Sales are down again at the UK's biggest retailer by 1.5% in the 13 weeks to the end of May. However, Tesco says its performance has been robust as it tries to turn round its fortunes. In the previous quarter the retailer saw sales decline 1.6%.
Tesco says it managed to gain market share from its rivals
Recorded its best ever week outside of Christmas during the Diamond Jubilee celebrations
Those £1 billion worth of sales are not included in today's figures
Tesco's former chief executive Sir Terry Leahy told BBC1's Andrew Marr show: "Tesco is very strong, it's profitable, it's growing...It has a very good market position...What the new team are doing now is exactly right...the recovery is coming and they're investing ahead of the recovery."
A trading update for the first quarter of Tesco's financial year is expected to reveal that the recovery plan has yet to gain momentum, and the group is still losing market share amid the price war and a buoyant performance from discounters Iceland, Aldi and Lidl.
Andrew Kasoulis, an analyst at Credit Suisse, expects like-for-like sales excluding fuel and VAT to decline 1.5 per cent in the 13 weeks to May 26, in only a slight improvement on the 1.6 per cent fall in the previous quarter.
The sales performance comes at a time when food price inflation has been more than 4 per cent, indicating that underlying sales volumes at Tesco are significantly down. Tesco has been trying to turn around its performance through a raft of special offers, including money-off vouchers.
The rivalry between supermarket giants Tesco and Sainsbury's will be in focus this week when the pair issue trading updates.
Tesco is expected to suffer another bloody nose on Monday when it reveals it has continued to lose out to rivals despite heavy discounting and a £1 billion recovery plan.
The chain, which is the UK's biggest supermarket with 2,800 stores, is fighting to win back shoppers after dire trading led to its first profits warning in 20 years, while its shares recently hit three-year lows.
Chief executive Philip Clarke, who recently declined his bonus because of the poor performance, has launched a recovery plan that has seen the grocer focus on revamping stores, hiring more staff and sharpening pricing.
Sainsbury's hails success of its price-matching scheme
Sainsbury's hailed the success of its price-matching scheme as it delivered a better than expected rise in annual profits.
The UK's third largest supermarket, which has more than 1,000 stores, said underlying profits increased 7.1% to £712 million in the year to March 17, beating City forecasts.
The group said overall sales excluding VAT rose 5.6% to £22.3 billion, taking its market share to the highest level for nearly a decade at 16.6%. It says the chain was helped by its Brand Match price scheme, which guarantees to match Asda and Tesco on 14,000 branded goods.
However, the chain, which opened 73 Local convenience stores last year as part of 1.4 million sq ft of new space, said it will slow its rate of store expansion from just over 7% to about 5% in the current financial year.
Justin King: 'We understand what our customers want'
Sainsbury's Chief Executive Justin King said: "We are succeeding by understanding what our customers want, supporting and inspiring them to Live Well For Less. Delivering quality and value is a compelling offer, in tune with what today's savvy shoppers want.
"Brand Match, combined with our use of coupon-at-till, has improved Sainsbury's price perception whilst retaining the benefits of our heritage in quality and service...
"Whilst the wider economic situation remains uncertain, we remain confident that our clear strategy, market insight and strong values will enable us to make further progress both in our core food and non-food businesses, as well as new channels and services in the year ahead."
Sainsbury's experience higher than usual demand for fuel
Sainbury's has said that there has been an increased in demand for petrol at their supermarkets.
“We’ve been working hard to minimise the impact of this situation on our customers. At the moment our supply chain and delivery services are performing well thanks to the hard work of our colleagues and petrol suppliers.
"We are experiencing higher than usual demand for petrol and diesel, but currently the vast majority of our petrol filling stations are open and operating well.”
Sainsbury's heaped further pressure on its rivals today after the supermarket chain delivered better-than-expected sales figures.
The UK's third largest supermarket chain said like-for-like sales, excluding fuel, rose 2.6% in the 10 weeks to March 17, compared with expectations for a rise of 2.1%.
Sainsbury's, which has more than 1,000 stores, grew its share of the convenience store market, with sales up 20% following the opening of 15 new stores. It also claimed to be the fastest growing online grocer with trading up, after it served an average of 165,000 customers a week.