Fall in profits for Tesco

<p>Tesco has confirmed a drop in profits.</p>

Profits are down at UK supermarket chain Tesco, the firm has announced in its latest financial data released today (October 2nd).

UK like-for-like sales fell by 0.5 per cent and pre-tax profits were £1.39 billion, which represents a fall of 23.5 per cent.

Total UK sales were up by 1.5 per cent to £1.13 billion and the firm's chief executive, Philip Clarke, explained customers' spending power helps to explain the fall in profits.

"There is less pessimism around, but customers are still not seeing real disposable incomes improve," he told the BBC's Today Programme, adding: "They are, perhaps, feeling a little better about the future."

European profits were particularly badly hit and they fell by 67 per cent to £55 million.

The share price of Tesco has taken a hit in the early stages of trading this morning on the back of the profits news.

At 08:28 BST, stocks in the UK's largest supermarket chain were down 3.23 per cent for the day.

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