Leading budget clothing chain retailer Matalan said deep discounting helped sales grow 9.2 per cent over the Christmas period on a like-for-like basis compared to the previous year.

The firm, which specialises in outlets on retail parks, added that for the first 19 weeks of the second half, underlying growth reached 6.9 per cent compared to forecasts of six per cent.

Matalan lost its chief executive last year and only a few months ago warned it would miss full year sales and margin targets despite recording a big increase in profits.