Britain's biggest supermarket chain Tesco today reported sales growth was slowing as consumer demand becomes more subdued.

The group said like-for-like sales in its 700-plus UK supermarkets for the three months to May 18 grew 4.5per cent.

That compared with a 4.9 per cent rise for the previous quarter, which included Christmas, and 6.4 per cent increase in the three months which included the post-September 11 period.

Corporate affairs director Lucy Neville-Rolfe said: "I think you have seen from other retailers there has been a slowing in the market - we paged that up at our year-end."

She said the group, which is based in Cheshunt in Hertfordshire, had said it was expecting to return to more normal levels of growth.

Tesco's more normal sales growth is about 3.5 per cent.

Ms Neville-Rolfe said: "Last year, we had a very buoyant time.

"I think a lot of people were staying at home after September 11.

"To step back from that across the industry, we have traded strongly and have strong volume growth, on top of strong volumes last year."

The group, which was holding its annual meeting today in London, continued to find prices coming down.

Ms Neville-Rolfe said it was also driving growth from services such as internet banking and expansion overseas.

Tesco is aiming to have as much store space overseas as it does in the UK by the end of next year.

It currently has around 250 international stores.

In the UK, it is the market leader with about 16.7 per cent of the market.