Tesco said sales at stores open more than a year dropped were down in the six weeks to January from the equivalent period last year earlier, as it continued to suffer from tough trading conditions in the UK and abroad.
"Sales across all stores dropped 1.6% in the reporting period," the company said in a trading statement. Tesco added that it expected annual trading profit to be lower than the 2012/13.
Chief executive Philip Clarke noted that further weakness in the grocery market as a whole continued to impact on Tesco's performance in its main market, Britain.
"Our overseas performance has improved since the third quarter, driven by an improving trend in Europe. This is despite continuing external challenges, including the recent political disruption in Thailand," he added.
The results come a day after the second-biggest supermarket group in Britain, Sainsbury's, announced mixed quarterly sales as a tough autumn gave way to a record Christmas period, highlighting shoppers' tightening of budgets amid austerity.
While British economic growth is on the rise, government cutbacks continue to bite, forcing many Britons to tighten their belts.
Finance minister George Osborne warned that the country had to find an extra £25bn in cuts after next year's general election.
Tesco said: "Reflecting our continued investment for customers in challenging conditions for the UK market as a whole, we now expect to report full year results within the range of current market expectations of between £3.1bn and £3.4bn.
Britain's largest supermarkets are faced with increasing competition from discount rivals Aldi and Lidl.
Source: AFP via I-Net Bridge
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