Tesco, first quarter sales growth after three years

For the first since three years, Tesco reported its first quarter of underlying UK sales growth on Wednesday, but warned it was still battling in a price war which would pressure operating profits in the current year.

The firm said UK sales at stores open over a year rose 0.9 percent in the 13 weeks to Feb. 27, its fiscal fourth quarter, building on growth over its six-week Christmas trading period. Tesco also reported a full year operating profit before one-off items of 944 million pounds ($1.3 billion), just ahead of analysts' expectations of 932 million pounds and the 940 million pounds it made in 2014-15.

The english retailer continued to cut prices to stay competitive in a "challenging, deflationary and uncertain market" which would slow the pace of profit improvement, particularly in the first half of its current year.

Chief Executive Dave Lewis said he had made significant progress in rebuilding trust in Tesco after an accounting scandal severely dented its reputation in 2014: "We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices,"