Tesco (LON:TSCO) reported a slowdown in sales growth in the first quarter in a trading update on Thursday.
The UK’s largest supermarket said that like-for-like sales increased 0.4% year-on-year in three month period until 25 May.
This marked a slowdown from 1.7% reported for the previous quarter.
Meanwhile, total sales slipped by 0.4%, impacted by the closure Tesco Direct last year.
Nevertheless, the supermarket said that this proved ahead of the UK market.
Chief Executive Dave Lewis, commented on the results: “We have had a strong start to the year, growing ahead of the UK market on both a volume and value basis. Our customer offer is more competitive than ever, with a wider choice of our ‘Exclusively at Tesco’ products now available in more stores, helping to drive more than 10% sales growth across the range.”
In recent years Tesco has faced intensified competition from rivals such as Lidl and Aldi, both of whom have continued to grow market share.
On Wednesday, Lidl announced plans to further expand into London, opening a further 40 stores.
The move could prove a blow to the various Tesco Express locations in the capital.
Last year, Tesco unveiled a new discount store, Jack’s, with the aim of taking on the growing popularity of Lidl and Aldi.
Shares in the supermarket are currently down -0.53% as of 12:24PM (GMT).