Tesco celebrates 'outstanding' performance

Supermarket giant Tesco today said it had made an “outstanding” start to its financial year after interim profits surged 17% to £628m (€891m).

The UK’s largest supermarket chain reported strong growth at home and abroad with overall sales up 17% to £14.9bn (€21.1bn) in the six months to August 9.

In the UK alone, Tesco enjoyed a 14.2% sales rise to £12bn (€17bn), with the increase on a same-store basis ahead of market expectations at 6.2%. The recent warm weather had been among factors helping demand, the company said.

Chief executive Sir Terry Leahy added: “It has been an outstanding first half. Customers have told us what they want and we have been doing a better job for them right across the group.”

Overseas, where Tesco employs 75,000 of its 300,000 staff, the company said sales rose 30% to £3bn (€4.2bn) with operating profits up 66% at £98m (€139m).

The international portfolio includes Poland, Hungary, the Czech Republic and Thailand, with Tesco exploring opportunities in China and Turkey.

Despite its position as the UK’s largest supermarket chain, the company said there was still “a lot left to go for” in the UK, including through its goal of becoming as strong in non-food items as it is in groceries.

It will also look for further growth in the convenience store sector following the acquisition of 860 One Stop shops from T&S Stores last year.

Tesco is converting the outlets to Tesco Express stores at a rate of four a week, a process which is set to create around 1,400 new jobs.

In other areas of the business, the company said Tesco Personal Finance grew profits by 64% to £28m (€39m) with four million customers now holding accounts.

Online operation Tesco.com grew sales by 32% and took underlying profits to £11m (€15.6m) while the Cheshunt, Hertfordshire-based group confirmed it would soon move into offering mobile phone services.