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Tesco profits climb to £1.4bn

Tesco has reported a 1.5% rise in group first-half pre-tax profits to £1.4bn, boosted by a 6.6% growth in clothing sales.

For the 26 weeks ending August 29, group sales, including VAT, grew 8.3% to £30.4bn and Tesco chief executive Sir Terry Leahy said that he believes the UK economy is through its “low point”. However, he added that the recovery will be “slow and steady”.

In the UK, like-for-like sales excluding petrol were up 2.7%.

Clothing sales in the UK grew by 6.6% in total and the retailer said that like-for-like growth was “positive”, helped by a back-to-school boost.

Last week Tesco launched its online clothing shop which it hopes will open up its fashion offer to customers who are not close to its larger stores.

Tesco said that in addition to established Tesco labels – such as Cherokee and F&F – the retailer will offer some Tesco lines exclusively online, plus “a number of other brands”.

The Tesco statement added: “The online range will offer customers a wider choice overall with more of a focus on fashionable, higher-value lines and will make our clothing more accessible to customers who do not live near to one of our larger stores.”

At its international business Tesco said that sales in its Asian markets grew 26.9% to £4.3bn with a growth in Europe of 0.9% to £4.7bn.

Leahy said: “Tesco’s core strengths are even more important as we tackle successfully the challenges of recession. 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.”

Readers' comments (1)

  • Interesting that Tesco is launching a Couture range for F&F. They are trialling the range at £100 plus which is a massive leap on the prices they sell items at currently and takes them way out of that supermarket value fashion category.
    Can Tesco really make this price point work?

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