Tesco Meets Expectations With Rise In Net Profit

Tesco has announced a 10.3 per cent rise in pre-tax profits for the first half of 2008, in line with company expectations despite the tough retail environment .
Underlying pre-tax profit rose from £1,317m to £1,453m in the 26 weeks to 23 August with sales, including VAT, up by 14.1 per cent to £28.1bn.
The supermarket giant said its core UK business has coped well despite losing ground to discount stores amid the credit crunch, with sales up by 9.7 per cent to £20.1bn. Like-for-like sales in the UK grew by 3.7 per cent, excluding petrol .
Despite lowering prices to entice more budget-conscious, Tesco said it had managed to maintain margins in the UK and that customers’ response to the launch its new range of discounted branded goods had been “very pleasing”.
A spokesperson for the UK’s largest retailer said: “Food sales have remained solid during the first half, despite emerging evidence of consumers trading down in some product categories to help relieve stretched household budgets .”
“Non-food growth has slowed but has remained positive and our performance against the overall market is strong. Petrol participation has risen as a result of high oil prices and a stronger US dollar .”
Total international sales rose by 26.8 per cent at actual exchange rates and by 12.6 per cent at constant exchange rates, to £8bn, while like-for-like global sales climbed 1.0% in the first six months.
Tesco chief executive Sir Terry Leahy added: “Our business is strong, broadly-based, increasingly international and, I believe, well-placed not just to cope with the challenges which lie ahead but also to grasp the growth opportunities open to us by continuing to invest in our strategy.”

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