Tesco first-half profits slump 24 per cent

Profits at supermarket giant Tesco have plunged by almost a quarter in the past six months following underlying sales declines in the UK and every one of its overseas markets, including Ireland.

The world’s third largest retailer posted flat sales 18 months into a £1 billion recovery plan for its UK market.

In Ireland, sales fell from €1.39 billion in the first half of 2012 to €1.34 billion in the six months to the end of June this year, which Tesco attributed to increased austerity measures.

Tesco said consumers in Ireland "have faced further pressures on household finances" which led to a 3.7 per cent reduction in like-for-like sales in the first half.

Online sales
Tesco said its online sales have continued to grow in Ireland, with almost 40,000 customers downloading its new price news app.

It added that Tesco Mobile continued to grow market share in Ireland, and that it recently broke the 200,000 customer mark.

Tesco group chief executive Philip Clarke said the "challenging retail environment in Europe" had continued to affect the performance and profitability of the retailer's businesses.

The group's operating profit in Europe overall slid 68 per cent to £55 million. Mr Clarke said the grocer was committed to fixing its international business despite the 24.5 per cent overall pretax profit fall from £1.8 billion to £1.39 billion.

Market share
Tesco saw its dominance of the Irish grocery market slip further in the 12 weeks to September 15th, with its market share now at 26.8 per cent, compared to a 28.7 per cent share this time last year, according to Kantar Worldpanel.

The research company said this week that the growth of German discounters Lidl and Aldi, combined with an improved performance from Dunnes, had put pressure on Tesco.