Tesco's 10% Profit Growth Amid Weak Economy

Weaker trading conditions have not refrained Tesco from meeting half-year profit targets - with the supermarket giant today reporting a 10% growth in UK sales.

Adverse market conditions have failed to damage the retailer's performance - amid calls for interest rate cuts and radical moves to stabilise the global financial services industry.

Earlier this morning Tesco shares jumped by around 5.4% - following the announcement on second quarter results.

Over 20 million UK shoppers visit the supermarket chain every week.

And despite being "hard pressed", retail analysis - suggesting the sector is in its worst condition in 30 years - is over exaggerated, according to Tesco boss Terry Leahy.

He told Reuters: "Inflation has passed its peak - and that will leave room for interest rate cuts which I think will be welcomed."

"Also, though, it's important that we get banks back to doing their job, which is to provide liquidity for the real economy and lending at sensible prices," added Mr Leahy.

Deutsche Bank described the slight acceleration in second-quarter UK underlying sales as "solid and reassuring".

Globally positioned as the third top performing retailer - just behind US mammoth Wal-Mart and France's Carrefour - Tesco said profit before tax and one-off items was £1.45 billion in the 26 weeks to August 23, on sales up 14% to £25.6 billion.

The interim dividend was up 11.6% to 3.57p.

Analysis by Cazenove suggested: "The outlook for consumer economies around the world remains highly opaque. However, the company expresses confidence in its ability to thrive in tough conditions - corroborated by these results."

Tesco has aimed to battle the increasing 'credit crunch' by releasing a new range of 400 low-cost products.

Last week's move is expected to maintain the retailer's position in the market


Related UK National News Stories
Click here for the latest headlines.

07 October 2014
Fifth Tesco Executive Asked To 'Step Aside'
A fifth Tesco executive has been asked to step aside, while the supermarket continues to investigate an alleged £250 million profit forecast overstatement. Kevin Grace, commercial director at Tesco has been asked to step aside, as part of the investigation, according to a report by the Financial Times.
17 July 2006
Parents warned over children's internet use
A third of children, many as young as 11, use blogs and social networking sites at least two or three times a week, yet two-thirds of parents don't know what a blog is, a new report has revealed. The 'Get I.T.
20 September 2005
Tesco reports profits rise
Britain’s leading supermarket group, Tesco, has reported an 18.7% rise in profits in their first-half sales figures. The supermarket giant saw pre-tax profits rise to £908 million for the 24 weeks to August 13, beating average forecasts of £886 million. The group also reported a rise in sales of 14.1% to £18.
18 April 2012
£1bn Makeover For Tesco
Tesco have announced a £1bn store makeover after UK profits have fallen for the first time in more than 20 years. "We fully recognise that we need to raise our game in the UK," said Tesco's chief executive, Philip Clarke, after the country's biggest retailer reported a 1% fall in UK profits to £2.5bn.
04 December 2013
Tesco UK Sales Fall In Third Quarter
Supermarket giant Tesco has recorded a fall in its underlying third quarter sales in the UK. The group said the decline is due to a challenging market for groceries. In its latest trading update, the supermarket said its like-for-like UK sales, which ignore new shop openings, and excluding VAT and petrol, had declined by 1.5%.