Tesco has reported a big increase in profit for the first half of its financial year as shoppers switched from “premium retailers”.
Adjusted operating profit for the six months to August was up 13.5% to £1.48bn compared to the same period a year earlier, the UK’s biggest supermarket chain said on Wednesday.
Group sales, excluding VAT and fuel, grew by 8.9% to £30.75bn, with like-for-like sales at Tesco’s UK supermarkets up 8.7%.
Chief executive Ken Murphy said: “We know how challenging it is for many households across the country, as they continue to grapple with ongoing cost of living pressures. We are committed to doing everything we can to drive down food bills and Tesco is now consistently the cheapest full-line grocer.”
Murphy added that investments in value and quality have led to market share gains in store and online.
“We’re seeing the results at both ends of the basket, with strong growth in our Finest range as shoppers look to save by treating themselves at home, voting with their feet as they switch from premium retailers to Tesco.”
Food inflation fell across the six-month period and Tesco expects that trend to continue in the second half of the year.
The company has raised its profit guidance for the full year to a range of £2.6bn to £2.7bn.