Blue Square, the Israeli retailer, has seen higher sales and the revaluation of its real estate drive up first-quarter profits.

The company said today (29 May) that operating income rose 13.8% to NIS90.2m (US$27.8m) during the first three months of 2008.

Sales were up 7.5% to NIS1.8bn, thanks largely to store expansion. On a same-store basis, sales inched up 1.1%.

President and CEO Zeev Vurembrand pointed to the success of Blue Square’s Mega In Town banner and said the company would look to expand the chain.

“We will soon be opening our first supermarket targeting the Arab sector while also launching a variety of customer loyalty, financial services and other initiatives,” Vurembrand said.