Tesco profit rises despite slowing sales growth
Tesco delivered strong first-half results today despite slowing sales growth in its British market and said its international ambitions were on target.
Group pre-tax profits rose 13.3 per cent to £545 million sterling on sales up 10.6 per cent to £12.7 billion.
Tesco Ireland recorded sales growth of 8.4 per cent to €786 million for the half-year to August 10th. Tesco Ireland added that trading in Ireland is currently in line with the company's expectations.
Tesco said sales growth in Britain had slowed to 3.9 per cent as price reductions cut the figure from a more robust 5.5 per cent in volume terms.
Consumer spending, which remained robust last year, has finally slowed down along with income and employment growth.
In Ireland, Tesco said it is continuing to see good sales and profit growth, with planning permissions coming through for new stores. The group is planning to open its first 60,000-square-foot hypermarket in Clarehall, Co Dublin, next year.
To counteract the tougher environment at home, Tesco is trying to boost more profitable non-food sales and aim for faster growth abroad.
Tesco's shares closed at 216p yesterday, having fallen 15 per cent so far this year.