Tesco shares fall after Q1 sales growth slows

Shares in Tesco fell on Thursday after the UK's largest supermarket group reported a slowdown in sales growth for its first quarter, missing analyst expectations. The company said the conflict in the Middle East was creating uncertainty for households but had not yet materially impacted shopping behavior.

For the 13 weeks ending May 30, Tesco's total group sales reached £16.8 billion, a 1% increase on a like-for-like basis. In its core UK and Republic of Ireland market, like-for-like sales grew by 1.8%, a figure that fell short of analyst forecasts and marked a deceleration from the previous quarter. The company attributed the slowdown partly to an exceptionally strong comparative period last year, which was boosted by favorable weather.

Chief Executive Ken Murphy said he was pleased with the company's progress, citing strong customer satisfaction and continued sales growth. He downplayed the significance of the quarterly slowdown, suggesting investors should not read too much into it. However, he acknowledged the broader economic context, stating the war in the Middle East has impacted consumer sentiment, though it has not yet led to higher food prices or changed consumption...