HMV today said that it was benefiting from the collapse of smaller high-street rivals as it revealed sales growth of more than 12 per cent over the summer.

Simon Fox, the chief executive, said that the group had gained share in both the DVD and music markets, where a string of businesses such as Fopp and MVC have gone to the wall.

A trading statement revealed sales across HMV’s stores in the UK and Ireland rose 9.6p per cent on a like-for-like basis in the 18 weeks to August 25, far ahead of City expectations.

Strong sales of the final Harry Potter book, Harry Potter and the Deathly Hallows, meant like-for-like growth at the group’s Waterstone's business rose 1.6 per cent.

Total sales across the group rose by 12.2 per cent.

Mr Fox, who outlined a three-year recovery plan in March, said that HMV had benefited from the poor summer weather, with DVD sales across the UK as a whole up 20 per cent on a year ago.

But he added: “The declining market for CDs, which is shrinking by about 10 per cent a year, is putting pressure on a number of players and we are benefiting from the consolidation.”

In the last two years, DVD and CD chains Silverscreen, MVC, Music Zone and Fopp have all gone bust. HMV is the only CD and DVD specialist left on the stock market.

Choices UK, the DVD rental chain that collapsed two weeks ago, blamed film piracy and stronger competition from rivals such as HMV, Virgin and the supermarkets, for its demise.

HMV bought the Fopp brand as well as six of its most profitable stores from administrators last month.

Under Mr Fox, HMV is looking to wring cost-savings out of the supply chain and run more high-profile DVD promotional campaigns in stores, focusing on blockbusters, back-catalogue and classic films.

Mr Fox said that he was happy with the progress the group had made over the summer but cautioned there was “more work to do” in the run-up to the key Christmas season.

He said: “I think we have surprised on the upside, which is a good way to operate. We are on track, perhaps a little bit ahead, but there is plenty to play for.”

Shares, which have surged 25 per cent in the past month, eased 1p to 129p.

Nick Bubb, analyst at Pali International, said: “The trading update is significantly better than expected.

“But the first 18 weeks of the year are only a third of annual sales and Christmas will of course be the key test.”

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