Tesco takes a broad outlook after sales rise in the east

The Cheshunt-based group now generates 31 per cent of sales and 22 per cent of profits from international operations, compared with 10 per cent and five per cent respectively 10 years ago.

In South Korea, which is Tesco's biggest market outside the UK, like-for-like sales growth in the nine weeks to October 31 accelerated to 6.7 per cent, compared with six per cent in the previous quarter and 0.6 per cent in the period prior to that.

Sales from stores open more than a year in China were up 8.3 per cent in the nine weeks after rising 9.3 per cent in the previous quarter.

Tesco disclosed the latest trading figures on the first day of a three-day visit to Asia it is hosting for retail analysts.

In a presentation led by Asia and Europe director Philip Clarke, who will replace Sir Terry Leahy as chief executive in March, Tesco described its international arm as an "increasingly important engine for growth".

The company said it stood to benefit from the region's economic recovery in the short term and from the maturity of its assets over the long term.

Like-for-like sales in Asia and Europe dipped 6.7 per cent at the height of the global recession but rallied 1.8 per cent in the first half of this financial year as Tesco offsets challenging trading conditions in its UK market.

Tesco's Korean venture, which trades as Homeplus, has grown in the space of 11 years from two stores to a business with annual sales of 4.5bn and profits of 287m.

It is the second largest retailer in the country behind E-Mart and currently has 118 hypermarkets and 245 superstores.

In Malaysia, where Tesco has 35 stores and a market share of just under 10 per cent, like-for-like sales returned to growth in the current quarter, while Tesco Lotus in Thailand saw sales rise 3.4 per cent after a 4.8 per cent gain in the second quarter.

Japan saw a 5.7 per cent drop in sales, in line with the previous quarter, as the company continues to face a difficult trading environment.

Meanwhile, at Tesco's 10-store operation in India, which is branded as Star Bazaar in a joint venture with franchise partner Trent, like-for-like sales rose 18.3 per cent in the nine weeks to October 31.

Last month, Tesco said it planned to open 6.9 million square feet of net new space in its international operations in 2010-11, compared with 4.8m in 2009-10. Asia is expected to see a large slice of the expansion.

Tesco also has operations in Ireland, Poland, Hungary, Slovakia, the Czech Republic, Turkey and the west coast of the US.

Earlier this month, Prime Minister David Cameron paid a visit to a Tesco store in Beijing as part of a visit to promote trade links with China.