Tesco is “well-placed” for global recovery

Tesco, the UK’s largest supermarket group, has posted “solid results” for the six months to 19 August claiming that its strategy of low prices and loyalty initiatives is working.

The group reported pre-tax profits up 1.5% on last year to  £1.42bn. Group sales were up 8.3% to £30.4bn with UK like for like sales up 2.7%.

Tesco chief executive Terry Leahy says: “Our focus on the customer, the consistency of our strategy, an efficient business model, strong local management teams, and a spirit of innovation and knowledge-sharing, have enabled us to improve the shopping trip for customers – by investing in consistent value they can trust and in rewarding their loyalty through Clubcard – whilst at the same time delivering a robust financial performance.”

The retailer is seeing growth in its Finest food range, which it says shows that customers’ optimism is returning.

Tesco non-food business has proved to be “resilient”, up 4.9% during the period adding it is expected to emerge from the downturn in a strong position.

Sales of clothing in the UK grew by 6.6% in total boosted by a back-to-school campaign while the online business achieved an 11% sales increase.

The group also announced it is to rename its financial division Tesco Personal Finance as Tesco Bank as part of a plan to create a full-service retail bank.

Rival, Sainsbury’s is expected to post a 5.6% rise in sales tomorrow (6 October).

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