Sales at Tesco Ireland fell by 4.4pc on a on a like-for-like basis in the 13-week period to the end of May, according to new figures from the grocery giant.
The sales were for the first quarter of the group's 2015-2016 financial year. Despite the drop, the decline in Irish sales was less than the falls seen in recent quarters.
Tesco Ireland sales had dropped by 6.7pc in the fourth quarter of Tesco's previous financial year, while the two preceding quarters both saw sales declines of about 7pc.
Tesco Ireland CEO Andrew Yaxley said that while the retail market continues to be very competitive "we're pleased to see some encouraging indications that our investments in Staying Down prices and improved customer service are moving us in the right direction".
In a trading update published yesterday, the company said like-for-like sales fell by 1.3pc in the quarter, which was better than analyst predictions that sales would fall by more than 2pc. The performance still represents a decline in sales despite Tesco committing hundreds of millions of pounds to lowering prices. However, it is an improvement on the 4pc drop in the same period last year and the 1.7pc fall in the previous quarter. Shares in Tesco were up by 3.3pc in early morning trading following the announcement.
"Whilst the market is still challenging and volatility is likely to remain a feature of short-term performance, these first quarter results represent another step in the right direction," chief executive Dave Lewis said.
The results come after a turbulent year for Tesco capped by the ousting of chief executive Philip Clarke, an accounting scandal that led to Sir Richard Broadbent resigning as chairman, and a £6.4bn pre-tax loss. In an attempt to reverse falling sales and to rebuild its balance sheet, Mr Lewis, who was poached from Unilever, has already unveiled a string of drastic measures.
He has closed almost 50 shops, scrapped the defined benefit pension scheme, and shut Tesco's head office in Cheshunt.
The company employs more than 15,000 people across 142 stores in Ireland and has more than 300,000 staff in total.