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Supermarket giant Tesco has reported a slowdown in UK sales growth as the retailer looks towards a more challenging market environment over the next year.

In a trading statement the company, which has been slashing thousands of prices in a bid to retain its market share, revealed that like-for-like sales excluding petrol rose by 4.7 per cent in the 13 weeks to May 26th.

That compared to growth of 5.8 per cent reported by Tesco in the previous quarter.

In a telephone interview the retailer's finance and strategy director Andrew Higginson subsequently warned that the company faced a "tougher" year due to increasing caution among UK consumers in the wake of recent interest rate rises.

But despite the warning, Tesco remains generally upbeat about its overall performance.

The company revealed that while its rate of growth in the UK's non-food sector had eased, overall group sales were up ten per cent over the 13-week period as a result of a strong performance by its expanding international operations.

International sales were up by 24.6 per cent at constant exchange rates, with growth led by a solid performance in the Asian market, where sales were up 32 per cent following the consolidation of Tesco operations in China.

Commenting on the results, Tesco chief executive Terry Leahy said: "We've made a good start to the year across the group.

"International is delivering particularly strong growth; pushing on well with both new store development and the integration of the stores we acquired last year," he added, revealing that the company's plans to open stores in the United States later in the year were "well on track".

But as Tesco competes to retain its dominant market share in the UK, analysts are expecting its smaller rival J Sainsbury to report stronger growth when it issues its own trading statement tomorrow.