Tesco sees new fall in profits

Underlying profits for the first half of its financial year were £354m, 55 per cent down on the same period last year, when it made £779m, reports The BBC.

Its pre-tax profit was £74m, compared with a loss of £19m for the same period a year ago.

UK like-for-like sales were down 1.1 per cent in the second quarter, an improvement from the first quarter’s fall of 1.5 per cent.

International sales were up 1 per cent.

In February, Tesco reported the worst results in its history, with a record statutory pre-tax loss of £6.4bn for the year to the end of February.

Chief executive Dave Lewis said: “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.”

Mr Lewis has been focusing on cutting prices and putting more staff in stores in an effort to attract customers back to Tesco.

Tesco has completed the sale of its Homeplus stores in South Korea, reducing its debt by £4.2bn, but it has decided to keep its Dunnhumby data business.

The supermarket is still under a criminal investigation by the Serious Fraud Office (SFO) after it admitted overstating its profits by £263m nearly a year ago.

In a BBC interview, Mr Lewis declined to comment on reports that the company was close to striking a deal with the SFO.

The results come a week after rival Sainsbury’s forecast better-than-expected full-year profits, but the big four supermarkets continue to be under pressure from discount retailers Aldi and Lidl.