Tesco has reported a 12.5 per cent rise in pre-tax profits to £1.6bn for the six months to the end of August.
The supermarket giant said strong international growth helped it overcome “subdued” demand and “modest” growth in the UK, caused by food price inflation and higher fuel costs .
Total group sales rose by 7 per cent to £29.8bn in the six months August 28, with impressive performances reported in Asia. International like-for-like sales increased by 2 per cent to £10 billion.
Sir Terry Leahy, chief executive of the UK’s largest retailer, said: “The global economic headwinds of the last two years are being replaced by the tailwinds of recovery in most of our markets. Our important Asian markets in particular are emerging strongly from recession.”
In the UK, like-for-like sales, which exclude petrol and VAT, grew by just 0.3 per cent in the six months August 28.
Lawrie McIlwee, Tesco’s Finance Director, described the UK economy as “pretty stagnant”, but said there were “signs of a recovery”.
He added that higher food inflation last year made for tough comparatives, while higher fuel costs meant customers had less money to spend on their shopping .
Mcllwee said Tesco would launch new insurance products and a fixed-rate savings account in the next few months as part of its Tesco Bank operation, but confirmed its move into the UK mortgage market would be delayed until 2011 as the retailer had yet to receive regulatory approval from the Financial Services Authority.
