CLUBCARD BOOSTS TESCO SALES RALLY.

Byline: NEIL HODGSON 

TESCO made pounds 1.4bn profit in the first half of its financial year on sales of more than pounds 1bn a week.

The supermarket giant headed by Liverpool-born Sir Terry Leahy saw pre-tax profits rise 1.5% in the six months to August 29. Total sales were pounds 30.4bn.

And while like-for-like sales rose 2.7% in the UK, slower than the growth achieved by its rivals, the firm said recent moves to enhance its Clubcard customer reward strategy were paying off, adding it had seen a "significant improvement" in its performance compared with its competitors.

Tesco''s underlying profit before tax, which strips out one-off items, was pounds 1.6b, a rise of 8.6% and slightly ahead of market expectations.

The UK's largest supermarket chain has seen its dominant market share position come under attack from rivals in recent months.

In the first half its UK sales, including VAT, rose 2.8% to pounds 20.7bn, but this was much slower than the 10% growth seen last year as weaker inflation and the economic downturn impacted on the group's figures. Tesco said the performance was "solid" adding it was "despite competitive market conditions and the backdrop of a weak economy."

The chain opened 87 stores in the first half, including its 1,000th Express outlet, which helped the business continue to grow total sales.

Meanwhile, Tesco said it was making "good progress" with Fresh & Easy, its troubled attempt to enter the US market. It said US trading losses were pounds 85m due to "prolonged weakness" in the economies of California, Nevada and Arizona.