Tesco's profits rise by 11%

Retail giant Tesco has reported a 11% rise to £2.8bn in annual trading profit for the year to 23 February.

The strong trading results should silence some of the recent criticism about the supermarket's performance.

It follows the competition heating up between the big four retailers, Tesco, Asda, Sainsbury and Morrisons for a share of the dwindling household budgets squeezed by higher mortgage repayments and energy bills.

Tesco chief executive Terry Leahy said Tesco was responding to the toughening economic conditions by paying close attention to its research into consumer loyalty and targeting consumers with better promotions. "We always want to keep up the pressure up on price," he said.

Tesco has certainly done that with meat products. In February it sold its standard chickens in a promotion halving the price to £1.99. This month it has been advertising its standard bacon on TV at half price.

Tesco has more than 30% of the market in Britain, double that of its nearest rivals Asda and Sainsbury's.

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