Strong sales growth at its Asda supermarkets in the UK and other overseas operations helped to boost quarterly profits at Wal-Mart, the world's biggest retailer, which predicted flat sales in its domestic US market in the critical Christmas shopping period.

Asda, the UK’s second biggest supermarket chain, reported that same store sales rose 5.6 per cent for the three months to 30 September, compared with the same period last year.

Asda attributed part of its success to the growing importance of spending Saturday nights in with all the family. More than nine million of its customers tune into X-factor on television each weekend, which has led to an increase in the popularity of takeaway foods from its in-store counters.

It has also seen strong growth after targeted in-store events that have driven sales, such as a two-week baby promotion, which led to a surge in sales of baby car seats.

But while market share rose from 16.9 to 17.3 per cent and sales volumes were higher than last year, the figures represent a slowdown from the 7.2 per cent growth seen in the second quarter.

Judith McKenna, Asda’s chief financial officer, said that this was entirely down to the effect of lower food price inflation during the quarter.

At the same time, Wal-Mart, Asda’s parent company, reported net profits of $3.23 billion (£1.9 billion) or 84 cents a share, for the three months to 31 October. This compares with $3.14 billion, or 80 cents a share, for the same period last year.

Total sales grew to $98.6 billion, an increase of 1.1 per cent on the third quarter last year. Revenues were hit hard by foreign exchange movements. Excluding the effects of these, net sales for the third quarter would have been up 3.8 per cent at $101.284 billion.

Same store sales, excluding fuel, at Wal-Mart, and the company’s Sam’s Club discount warehouse chain were down 0.4 per cent.

Mike Duke, Wal-Mart's president and chief executive, said that while the trading environment continued to be challenging and customers have yet to benefit from signs that the US economy is growing again, customer traffic was up throughout the company.

“We gained market share, especially in the United States, the United Kingdom and Mexico," he said.

The company said that it expected US comparable-store sales during the 13 weeks from October 13 to be flat. To help counter this, it has embarked on a campaign to be the leader in low prices ion the run-up to the holidays, repeatedly sparring with rivals from Amazon.com to Target Corp in slashing prices for everything from toys to books and DVDs.

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