Tesco, the supermarket giant, recently said that sales growth in the United Kingdom almost ground to a halt over the last 3 months as the grocer struggled with plunging food inflation.

It was revealed by the company that like-for-like sales excluding petrol climbed to 1.1 percent in the three months to May 30, which was a mere 0.1 increase after adjusting for the higher VAT rate.

From Guardian.co.uk:

“Although customers in the UK continue to face some uncertainties about their personal finances, we continue to see evidence of a steady consumer recovery,” the firm said.

Chancellor George Osborne is said to be weighing up a potential hike in VAT next week to help tackle the deficit, but McIlwee said the coalition urged caution in managing a fragile UK recovery.

He warned: “If there is an increase in VAT on products it should be in the future rather than now.”

In the UK, Tesco benefited from its World Cup marketing campaign, with sales of some televisions more than doubling as customers upgraded for the tournament.

The firm’s international business has also been helped by the World Cup appearances of four of Tesco’s overseas markets – South Korea, Slovakia, Japan and the USA.

The UK’s number one supermarket is still expecting like-for-like sales growth in the UK of around 3 percent for the full year.

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