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| Tesco reports fall in half-year profits | Tesco reports fall in half-year profits |
| (35 minutes later) | |
| The UK's biggest supermarket chain, Tesco, has reported its first fall in profits since 1994. | The UK's biggest supermarket chain, Tesco, has reported its first fall in profits since 1994. |
| Pre-tax profit for the six months to 25 August came in at £1.7bn, down 11.6% from the same period last year. | Pre-tax profit for the six months to 25 August came in at £1.7bn, down 11.6% from the same period last year. |
| The retailer is in the middle of a £1bn investment programme to improve its store in the UK, which was announced by chief executive Philip Clarke in April. | The retailer is in the middle of a £1bn investment programme to improve its store in the UK, which was announced by chief executive Philip Clarke in April. |
| He said in a statement that the economy "continues to present challenges all over the world". | He said in a statement that the economy "continues to present challenges all over the world". |
| UK like-for-like sales in the three months to 25 August, which exclude the effect of new stores, rose 0.1% excluding fuel, which was the first rise for seven quarters. | UK like-for-like sales in the three months to 25 August, which exclude the effect of new stores, rose 0.1% excluding fuel, which was the first rise for seven quarters. |
| Mr Clarke put that down to the investment programme, which has already put 8,000 additional staff in existing stores at a cost of £200m a year. | Mr Clarke put that down to the investment programme, which has already put 8,000 additional staff in existing stores at a cost of £200m a year. |
| He also said that the Everyday Value range was growing fast due to the pressure being felt by customers. | He also said that the Everyday Value range was growing fast due to the pressure being felt by customers. |
| "They tell us they're resigned that this is the new norm. They don't have great expectations that things are going to improve in the short term," he told BBC News. | "They tell us they're resigned that this is the new norm. They don't have great expectations that things are going to improve in the short term," he told BBC News. |
| "They're hit by fuel prices, they're hit by taxes, real incomes aren't growing so people are having to adjust and what we see is that they are starting to buy into supermarket brands more, they're starting to buy our Everyday Value range... [which] is up 10% like-for-like." | "They're hit by fuel prices, they're hit by taxes, real incomes aren't growing so people are having to adjust and what we see is that they are starting to buy into supermarket brands more, they're starting to buy our Everyday Value range... [which] is up 10% like-for-like." |
| Sainsbury's sales | Sainsbury's sales |
| The UK's number three supermarket chain, Sainsbury's, also updated investors on Wednesday. | The UK's number three supermarket chain, Sainsbury's, also updated investors on Wednesday. |
| Its like-for-like sales excluding fuel rose 1.9% in the three months to 29 September. | Its like-for-like sales excluding fuel rose 1.9% in the three months to 29 September. |
| "Our own label penetration is increasing at a faster rate than any of the major supermarkets; a testament to the investment we have made in the quality of our products," said chief executive Justin King. | "Our own label penetration is increasing at a faster rate than any of the major supermarkets; a testament to the investment we have made in the quality of our products," said chief executive Justin King. |
| He warned that "we expect the challenging economic backdrop to persist", but added that, "we are positioned to perform well coming into the important Christmas period". | He warned that "we expect the challenging economic backdrop to persist", but added that, "we are positioned to perform well coming into the important Christmas period". |
| Korea problems | |
| Outside the UK, Tesco also had some problems, with international profits down 17.1% to £378m in the first half. | |
| There were particular problems in South Korea, which is its biggest market in Asia, where new regulations have restricted opening hours for big retailers. | |
| Tesco said those regulations were likely to cut its profits by about £100m in the full year. | |
| Its stores now have to close for two Sundays a month and are only allowed to stay open from 0800 until midnight. Sunday is the biggest trading day in Korea. | |
| Tesco also said that conditions had been challenging in China, where consumer demand was not keeping up with the pace of new store openings. | |
| In Europe, the retailer said it had been hit by eurozone austerity measures as well as the weakening euro, which meant the value of its sales had fallen 6.8% in the half. |