Tesco Ireland has said its sales in the year to the end of February fell by 7.5% to just under €2.9 billion. The supermarket giant said falls in prices were the main reason for the drop in the value of sales.
Tesco Ireland said, however, that lower prices had led to an increase in the volume of sales and the number of people in its stores.
It also said trading at the 11 Tesco stores in border areas has increased by an average of 33% from a year earlier, indicating a 'significant recovery' of trade from customers who previously shopped in Northern Ireland.
Tesco Ireland says it has cut prices of 12,500 products by an average of 20% since May last year.
It said there were changes in customer buying patterns during the year, with own-label product sales increasing from 32.5% of total sales to 35%, and stronger sales growth in clothing and other non-food categories.
Tesco Ireland chief executive Tony Keohane said the market had steadied but there was still uncertainty about consumer confidence and spending. 'Trading continues to be intensely competitive,' he added.
Tesco profits up 10% despite tough UK market
Meanwhile, parent company Tesco today unveiled a 10.1% rise in annual profits to a record £3.4 billion sterling.
The result came despite slowing UK sales growth in the year to February 27 amid tougher competition and easing food inflation.
Chief executive Terry Leahy said the retailer 'had weathered the economic storm well'.
Tesco said its record group profits were aided by a strong performance in Asia. Net profits jumped by 9.3% to £2.33 billion in the group's financial year which ran until the end of February. That compared with £2.13 billion in the previous year and beat market expectations of £2.32 billion. Revenues grew 6.8% to £62.537 billion.
'Our positions in international markets and non-food meant we faced strong headwinds when the downturn came but it will be these parts of our business which will grow fastest as the recovery strengthens,' Mr Leahy said.
'Across all parts of our strategy - UK, international, non-food, services - our business is now stronger than it was before the recession. With leaner operations, improved market shares, strategic acquisitions performing well and a strong organic development programme, we're well placed for sustained profitable growth,' he said.
The company also issued plans to create 16,000 jobs this year, including 9,000 new positions in Britain. Tesco currently employs more than 460,000 people in 14 countries around the world and has a major presence in Asia including in China, Japan, Malaysia and South Korea.
'We have delivered a strong performance in Asia despite challenging economic conditions in the region,' Tesco said. 'We have grown sales and profits well - driven by new space and the strong performance of the stores acquired in Korea in 2008, which are now profitable,' it added.
'As economies generally in Asia start to recover we are seeing improving sales trends in all our businesses except Japan, where economic conditions remain subdued,' the company said.
