Tesco has reported its slowest sales growth in almost 15 years, rising just 2% in the three months to November 22. The supermarket chain has attributed the slowdown to increased demand for its discounted lines.
The sales growth, which excludes petrol sales and new stores, was down compared to the previous quarter, when it grew by 4%. Similarly, sales grew by 4.8% in the same period last year.
The supermarket chain says the introduction of discount brands has knocked up to three percentage points off its UK sales figure, but adds that it has attracted 300,000 new customers a week.
Tesco adds that worldwide sales have grown by 11.7% despite the slowdown in the UK.
It says that it also sells more non-food items than other supermarkets, which the retailer admits has held back the growth of the company but says has a “strong appeal” among consumers.
Sir Terry Leahy, Tesco chief executive, says: “We are adjusting our business to meet the new challenge – focusing on becoming even cheaper for customers, keeping our costs low to help us to do this and managing our balance sheet and cash carefully.”