Supermarket giant Tesco reported an improving trend in UK sales today but warned that high fuel costs continue to divert customer spending from the tills.
The UK's largest supermarket posted a 0.1% drop in same-store sales excluding fuel and VAT in the 13 weeks to May 28, up from a 0.7% fall in the previous quarter. Total UK sales including fuel and VAT were up 7%.
Food sales performed well, with meat, fish and poultry recording good UK growth, but this was overshadowed by declines and weak demand in non-food areas, Tesco said.
The company's fast-growing Asian business continued to offset weak domestic demand, posting 3.2% like-for-like sales growth, driven by a strong show in Thailand. Total group sales including fuel were up 7.8%.