Tesco sales are falling at the fastest rate in the grocery industry as ongoing price wars continue to benefit shoppers and squeeze the major retailers.

The supermarket, which is expected reveal a steep fall in half-year profits on Thursday after a £250 million shortfall in its accounts, saw its sales fall 3.6% in the 12 weeks to October 12, according to data from Kantar Worldpanel.

Its market share declined to 28.8% from 30.1% a year earlier but Tesco will draw some comfort from the sales decline being the weakest since June.

The grocery market continues to show discount retailers Aldi and Lidl growing share, albeit at a slightly slower rate, while upmarket rival Waitrose achieved a record market position after a strong rise in sales.

Grocery prices fell by 0.2%, a record since Kantar's records began in 2006, as the growth of Aldi and Lidl continues to drag prices down across the industry.