Sharp sales slowdown expected from Tesco

Supermarket giant Tesco is expected to unveil a sharp sales slowdown today as wet weather and belt-tightening consumers take their toll on the company’s results.

Tesco surprised the market in June with slower-than-expected first quarter growth from its core domestic business, as the group faced up to trading comparisons with last summer’s World Cup and stronger competition.

After the rain-hit summer and another interest rate hike in July, Panmure Gordon analyst Philip Dorgan said the retailer could unveil like-for-like sales growth excluding petrol of just 3.3% for the six months to the end of August - well down on the 4.7% seen in the first three months of the year.

But despite the slower sales performance, recent trading is expected to be much improved as comparisons ease and the retailer – which already has nearly 32% of the UK grocery market – takes a more aggressive stance.