Tesco has sought to turn the screw on its rivals with a fund-raising drive aimed at boosting its "firepower and flexibility".
At the same time as unveiling bumper Christmas sales, Tesco said it would place new shares on the London market worth around £800 million (€1.1 billion).
It wants the cash injection to help it snatch more of the non-food market, providing extra space for sales of clothing and health and beauty products.
That area of business proved to be among the strongest performing over the Christmas period as home entertainment sales at Tesco grew by 29.4 per cent.
Analysts believe Tesco and rival Asda's stocking of cut-price DVDs and CDs is among the reasons behind the recent profits warning at WH Smith. The non-food performance helped like-for-like sales in the UK increase by 7.5 per cent in the seven weeks to January 3rd. Including new stores, the figure rose 15.4 per cent.
Tesco said the figures for the UK were better than hoped and had built on the 6.6 per cent like-for-like sales gain seen in the 14 weeks to November 15th.
As well as non-food growth, the company pledged to use the funding to take its Express convenience store format - currently covering 200 sites - to more parts of the UK.
The group will also be in a better position to acquire a number of stores set to be sold as part of the Morrisons takeover of Safeway. Regulators have told Tesco that it can pick up as many as 23 outlets.