Retailer Tesco spent a total of £15 million on re-fitting stores in Ireland under its price-reduction programme.
Announcing its first-half results this morning, Tesco, which is the world's third largest retailer, said net income totalled £1.03 billion for the six months ended August 29th, compared with £1.01 billion a year earlier.
The supermarket group, which runs over 4,300 shops in 14 countries including Ireland, said it made profit before tax and one-off items of £1.57 billion pounds on a 9.3 per cent rise in sales to £27.8 billion pounds.
Sales in Tesco's key British market -- around two-thirds of the total -- rose 3.1 per cent for stores open at least a year, excluding fuel and VAT sales tax, in the second quarter. That was down from 4.3 per cent in the first quarter,
Tesco said that the price of 12,500 products in Ireland were reduced by an average of 22 per cent following the introduction of its price-cutting programme earlier this year as a response to the recession and a rise in cross-border shopping.
Suppliers have complained that the amount of space allocated to Irish brands has fallen significantly due to its price reduction programme.
The company said today that Irish customers had responded enthusiastically to the price-cutting plan with "significant uplifts in volumes, offsetting much of the impact of lower prices."
"These changes, combined with a substantial cost reduction programme, have enabled Tesco Ireland to deliver a steady financial performance despite the economic headwinds and significant self-imposed price deflation," the retailer said.
Tesco does not break out figures for Ireland but an internal business plan obtained by The Irish Timesearlier this year showed that the Irish division makes more than 9 per cent profit, well above normal retail margins in the US and at least 50 per cent more than elsewhere in the retailing giant's operations.
Additional reporting: Reuters
