Tesco has reported rising first quarter sales as the supermarket said it was reaping the rewards of offering customers lower prices in the face of rising inflation.

East Anglian Daily Times: Dave Lewis, chief executive of TescoDave Lewis, chief executive of Tesco (Image: Archant)

UK like-for-like sales in the first quarter of the year rose 2.3%, driven by a 2.7% comparable sales growth in food.

The figures represent the sixth consecutive quarter of positive sales momentum and come after boss Dave Lewis hailed the grocery giant’s first full year of sales growth in seven years in May.

Mr Lewis said: “In tough market conditions, we have stayed true to our commitment to helping customers, working closely with our supplier partners to keep prices low.

“Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food.”

Tesco said sales were boosted by its fresh food offering, which saw “significant market outperformance”.

The group said it is working with suppliers to protect customers from inflationary pressures and pledged shoppers will see further price reductions, focused on fresh food and healthy products.

It comes after official figures earlier this week showed inflation surged to 2.9% in May, which was higher than expected.

Mr Lewis added: “This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the Group.

“We are confident in our plans to create long-term, sustainable value for our key stakeholders and to deliver on the ambitions we have set out.”

Like-for-like sales across the group rose 1%, although Tesco was held back by a 3% fall in comparable sales at its international division.

In the UK, fresh food volumes grew by 1.6% in the quarter after the grocer reduced prices on a range of fruit and vegetables and more than 200 other healthy products.

Later today Tesco will hold its annual general meeting, with Mr Lewis’s generous relocation package set to come under scrutiny.

The chief executive, dubbed “Drastic Dave”, was handed a £142,000 benefits package to help him relocate from London to near the supermarket’s Hertfordshire head office.

But shareholder lobby group Pensions and Investment Research Consultants has advised investors to oppose the award at the AGM after deeming it inappropriate.

Mr Lewis insisted it was the “same policy for me that we use for any other store manager”.

Tesco is also likely to face questions over its proposed £3.7 billion merger with food wholesaler Booker, a deal that is subject to a Competition and Markets Authority (CMA) investigation.

The CMA is assessing whether the deal could reduce competition and choice for shoppers.

Mr Lewis said “there is a huge opportunity from the merger”, but Tesco has faced criticism from investors over the move, with some shareholders branding the takeover tilt a “distraction” and urging the Big Four grocer to scrap it.