Strong international growth helped Tesco overcome "subdued" demand and weak growth in the UK as it unveiled a 12.5% rise in half-year profits to £1.6 billion on Tuesday.
Higher fuel costs saw customers spend more at the pump and less in store, leading to like-for-like sales growth, excluding petrol and VAT, of 0.3% in the UK in the six months to August 28. This was made up of 0.1% growth in the first quarter and 0.4% growth in the second.
As the UK's largest supermarket, Tesco is struggling to make further gains at home in a fiercely competitive market, but international growth has been strong, lifting the group's overall performance, with sales up 8.3% to £32.9 billion.
Tesco now operates in countries including South Korea, Thailand, China, Japan, the United States and across central Europe, and has 20 million Clubcard holders outside the UK.
International like-for-like sales were up 2% to £10 billion, driven by a particularly strong performance in Asia, where trading profit was up 30% to £228 million.
Tesco said South Korea's Homeplus stores delivered an "outstanding performance" with 3.2% like-for-like sales growth, while sales in Tesco Lotus in Thailand were also "excellent".
Its US business Fresh & Easy is still loss-making, down £95 million in the period, and it was forced to close 13 stores.
But it did show 10% growth in like-for-like sales and the group expects to see Fresh & Easy breaking even by the end of 2012-13 financial year. It also unveiled plans to bring the chain up to 400 stores in California within two years, up from its current 168 outlets.
Finance director Lawrie McIlwee said UK sales, about two thirds of group revenues, had been modest because "the economy is pretty stagnant" although there were "signs of a recovery".
Looking ahead, Mr McIlwee said "the lapping effect" of inflation was decreasing and customers remained loyal.
