Clothing and homeware fell 2.8 percent, food also dropped by 0.4 percent despite being seen as the most successful sector.
The supermarket posted like-for-like sales growth of 2.3 per cent across the third quarter and 1.9 per cent in the six-week period to 6 January at its United Kingdom stores. The fall in the second quarter was 0.1%.
Worldwide revenue stood out as the worst performer, reporting GBP309 million, a 9.8% drop on a year-on-year basis, as a result of the planned closure of owned stores in loss making markets.
However in Asia, sales were down nearly 10pc in the three month period, which the company said reflected the ongoing impact of ceasing unprofitable bulk selling activities in Thailand.
The supermarket group said that over the 19 weeks to January 6, it had experienced the highest rate of market share growth in Ireland for five years with like-for-like sales increasing by 3.5%. "As a result, we carried more stock into the December sale".
"In our food business, ongoing trading pressures continued in the lead up to Christmas as consumer spending and choices reflected tighter budgets", he added.
Tesco shares fell around 4 per cent today morning despite the supermarket announcing record sales over Christmas period.
It highlighted just how dependent fashion retailers can be on the weather, with milder autumns and winters tending to dampen demand for higher-price items such as warm coats and knitwear.
In the Republic of Ireland sales were up 4pc during the Christmas period, while sales were up 3.3pc overall in Ireland in the three months to 31 December.
M&S also did not take part in Black Friday, which helped buoy John Lewis results.
Marks & Spencer reported better than expected sales of both clothing and food in the key Christmas quarter and said it was maintaining financial guidance for its full 2017-18 year.
"Everyone seems to have abandoned their Simply Food stores for other supermarkets, removing the one real positive in the numbers over the last few years".