US grocer Kmart said like-for-like sales over November and December fell 13.5% as it reduced inventory and cut back on promotional activity.

Total sales for the first two months of the fourth quarter declined 26% to $5.1bn from $6.9bn last time in a year when the group closed 316 stores in the first quarter of 2003.

But Kmart boss Julian Day was upbeat and said that by having a “more thoughtful approach…we have improved the profitability of our market basket”.

He added: “By continuing to offer our customers attractive values in a way that allows Kmart to generate profitable sales, we should be able to continue to invest in our business to serve customers better in the future.”