Bumper profits for Tesco
Updated on 02 October 2007
Tesco has overcome a wet and windy summer to post bumper half-year profits of £1.32 billion.
Chief executive Sir Terry Leahy said the better-than-expected performance - 14 per cent ahead of last year - came despite the "challenges" of the poor summer weather.
Tesco's UK business, which has more than 1,500 stores, gained from early good weather before the rain set in, while tougher trading comparisons with last year's World Cup hit sales growth.
The performance over the six months to August 25 is worse than the 3.9 per cent first-half sales growth posted by Tesco in 2000 and 2002.
Sales growth across June, July and August fell to just 2.4 per cent although Tesco's price cutting saw this surge to 5 per cent during August.
Tesco, which has almost a third of the UK grocery market, saw overall domestic sales reach £18.3 billion, more than 5 per cent ahead of last year.
The group's organic products and Tesco Finest ranges enjoyed further strong growth as trading profits rose 8 per cent to £978 million.
It also continued its expansion into the non-food sector, where it reported sales growth of 9.9 per cent.
Clothing sales were subdued due to the weather, but DVDs and console games enjoyed a stronger second quarter with "very strong" increases also seen for white goods, books, DIY and furniture.
Sir Terry said: "Tesco non-food sales remained robust and again grew significantly faster than our core business."
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