Hertfordshire-based Tesco Sees Half-Year Profits Fall 55% To £354m

The group said the fall in like-for-like sales in the United Kingdom and Ireland improved from 1.5% in the first three months to 1% in the second quarter, but the group warned that price deflation was still hitting sales.

“Every important part of Tesco has been or is being transformed operationally, culturally or financially”, he said.

The company also announced that it would keep its consumer data business Dunnhumby, which runs the Clubcard scheme, abandoning plans to sell it off.

John Ibbotson, director of the retail consultancy Retail Vision, said: “A year into his tenure, Tesco’s embattled chief executive has lived up to his “Drastic Dave” nickname”. “We will stay focused on generating better returns from the assets we’ve got”.

On a conference call Lewis reiterated that he aspires to repeat last year’s so-called trading profit of 1.4 billion pounds this year. Worldwide sales meanwhile actually rose by one per cent. But a few City analysts say progress has been too slow.

“We have delivered an unprecedented level of change in our business over the last twelve months and it is working”.

It said that customers’ response so far has been encouraging, with an improving trend in both sales and volume throughout the half and an increase in market share for the first time since 2013.

Tesco has had to slash prices to try and entice customers back from German discount chains Aldi and Lidl after it recorded the worst results in its history in February.

But it said the market remained challenging and it stood ready to invest more if needed.

Tesco had additional exceptional losses a year ago of over £600m arising from its profit misreporting scandal, and restructuring charges.