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Profits plummet 55% at Tesco

Troubled supermarket Tesco has reported a 55% drop in profits to £354m for the first half of the year.

UK like-for-like sales were down by 1.1% and the group warned that trading conditions remained challenging.

International sales returned to growth for the first time in three years, rising by 1%.

Dave Lewis, Tesco chief executive said restructuring savings of £400m for the year were on track.  

“We have delivered an unprecedented level of change in our business over the last 12 months and it is working. The first-half results show sustained improvement across a broad range of key indicators.

“In the UK, we continue to improve all aspects of our offer for customers, resulting in volume growth, which is allowing us to create a virtuous circle of investment.

“Our transformation programme in Europe has accelerated growth and reduced operating expenses, and in Asia, we have gained market share in challenging economic conditions.”

On Tuesday (October 6) Tesco revealed that the new national living wage would cost it £500m by 2020, putting further pressure on profits. It also announced plans to speed up payments to its smallest suppliers.

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