UK Supermarket chain Tesco has reported a 3.7% fall in UK like-for-like sales after being hurt by price cuts and subdued consumer spending.

Tesco chief executive Philip Clarke said that sales had been hit by the supermarket's own price cuts, in response to competition from the discounters. He warned investors not to count on sales improvements in the next few quarters and said he had "never seen sales fall like this before".

Philip Clarke said: “As expected, the acceleration of our plans is impacting our near-term sales performance. The first quarter has also seen a continuation of the challenging consumer trends in the UK, reflecting still subdued levels of spending in addition to the more structural changes taking place across the retail industry. We are determined to lead in this period of change, building long-term customer loyalty and positioning the business to win in the multichannel era.”