Tesco has reported a slower rate of decline in sales at its UK stores as it tries to stem the flow of customers switching to discount chains.
UK sales fell 1.3% for the three months to the end of May, compared with a 4% decline a year earlier.
The result beat analysts' forecasts of a fall of 1.6%-3%, and was better than the 1.7% fall reported in the fourth quarter of the last financial year.
Tesco chief Dave Lewis said it was a "step in the right direction".
"We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing," he said.
Shares in Tesco, the UK's largest supermarket chain, closed up 2.7% at 223.65p.
Including its international businesses, sales across the Tesco group dropped 1.3% in the quarter compared with a 3.4% dip a year ago.
Mr Lewis, who took the helm in September, is trying to revive the fortunes of Britain's largest supermarket after it reported the worst loss in its history in April.
Tesco reported a full-year pre-tax loss of £6.4bn, one of the largest in UK corporate history. About £4.7bn of the losses were the result of the fall in property value of its UK stores, 43 of which it said would close.