Tesco has reported a 23.5 per cent drop in profits in the first half of the year.
While the supermarket chain saw profits fall 67 per cent in Europe to £55m, UK trading profits actually rose 1.5 per cent.
“The UK business is getting stronger and we are starting to see this coming through in the numbers, but this is not translating into better group numbers due to the challenges in central Europe. Our central European business has been disappointing with a greater-than-anticipated decline in profits,” said Tesco chief executive Phil Clarke.
The supermarket revealed that by reducing its electricals category, the profitability of Tesco Direct has improved despite lower sales.
While Tesco reports a drop in profits, rival Sainsbury’s has seen a two per cent rise in like-for-like sales during the second quarter of its financial year.