The Telegraph reveals that Tesco, the UK’s largest retailer, reported a slowdown in sales growth and gave warning that four interest rate rises in less than a year have hit consumer confidence. Group sales at Tesco increased 10pc in the 13 weeks to May 26 – boosted by a strong performance in Asia – but in the UK like-for-like sales growth slowed to 4.7pc, down from 5.8pc in the previous quarter. City analysts had expected Tesco to report a 5.2pc increase in UK like-for-like sales. Shares in the retailer closed down 22 and 1/4 p at 434 and 1/2 p – the largest one-day fall for four years.
“It appears that higher UK interest rates might finally be starting to bite,” said Sam Hart, retail analyst at Charles Stanley. Andrew Higginson, finance director at Tesco, said customers were more cautious, particularly when buying non-food products. “Things have got a bit tougher with the interest rate rises, but we are still outperforming the market,” he said, adding he had no idea why Tesco shares had fallen so sharply. “We are very pleased with the numbers. They are good numbers.”