British supermarket chain Tesco has posted quarterly sales of £9.88bn ($12.09bn) for the 13 weeks to 28 May, down by 1.5% from the same period of last year.

The company highlighted that the market remains ‘challenging’ as shoppers are purchasing fewer items and switching to cheaper alternatives due to the rise in inflation.

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Tesco chief executive Ken Murphy said: “Whilst the market environment remains incredibly challenging, our laser focus on value, as well as the daily dedication and hard work of our colleagues, has helped us to outperform the market.

“Our material and ongoing investment in the powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices is removing the need for customers to shop elsewhere.

“Although difficult to separate from the significant impact of lapping last year’s lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment.

“Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.”

Tesco’s group retail quarterly sales amounted to £13.57bn, representing a 2% rise in like-for-like (LFL) sales.

The company improved its market share in the UK, driven by the distribution of Aldi Price Match and Low Everyday Prices products. It also kept its full-year profit guidance unchanged.

Tesco claimed to have maintained the largest improvement in quality and value perception of any food retailer in the UK market compared with before the Covid-19 pandemic.

In Ireland, the retailer’s sales were ahead of their pre-pandemic levels, with its market share increasing by 11 basis points from a year earlier.

For the fiscal year 2021-22, Tesco’s total revenue was £61.3bn, up by 6% compared with the previous year.