Outlook for Tesco is looking up as the retailer boasts an improved sales performance in its first quarter trading update.

The once struggling supermarket giant saw UK like-for-like sales (LFLs) down 1.3%, compared to -4.0% in the same quarter last year.

It also said it has completed its initial range reviews in 15 categories, and had reduced lines by up to 20%. Despite this it says it has retained ’a market-leading level of choice.’

Chief executive of the company, Dave Lewis, called this a ‘step in the right direction’, despite the ‘challenging’ market.

He said: “We set out to serve our customers a little better every day and the improvements we are making are starting to have an effect.  We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing.  Customers are experiencing better service, better availability and lower, more stable prices and are buying more things, more often, at Tesco.

“These improvements have come during the restructuring of our office and store management teams, which testifies to the focus, skill and commitment of colleagues across the business.  We have also seen an improved performance in our international markets, as we continue to focus on serving customers better.”

After it made price cuts to branded products in January, Tesco said it had now rolled out 300 additional price cuts across the quarter.

Tesco will host its AGM later, which could see interesting scenes as shareholders have been encouraged to revolt against Lewis’ pay. Investor group Pirc is advising they vote against key resolutions.