Tesco Reports Huge Drop In Group Profits
Tesco has reported a 23.5% drop in group pre-tax profits to £1.39bn in the six months to August 24 amid difficult times in Europe and Asia.
Sainsbury's continued to pile on the pressure as it reported like-for-like sales excluding petrol up 2% in its second quarter.
The UK market has witnessed a surge in competition with the likes of Aldi, Lidl and Waitrose challenging the other major players - Morrisons, Tesco's, Sainsbury's and Asda.
Tesco suffered a 71% tumble in European trading profits to £55m and admitted the hit was worse than expected after conditions suffered in countries such as Ireland, Turkey and Poland.
Profits also fell sharply across Asia, down 12.4% to £314m, excluding China.
Tesco admitted the overseas woes would offset some of the benefit of its UK profits' improvement over the full year.
Chief executive Philip Clarke has spent £1bn overhauling the firm's stores to halt the decline in UK sales.
The move succeeded in the last half year, Tesco said, with sales measured as flat against the same period in 2012.
The supermarket chain announced the investment in its UK stores after being accused of taking its eye off the ball at home, focusing instead on growing its business abroad.
It recently pulled out of the US and has confirmed it is forming a partnership with China Resources to become the second-biggest player in the market there.
Tesco, which has 134 stores in China, is to hold a 20% stake in the venture having struggled so far to get to grips with the demands of the Chinese consumer.
The deal will allow Tesco's boss to devote more time to the battle to retain its leading market share of over 30% in Britain