Tesco, which takes more than one in every ten pounds spent in British shops, said on Wednesday it made an operating profit of £1.77bn in the 26 weeks to 27 August on a 7.8 per cent rise in sales to £31.8bn, excluding VAT sales tax.
Analysts had forecast an operating profit of about £1.83bn and sales of £31.9bn.
The figures compare favourably with bigger international rivals Wal-Mart and Carrefour , as Tesco expands in fast-growing Asian markets like Thailand and reduces its losses in the United States.
However, Tesco said sales at British stores open over a year fell 0.7 per cent year-on-year in the second quarter, excluding fuel and adjusted for VAT, following a 0.4 per cent drop in the first.
Britons are suffering the biggest squeeze on disposable incomes for decades amid rising food and fuel prices, subdued wages growth and a government austerity drive.
Tesco, which makes about two thirds of its sales and profits in Britain, is suffering more than rival grocers because it sells a higher proportion of discretionary goods where shoppers are cutting back most.