Tesco has today (5 October) reported mixed first-half results, with a drop in UK like-for-like sales but international growth boosting profits.

The retailer said its UK like-for-like sales, excluding fuel and VAT, dipped 0.5% in the six months to 27 August. Sales were down 0.9% in the second quarter.

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Chief executive Philip Clarke pointed to “subdued demand in the UK, particularly in non-food categories”. However, he said Tesco was making “substantial changes” to its UK business to “sharpen execution and competitiveness for customers”.

Two weeks ago, Tesco unveiled a revamp of its promotional strategy in the UK that it claimed would lead to price cuts worth GBP500m.

Tesco has operations in 11 markets outside the UK, excluding Japan, where it plans to sell its stores. Its group sales, including VAT, increased 8.8% to GBP35.5bn. At constant exchange rates, sales were up 8.2% including petrol and by 6.7% without fuel sales.

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Tesco’s international sales rose 2.7% thanks to growth in Asia, Europe and the US. Sales in Asia were up 11.8%, increased 7.8% in Europe and jumped 32% in the US. Like-for-like sales increased in all regions.

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The retailer said its net profit rose 16.3% to GBP1.38bn, while its operating profit climbed 5.9% to GBP1.94bn.

Trading profit from Tesco’s operations in Asia and in Europe increase and losses from its Fresh & Easy business in the US narrowed.

Clarke acknowledged the “challenges” in the UK but said “excellent growth in Europe and Asia, as well as an encouraging peformance in the United States” had “supported further growth in the first half”.