Tesco beats forecasts with 1.4bn profits

TESCO chief executive Sir Terry Leahy yesterday said that the UK was &ldquo;past the low point&rdquo; of the slump as he unveiled bumper profits and sales.<br /><br />Britain&rsquo;s biggest retailer said that group sales had jumped 8.3 per cent to &pound;30.4bn during the 26 weeks to 29 August &ndash; meaning the giant supermarket chain was ringing over &pound;1bn in total sales through its tills each And pre-tax profits nudged up by 1.5 per cent to &pound;1,419m in the period.<br /><br />Leahy said that as the UK economy was improving shoppers were beginning to &ldquo;treat themselves&rdquo; again &ndash; with sales of its organic, &ldquo;Finest&rdquo; and ready meal ranges lifting. <br /><br />He predicted a &ldquo;slow and steady&rdquo; recovery for the UK but said Tesco did not rely on &ldquo;massive growth&rdquo; to boosts its earnings as it sold &ldquo;everyday essentials &ndash; not luxury goods&rdquo;.<br /><br />Tesco&rsquo;s profits have recently been hit by the group&rsquo;s introduction of lower-priced discount ranges. But Leahy argued the self-imposed price deflation had successfully stemmed the flow of cash-strapped shoppers to price conscious rivals like Asda, Lidl and Aldi.<br /><br />And Tesco said it was renaming its Personal Finance arm to Tesco Bank to reflect the group&rsquo;s long term objective of creating a &ldquo;full service retail bank&rdquo;. It will soon start selling current accounts in store. <br /><br />It recently spent &pound;950m buying back a 50 per cent stake in its finance arm from Royal Bank of Scotland and has tied up with insurer Fortis.<br /><br />&nbsp;But the group dismissed speculation it may acquire bailed out Northern Rock saying it had &ldquo;no plans to do so&rdquo;.<br /><br /><strong>FAST FACTS TESCO<br /></strong>&9679; Tesco currently has 30.9 per cent of the UKgrocery market and has 2,458 stores in the UK.<br /><br />&9679; Its recent acquisition of Korea&rsquo;s Homever stores will increase its footprint in Asia, but its Fresh&amp;Easy US chain is suffering in the slump.