Tesco has missed its UK growth targets despite recording another year of record annual profits.
The supermarket giant landed underlying profits of £3.8 billion, up 12.3 per cent, overall but UK like-for-like sales fell.
Tesco said UK like-for-like sales excluding VAT and fuel fell 0.7 per cent in the three months to 26 February - leaving overall sales flat over the financial year as it struggled to combat tough consumer spending conditions.
The group attributed the fall in shopper spending to government austerity measures and record petrol prices had hit shoppers hard and said it had failed to keep up with the market on non-food.
Tesco's overall group profits, which rose 11.3 per cent to £3.5 billion on a statutory basis, were driven by Asia and Europe - contributing nearly 70 per cent of growth in the year.
Trading profits leapt 17.5 per cent to £570 million in Asia after like-for-like sales rose 2.3 per cent across the region, while Europe also saw a double-digit profits rise, up 13.7 per cent.
The group said: "We didn't achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half. We can do better and we are taking action in key areas - for example, to drive a faster rate of product innovation and to improve the sharpness of our communication to customers."
Philip Clarke presented his first trading statement since taking over from Sir Terry Leahy last month.
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