Tesco has said that increased ''external pressures'' in Ireland contributed to a fall in sales in Europe in the latest three months under review.
Total sales in Europe - excluding petrol - were down 3% at constant exchange rates, and up marginally (0.1%) at actual exchange rates in the 13 weeks to May 25.
Like-for-like sales (excluding petrol) in Europe were down 5.5%.
''In all markets, consumers continue to exercise caution in their shopping habits, as they face the direct impact of a variety of austerity measures linked to the tough economic environment,'' Tesco noted.
''The impact of these external pressures increased in Ireland, with a significant reduction in consumer sentiment and spending following the announced introduction of a Local Property Tax on residential properties,'' the company added.
The supermarket giant was also left counting the cost of the horse meat scandal as it revealed falling UK sales after a slump in demand for frozen and chilled convenience food.
The group posted a 1% fall in UK like-for-like sales in its first quarter following a "small but discernible impact" from the horse meat crisis after it was forced to withdraw four products.
Tesco said it was also suffering from continuing woes in its general merchandise division, with the sales slip marking a reversal in recent improvements following a 0.5% bounce back in sales at the end of its financial year.
But the chain insisted its turnaround plans were on track and promised a relaunch of its non-food ranges, starting in smaller stores in the coming months followed by a company-wide overhaul later in the the year.
It added sales of frozen and chilled convenience meals had picked up in recent weeks.
Tesco said the horsemeat impact was "well behind it now" after completing nearly 1,500 tests on its own-brand meat ranges and finding new suppliers for the four products affected, which have since been relaunched.
But it admitted general merchandise sales would remain in the red for the remainder of the year, with a recovery in non-food sales not likely until next year.
Tesco said it was pulling out of unprofitable consumer electronics products, which "take up a lot of space and don't make much money".
Today's first-quarter figures will heap more pressure on chief executive Philip Clarke as he seeks to improve trading after recently reporting the group's first annual profits fall in nearly 20 years, down 51.5% to £1.96 billion sterling.
He said the move to shift away from consumer electronics products was expected to have a big impact on sales, but was "all part of the plan".
Last week, Tesco announced that PJ Clarke has been appointed as the new chief executive of Tesco Ireland, following the announcement that Tony Keohane is to step down from the role in July. Mr Keohane, who was chief executive for seven years, is to become Chairman of Tesco Ireland.