Tesco's share price jumped nine per cent in early morning trading after it posted an increase in UK sales in its interim results.
The company also confirmed its pension deficit has jumped by £3.2bn to £5.9bn "due to lower bond yields".
Tesco's like-for-like sales in the UK were up 0.6 per cent in the first half, with like-for-like sales for the group growing one per cent.
But profit before tax was down 28.3 per cent to £71m.
Sales volumes and transactions in the UK were up 2.1 per cent and 1.6 per cent respectively.
International like-for-like sales were up 2.6 per cent.
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The company's shares were up 12 per cent in mid-morning trading.
Why it's interesting
Sainsbury's reported recently that its transaction volumes increased - but its like-for-like sales took a hit, demonstrating that the company has been hurt in the supermarket price war.
Although chief executive Dave Lewis said prices at the retailer were down six per cent on a year ago, the company's like-for-like sales were positive, and transactions were up. On the back of its sales performance, the retailer is now hoping to boost its operating margins.
Punchy stuff from Tesco: "Sharing our ambition to deliver 3.5-4.0% Group operating margin by 2019/20"— Nick Bubb (@NickBubb1) October 5, 2016
Tesco's sales success comes at a difficult time for the company. Shareholders announced recently that they will sue over its accounting scandal two years ago, and the retailer is also fretting over its growing pension deficit.
But, the company was adamant today that it had rebuilt trust with its customers, saying "brand health [has] returned to highest level in more than four years."
What Tesco said
Lewis said: "We are more competitive across our offer. Prices are more than six per cent lower than two years ago, availability and service have never been better and our range is more compelling.
"Our new fresh food brands are performing ahead of expectations, improving our value proposition and further removing reasons for customers to shop elsewhere.
"While the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilising the business and positioning us well for the future."