Tesco’s pre-tax profits in the six months to 24 August were £1.39bn, with UK trading profit up 1.5% to £1.13bn.
UK like-for-like sales – which strip out the impact of new stores – fell by 0.5%.
Tesco’s rival Sainsbury’s reported a 2% rise in like-for-like sales during the second quarter of its financial year.
Tesco said it had seen a challenging retail environment in Europe, where profits fell 67% to £55m.
The supermarket giant recently got out of the US and confirmed today it was folding its 134 stores in China into a partnership with China Resources to become the second-biggest player in the market there.
‘Customer perceptions are improving’
Tesco chief executive Philip Clarke said: “In April, we set out our approach for growth and returns for the group, including a number of appropriate and realistic objectives for the years ahead and we have started the year on track, despite a continued difficult economic environment for consumers.
“This is notwithstanding our planned work on general merchandise, which has held back sales in the UK, and a small but discernible impact on frozen and chilled convenience food sales due to the customer response to equine DNA being detected in four products.
“Importantly to the objectives we have set out for sustainable and disciplined growth, customer perceptions are improving across all aspects of the shopping trip in the UK, driven by continued progress on our plans to ‘Build a Better Tesco’ and our market-leading multichannel offer.”
Elsewhere, Sainsbury’s online grocery sales rose by more than 15% in its second quarter, while convenience store sales rose 20%.
The supermarket group, whose market share stands at 16.6%, said its sales growth had been boosted by its “Brand Match” pricing initiative and growth in own-brand products.
Apples and pears
Sainsbury’s chief executive Justin King said: “We have delivered strong sales over the quarter, continuing to outperform the market in what remains a tough retail environment. We are the only major supermarket to be growing market share. This comes during a quarter in which we also lapped some of our strongest performance during the Paralympic Games last year.
“Our own-brand offer continues to grow at over twice the rate of branded goods, with Taste the Difference growing particularly strongly and by Sainsbury’s performing well following its re-launch.
“We recently announced that all our fresh pork is now sourced from British farmers, just as our fresh chicken has been for over 10 years. We also sold over 200 million British apples and pears over the year, making us the number one retailer of home grown fruits for the fifth year running.”
