Tesco's coffee business exceeded expectations in the first quarter of the year.

Tesco PLC, the largest retailer in the UK, updated its first-quarter results, showing comparable sales growth of 0.9 per cent in the first quarter, of which sales in the UK market rose 0.3 per cent, exceeding analysts' expectations of 0.2 per cent, and achieved two consecutive quarters of growth.

Comparable sales in Tesco's international market grew by 3.0% in the first quarter ended May 26, including 2.8% in Europe and 3.3% in Asia. At real exchange rates, international sales grew by 5.6 per cent in the first quarter, including 8.2 per cent in Europe and 2.8 per cent in Asia, while group sales grew by 1.8 per cent.

Although Dave Lewis, chief executive of Tesco, said he was satisfied with the growth of the UK market for two consecutive quarters, he said the deflationary market was still extremely challenging.

Tesco also announced in its results that it had sold its coffee business, Harris+Hoole, after it sold its restaurant business, Giraffe, and its Turkish grocery business, Kipa.

Tesco bought 49 per cent of Harris+Hoole in 2012, with the rest held by the brand's founders.

Affected by Brexit, Tesco plunged more than 8 per cent at the start of trading on Thursday.