Tesco has reported a fall in like-for-like sales in the UK as a result of “subdued demand”.
The supermarket reported a rise in half-year profits despite a fall in underlying sales in the UK.
Like-for-like UK sales excluding VAT and petrol fell 0.5 per cent but group sales rose 8.8 per cent to £35.5 billion.
Pre-tax profit for the 26 weeks to 27 August was £1.9bn, up 12.1 per cent on a year earlier.
Despite the fall in like-for-like sales, trading profits in the UK rose by 4.5 per cent to £1.3bn.
The company highlighted "excellent growth" in Europe and Asia but makes about two-thirds of its sales and profits in the UK.
Tesco said it is taking steps to “sharpen execution and competitiveness for customers” including investing in price promotions, ranges, service and store environments.
Tesco is now Europe's largest private sector employer with half a million staff around the world.
Chief executive Philip Clarke said: “'I am pleased that excellent growth in Europe and Asia, as well as an encouraging performance in the United States, have supported further progress in the first half, despite the challenges of subdued demand in the UK, particularly in non-food categories.”
Clarke also said the future of the supermarket’s performance with its Fresh & Easy stores in the US is brighter. He said: “The implementation of our plan to break-even in the US in 2012/13 is showing promising early results.”
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