Supermarket giant Tesco was forced to defend its £1 billion turnaround plans today after UK sales dropped amid further fall-out from the horsemeat scandal.
The group posted a 1% fall in UK like-for-like sales in its first quarter, raising questions over the progress of its recovery efforts.
It said the horsemeat crisis added to sales woes in its general merchandise division, which have been acting as a drag on wider performance.
Tesco said it saw a slump in demand for frozen and chilled convenience food in the three months to May 25 after it was forced to withdraw four beef products found to contain horse DNA.
The first-quarter sales slide marks a reversal in recent improvements, following a 0.5% bounceback in sales at the end of its financial year.
Its international business also suffered in the quarter to May 25, with sales falling across Asia and Europe.
The results will heap more pressure on chief executive Philip Clarke after he recently reported the group's first annual profits fall in nearly 20 years, down 51.5% to £1.96 billion.
Mr Clarke insisted its turnaround was on track and promised a relaunch of its non-food ranges, starting in smaller stores in the coming months followed by a company-wide overhaul later in the year.
Tesco said the horsemeat impact was "well behind it now" after completing nearly 1,500 tests on its own-brand meat ranges and finding new suppliers for the four products affected, which have since been relaunched.
Sales of frozen and chilled convenience meals have picked up in recent weeks.
But it admitted general merchandise sales would remain in the red for the remainder of the year, with a recovery in non-food sales not likely until next year.
Tesco is pulling out of unprofitable consumer electronics products, which it said "take up a lot of space and don't make much money".
Mr Clarke said the shift away from consumer electronics was expected to have a big impact on sales, but was "all part of the plan".
Shares fell around 4% as analysts described the sales performance as "disappointing".
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said Tesco's turnaround plan "has yet to gain real traction".
"The decline in like-for-like sales was largely anticipated, although the weakness in the international operations is more of a concern," he said.
Mike Dennis, analyst at Cantor Fitzgerald, said Tesco had lost UK market share and "will need to show that a move to small stores and better use of hypermarket space can rebuild sales growth".
Tesco posted a 4.6% drop in international sales after seeing a 3.8% fall in Asia and a 5.5% slump across Europe.
It said it remained in advanced talks over the sale of its loss-making US arm Fresh & Easy, with potential suitors interested in buying the chain in its entirety.
Tesco recently confirmed plans to offload its US business - a decision that left it nursing a £1.2 billion hit in its annual results.
The group has been in recovery mode since falling market share and intense competition prompted the chain's first profits warning in 20 years in January 2012.
Mr Clarke, who started his career stacking shelves in Tesco, unveiled a £1 billion overhaul plan in April last year and recently revealed a shift in strategy away from increasing store space to focus more on convenience outlets and online sales.
He said the turnaround was starting to bear fruit: "Customer perceptions are improving across all aspects of the shopping trip in the UK, driven by continued progress on our plans to 'Build a Better Tesco' and our market-leading multichannel offer."
Online grocery sales continued to outperform the market, while Tesco added that clothing saw another strong performance, led by its F&F brand.
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