Sales at U.S. chain stores picked up last week thanks to discounting and sales tax holidays in some states, Instinet Research said in its weekly Redbook report Tuesday.

Sales at major U.S. chain stores rose 2.6 percent in the week ended Aug. 2 compared with the same week a year ago after rising 2.2 percent the previous week, the report said.

Sales gained 0.9 percent compared with the previous month.

The report said the month turned out better than first expected and sales beat targets for the first time since November.

"Retailers claim competition to be even more intense than usual possibly due to the $400 per child tax credit checks heading to 25 million taxpayers," Redbook said.

The Redbook Average is compiled from a sample of general merchandise retailers representing about 9,000 stores. Same-store sales measure revenue at stores open at least a year.

The index is released weekly by Instinet Research, a division of Instinet, a Reuters-owned electronic brokerage.