Tesco sales fall for fourth quarter in a row

Tesco, the world's No. 3 retailer, posted a drop in underlying British sales for the fourth quarter in a row on Thursday, overshadowing a more solid performance in its overseas markets.

The firm, which takes about one in every 10 pounds spent in British shops, said sales at British stores open over a year, excluding fuel and VAT sales tax, was down 0.9 percent in the 13 weeks to November 26, Tesco's financial third quarter.

That compares with analyst forecasts in a range of down 1.0 percent to up 0.5 per cent and was unchanged from the drop of 0.9 per cent in the second quarter.

Tesco, which trails France's Carrefour and US leader Wal-Mart by annual sales, makes around two thirds of its sales and three quarters of its profit in Britain.

It said it was making good progress in the third quarter against the background of challenging conditions for consumers.

"We are performing broadly in line with market expectations for the group and the outlook for the year as a whole remains unchanged, ahead of the important seasonal trading period," it said.

The group has suffered in the economic downturn more than its main British supermarket rivals, in part because it sells more discretionary non-food goods where shoppers have been cutting back most.

Tesco hit back in September, cutting prices with a £500m investment.

Third quarter group sales including fuel rose 7.2 per cent. The international business excluding fuel and on a like-for-like basis was up 1.1 percent.