Tesco’s like-for-like sales dropped by a dramatic 3.7% in the quarter ending 24 May, a drop the supermarket attributes to a "significant reduction" in untargeted promotions.
Clarke claims the supermarket is as competitive as ever due to initiatives that include cutting home-delivery charges and making grocery click and collect free.
He said: "As expected, the acceleration of our plans is impacting our near-term sales performance.
"The first quarter has also seen a continuation of the challenging consumer trends in the UK, reflecting still subdued levels of spending in addition to the more structural changes taking place across the retail industry."
Tesco’s results come the day after Kantar Worldpanel released figures for the 12 weeks ending 25 May that showed Asda was the only one of the big four supermarkets to grow market share year on year.
Asda recorded growth of 2.4%, while Tesco and Morrisons recorded drops of 3.1% and 3.9% respectively.
Meanwhile, the high end and the low end of the market continue to perform well, with Waitrose, Aldi and Lidl all recording strong growth.
John Ibbotson, director of retail consultants Retail Vision, argues that today’s disappointing Tesco results will go down as the supermarket’s "Black Wednesday".
He said: "Despite the PR spin, Philip Clarke's turnaround plan is not working. Tesco's market share is being destroyed by the low-cost discounters, Aldi and Lidl, and, at the other end of the spectrum, Waitrose and Marks & Spencer.
"£200m in cuts is nothing when both ASDA and Morrisons are returning £1billion to customers."