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| Tesco reports sharp fall in sales | Tesco reports sharp fall in sales |
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| Tesco has reported a third consecutive quarter of falling sales as the UK's largest supermarket chain faces increasing competition from rivals. | |
| For the three months to 24 May, the supermarket said like-for-like UK sales including VAT and excluding petrol fell by 3.7%. | |
| Chief executive Philip Clarke said trading would remain challenging "throughout the coming quarters". | Chief executive Philip Clarke said trading would remain challenging "throughout the coming quarters". |
| Tesco reported a 6% fall in annual profits in April. | Tesco reported a 6% fall in annual profits in April. |
| Tesco has faced intense competition from discount rivals including Aldi and Lidl as well as from more upmarket retailers such as Waitrose. | |
| Industry figures continue to show the UK's largest supermarket suffering a decline in its share of the grocery market. | |
| On Tuesday, data from grocery market analysts Kantar Worldpanel showed Tesco's market share declined to 29% in the three months to 25 May from 30.5% a year earlier, while sales fell 3.1%. | |
| Tesco, along with Asda, Morrisons and Sainsbury's, has responded to the threat from discount grocers by lowering prices on essential items including bread, milk and eggs. Tesco said sales volumes of these essentials had risen 28% in the quarter. | |
| It has also launched a programme of store revamps, which will see 650 stores across the UK upgraded in the next year. | |
| Mr Clarke said: "Our accelerated plans are making a real difference for customers and we are more competitive than we have been for many years." | |
| But he warned that sales were set to continue to suffer. | |
| Mr Clarke added: "We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers. | |
| "We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole." |