Tesco suffers fall in group profits

The UK’s biggest grocer recorded a 12 per cent decline in group pre-tax profits to £1.7bn in the six months to August 25 - its first profits fall in nearly 20 years.

There were tentative signs that the retailer’s £1bn turnaround plan in the UK was starting to have some impact as like-for-like sales excluding VAT and petrol grew 0.1 per cent in the final three months of the period, compared with a decline of 1.5 per cent in the first quarter.

But as UK sales improved, like-for-like sales in Asia and Europe fell into the red in the second quarter as shopping hour restrictions hit trade in South Korea and the eurozone crisis impacted its performance on the continent.

Meanwhile, rival Sainsburys reported a 1.7 per cent rise in like-for-like sales, excluding fuel but including VAT, in the first half of its financial year to September 29.