Tesco has raised its profit guidance after the supermarket group continued to gain market share from its rivals.
UK market share up rose seven basis points year-on-year to 28.4% and has now gained share for 28 consecutive four-week periods.
Group sales reached £33 billion, a 5.1% increase at constant rates, producing a 1.6% rise in adjusted operating profit to £1.674bn.
UK online sales were up 11.4%, and sales at rapid delivery service Tesco Whoosh increased by 59%. The board declared a generous 12.9% rise in the interim dividend to 4.80p.
The company now expects adjusted operating profit for the year to be between £2.9bn and £3.1bn and continues to expect free cash flow within the medium-term guidance range of £1.4bn to £1.8bn.
Since 10 April the company has bought back £891m worth of ordinary shares.
Ken Murphy, chief executive, said: “I am pleased with our first half performance, which builds on already strong momentum. Our market share gains in the UK are a particular highlight and reflect the decisive action we took at the start of the year to further invest in value, quality and service.
“The extension of our savings programme is helping offset new operating cost inflation, including increased National Insurance and other regulatory costs. Sales have grown across all our businesses, with customer satisfaction scores improving once again
“The steps we have taken to keep prices down for customers have improved our price position relative to the market.
“Our summer ranges also benefited from over 470 new products and we continued to deliver market-leading availability. The opening of our new semi-automated distribution centre in Aylesford will further support our core fresh food offer.”
Mr Murphy said the company is continuing to invest in technology to drive more personalised engagement through Clubcard and the online business “is going from strength-to-strength”, enhanced by the recent launch of F&F online and continued growth in Whoosh.
“Competitive intensity remains high, and with continued pressure on household budgets, we remain committed to ensuring customers get the best possible value by shopping at Tesco.”
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