Shares in Tesco fell by over 2% this morning (10 June) as slowing UK sales took the shine off continuing international growth.
The UK’s largest retailer said like-for-like sales in the UK, excluding petrol, were up 3.5% for the 13 weeks to 24 May.
The announcement meant sales had slowed since Tesco’s last update in April, when it said sales were up “over 4%” for the opening five weeks of its first quarter.
Cautious consumer spending in the UK has weighed on Tesco’s non-food sales, which are growing at a slower rate than its grocery business.
Chief executive Sir Terry Leahy said Tesco had made “solid progress” in the UK but admitted there had been a “more cautious mood” on non-food spending.
“We’ve made a good start to the financial year thanks to the growing breadth of the group and the strength of the Tesco business model,” Sir Terry said. “This has been achieved despite the more uncertain economic environment.”
Despite a solid performance overseas – sales rose 13.9% on a constant-currency basis – shares in Tesco had fallen by 2.2% to 392.90p at 10:37 BST.