Tesco reveals 'strong' increase in amount of groceries bought by UK shoppers

This came on the back of a 5 per cent increase in food sales, with high demand for fresh produce helping to drive higher sales volumes.

It added that sales of Tesco Finest products were “particularly strong” as shopper demand for premium products grew despite continued pressures on household budgets from higher mortgage and rental costs. Tesco said it saw more shoppers switch to the grocery giant from other UK “premium supermarkets” over the quarter. It said it expects to deliver an operating profit of at least £2.8bn for the current financial year, holding its targets set in April.

Ken Murphy, chief executive of Tesco, said: “We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation.

“Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets.”

The results announcement came ahead of the retailer’s annual general meeting.

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: "This is another solid trading update from Tesco with further volume growth and market share gains in the first quarter.

"The group is more than holding its own against the German discounters and carries good momentum into the upcoming summer of sport.

“With food prices moderating, the UK supermarkets can no longer rely on inflation to boost sales. This means volume growth is critical and Tesco is delivering just that.

"The group has worked hard for several years to lower prices, improve the quality of its ranges and bolster its brand perception. This is clearly resonating with the UK consumer.

“Lower food inflation should also ease pressure on consumers, whose finances have been squeezed from all angles by rising prices, no more so than for the weekly shop.

"With interest rates likely to be cut sooner rather than later, this could provide an additional boost to UK consumer sentiment.

“Tesco cannot afford to rest on its laurels. Aldi and Lidl continue to expand at a rate of knots, and the UK economy is not out of the woods, with an election looming.

"However, Tesco is in the strongest position it's been for many years and will look forward to the rest of the year with confidence."

Richard Hunter, Head of Markets at interactive investor, commented: “Tesco’s seemingly unassailable position as the largest UK grocer has once more been confirmed as it continues to display its dominance. The group’s overall market share of 27.6 per cent is equivalent to that of its two nearest rivals (Sainsbury and Asda) put together. As such, it is keeping the competition at arm’s length in what is a notoriously ruthless environment.”