Supermarket giant Tesco has admitted it must "do better" in the UK after missing growth targets and seeing sales fall on a year ago.
The retail giant promised new products and services after revealing a 0.7% drop in fourth-quarter UK like-for-like sales, excluding VAT and fuel.
Its fast-growing Asian business helped offset a tough domestic market, with Tesco reporting another year of record underlying profits - up 12.3% to £3.8 billion in the year to February 26.
But new boss Philip Clarke said the UK performance was not good enough as it failed to keep up with rivals in areas such as clothing and electricals.
"We didn't achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half," the group said.
"We can do better and we are taking action in key areas - for example, to drive a faster rate of product innovation and to improve the sharpness of our communication to customers."
The latest sales results mark a tough debut for the new chief executive, who took over from Sir Terry Leahy last month.
The group also hinted at new and improved food lines to improve UK trading and pointed to recent launches, such as its move into the second-hand car market through Tesco Cars, as an example of recent product innovation.
While Mr Clarke stopped short of waging a price war, experts warned the non-food drive could spell further hardship for high street retailers.
Matthew McEachran, at Singer Capital Markets, said: "With over £5 billion of sales and space potentially increasing by around 10% a year, intensification of their offer will result in more pressure for a number of general retailers including those already having to compete harder."
