Tesco Sales Slow in Homeland

London Same-store sales at Tesco stores in the U.K. rose 3.5% in the retailer’s fiscal first quarter that ended May 24. Tesco had predicted a 4% increase in same-store sales growth for this fiscal year, and achieved the 4% in April.

Sales slowed most in non-food items, apparel and home furnishings, and reflected the growing trend that the U.K. consumer is faced with economic difficulties similar to the U.S. consumer. Both fuel and food costs are rising sharply throughout the United Kingdom.

Total sales at Tesco’s U.K. stores grew 9.4% in the first quarter, while total sales for locations outside the U.K. increased 26.6%, driven by a strong performance in Europe. Tesco said it is on track to deliver more than 9.8 million sq. ft. of new selling space in its international division, although warned that this will be weighted more than usual toward the second half of the year.

Tesco's newly launched Fresh & Easy chain in California is performing well, said Lucy Neville-Rolfe, Tesco's corporate and legal affairs director, in a report by guardian.co.uk.

"Our plans are on track,” Neville-Rolfe said. “Customer feedback has been fantastic."