LONDON (Reuters) - Tesco (L:TSCO), Britain's biggest retailer, posted the worst quarterly drop in underlying sales in its key home market since Chief Executive Phil Clarke took the helm in 2011, raising further questions over his trading strategy.
Clarke is two years into a multi-billion pounds turnaround plan for its British business which contributes two-thirds of sales and profit for the group, the world's third-largest retailer after Wal-Mart (N:WMT) and Carrefour
Tesco said on Wednesday sales at UK stores open over a year, excluding fuel and VAT sales tax, fell 3.8 percent in its fiscal first quarter, hurt by price cuts and a weak food market.
That compares with analyst forecasts for a decline of 3.5-4.1 percent and a fall of 3 percent in the fourth quarter of Tesco's 2013-14 year.
"We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers," said the firm.
"We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole," it added.
Tesco said total first quarter sales fell 0.9 percent at constant rates, excluding petrol.
(Reporting by James Davey; editing by Kate Holton)