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Tesco posts 28.3% profits slump Tesco posts 28.3% profits slump
(35 minutes later)
Britain's biggest supermarket Tesco has revealed half-year profits dropped by more than a quarter. Britain's biggest supermarket Tesco has revealed half-year profits dropped by more than a quarter, as it still struggles to grow market share amid the bitter industry price war.
The group posted a 28.3 per cent fall in bottom-line pre-tax profits to £71 million for the six months to August 26 after being hit amid the sector's fierce price war. The supermarket price war has come at the expense of profits with Tesco revealing a group pre-tax profit of £71 million down 28.3 per cent on the same period last year.
The company also confirmed its pensions deficits has jumped by £3.3 billion to £5.9 billion " due to lower bond yields". The company also confirmed its pensions deficits has jumped by £3.3 billion to £5.9 billion "due to lower bond yields".
Despite the drop, Tesco's group like-for-like sales were up 1 per cent and in the UK they grew by 0.6 per cent, the company said. Tesco is still recovering from an accounting scandal as well as reporting a record loss last year.
Dave Lewis, chief executive, describes the results as "further strong progress" as the retailer rebuilds profitability "in a sustainable way". Last month, three former Tesco executives have denied charges in relation to the £326 million accounting scandal at the supermarket.
Despite the drop, Tesco's group like-for-like sales were up 1 per cent  in the half-year to August 27 and in the UK they grew by 0.6 per cent, the company said.
Dave Lewis, Tesco chief executive, said a plan to slash costs by £1.5 billion over the next three years to invest in its customer offering would help get profitability back on track.
Lewis described the results as "further strong progress" as the retailer rebuilds profitability "in a sustainable way".
“Whilst the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilizing the business and positioning us well for the future,” Lewis  said in the statement.“Whilst the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilizing the business and positioning us well for the future,” Lewis  said in the statement.
More follows Himanshu Pal, Vice President at Kantar Retail, said another period of improved like-for-like sales for Tesco has vindicated some of the structural changes Dave Lewis has made.
However he warned that Tesco continues to lose shopping trips to German discounters Aldi and Lidl.
“The recent disclosure around its pension deficit is likely to accentuate the focus on cash management fuelling further speculations around divestments of international markets in Southeast Asia and Central Europe,” he said.
Tesco also sparked controversy with its fresh “farm food” range, which has proved popular with shoppers even though the products are named after farms that do not exist.
The National Farmers Union (NFU) formally complained to Trading Standards over the use of fake farm branding by supermarkets on some food products. 
It singled out Tesco and its seven made-up farm brands, which launched earlier this year.