Tesco has reported “encouraging early signs” that grocery inflation is starting to ease while revealing a leap in sales.
The UK’s largest retailer said there was a slowdown in price growth across the market and it was continuing to focus on value for its customers.
The company updated on its performance as the sector faces regulatory scrutiny on its pricing.
It is not obliged to give profit figures in its first quarter update but said like-for-like sales, excluding fuel, rose 9% to £10.8bn in the 13 weeks to 27 May.
The company said that data showed it had “led the market in cutting prices on essential items to support customers”.
While Tesco itself has been accused by a consumer group of a lack of transparency over its Clubcard discounts, the Competition and Markets Authority (CMA) said last month it was examining the wider grocery and fuel industry for any failure of competition that could mean consumers are being overcharged.
Food inflation has proved among the most stubborn elements of the cost of living crisis in recent months, with the rate continuing to run above 19%.
While the bitter rivalry between chains, including the discounters, and diversity of choice has long been credited for healthy competition in the grocery sector, there are concerns they have been too slow to pass on wholesale price cuts.
On the fuel issue, pump prices have fallen sharply since large disparities between delivery and pump costs were flagged.
The government has warned it is examining the potential for food price caps amid frustration that grocery costs have been slow to follow suit.
The sector argues that punitive costs remain, especially in the supply chain, with energy and labour among the factors weighing heavily across the board.
