Mixed results for supermarkets

Supermarket giant Tesco has reported a 12% drop in group pre-tax profits to £1.7 billion in the six months to August 25. However Sainsbury's has reported strong sales for the second quarter of the year, with total sales up 4.3 per cent.

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He told ITV News' Political Editor,Tom Bradby: "The first thing David Cameron's got to do is get a grip on the Department of Transport and his ministers. This should never have happened."

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Sainsbury's boss on the supermarket chain's success

Sainsbury's chief executive Justin King has spoken about the supermarket chain's strong sales in the second quarter of the year.

He told ITV News' Economics Editor, RichardEdgar, that the results were due to "sticking to doing the great thingsthat we've been doing for customers in the long term.

"Giving them fantastic own-label products, offers on brands and fantastic service in our stores. Doing all of those a bit better, and better than our competitors."

Sainsbury's boss on 'outperforming the market'

In a statement, Sainsbury's chief executive Justin King said:

This has been a unique and special summer, during which we have delivered another quarter of good sales, outperforming the market in what remains a challenging retail environment. Our total sales are up 4.3 per cent, and like-for-like sales up 1.9 per cent.

We expect the challenging economic backdrop to persist, but by helping our customers to Live Well For Less through competitive pricing, targeted promotions, quality own label products, and outstanding customer service, we are positioned to perform well coming into the important Christmas period."

– Sainsbury's chief executive Justin King

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Tesco profits: The headlines

A breakdown of Tesco's half-year profits in the six months to August 25.

  • Group sales up 1.4% to £36bn.
  • Statutory profit before tax down (11.6)% to £1.7bn.
  • Group trading profit of £1.6bn, down (10.5)% – UK down (12.4)% to £1.1bn; International down (17.1)% to £0.4bn; Tesco Bank up 114% to £94m.

Tesco's boss: Economy 'continues to present challenges all over the world'

Tesco's supermarket has recorded a 12% drop in group pre-tax profits to £1.7 billion in the six months to August 25.

In a statement, Tesco's chief executive Philip Clarke said that the economy "continues to present challenges all over the world".

In April, I set out our plans to 'Build a Better Tesco' in the UK. We have been hard at work and I am encouraged by our customers' initial responses to the changes we have made - but there is much more to be done.

The external environment continues to present challenges all over the world.

Whilst our businesses in Asia and Europe have continued to do a great job for customers, our financial performance there reflects the tough economic backdrop and particularly the regulatory changes in South Korea.

That we have gained or held market share in the majority of markets is a testimony to the skill of our teams across the Group.

– Tesco's chief executive Philip Clarke

Tesco's profits fall for the first time in nearly 20 years

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

Tesco's profits have fallen for the first time in nearly 20 years Credit: Press Association

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

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