquisition.
The group also reported data for the third quarter, with UK like-for-like sales up 2.3 percent, having increased 2.1 percent in the second quarter. (Editing by Keith Weir)
