Tesco has posted a drop in underlying British sales for the fourth quarter in a row as cash-strapped shoppers cut spending on discretionary goods like clothing and electricals and gave a muted reaction to price cuts.

However the international business excluding fuel and on a like-for-like basis was up 1.1 per cent, held back by disruption in Thailand caused by flooding.

Tesco makes about two-thirds of its sales and three- quarters of its profit in Britain. The company, which takes about one in every £10 spent in British shops, said sales at British stores open more than a year, excluding fuel and VAT sales tax, were down 0.9 per cent in the 13 weeks to November 26th, Tesco’s financial third quarter. – (Reuters )