Tesco sales fall again as foreign divisions suffer drop in profits As well as a drop in UK sales, Tesco is also expected to suffer a 6pc fall in profits in Asia and a 20pc drop in its European profits, meaning group trading profits could fall for the second consecutive year. However, Philip Clarke, Tesco's chief executive, is likely to claim that Britain's biggest retailer is making progress in its home country and blame the continued underperformance on non-food items such as consumer electricals, which the company is attempting to withdraw from as sales move from stores to the internet. Crucially, Mr Clarke will also stand by Tesco's market-leading profit margin of approximately 5.2pc. Next week Tesco will reveal plans to relaunch its Tesco Finest brand, which is the sponsor of the popular ITV drama Downton Abbey. Nonetheless, the pressure on sales has led to growing speculation in the City that Tesco could be forced into another rebasing of its UK business after a profits warning last year. However, Mr Clarke is expected to stress that Tesco is taking a more "disciplined" approach to investment, with spending focused on online, Tesco Express convenience stores, and revamping existing stores, rather than opening new supermarkets. This approach means that Tesco's trading profits in the UK could rise by 0.9pc despite the fall in sales, according to analysts.