FASHION and homeware retailer Matalan revealed a surge in sales in the run-up to Christmas.

The company, which has a store at the Ringway Centre in Huddersfield and 190 outlets UK-wide, lifted like-for-like sales by 9.9% in the five weeks to December 31. That compares with a 1.3% increase for the 13 weeks to November 26.

The company said it delivered its best sales week to date during the period, beating its previous record in 2005.

Matalan recorded total revenues of £310.8m in the quarter, with underlying earnings of £41.7m.

However, the firm said the combined impact of the January, 2011, VAT rise, higher costs and promotional price cuts continued to put pressure on profit margins – adding that the outlook remained uncertain.