Tesco reports sharp drop in profits

Tesco, the UK's biggest supermarket chain, has reported a drop in profits of 23.5% in the first half of its financial year.

The FTSE 100-listed giant blamed the challenging retail environment in Europe, where sales fell 67% to £55m. Pre-tax profits in the six months to 24 August came in at £1.39bn, with total UK sales rising 1.5% to £1.13bn. Chief executive Philip Clarke said the firm was making progress and was strengthening its UK business. Tesco's results came as the firm announced a joint venture with China Resource Enterprises (CRE). The UK firm will combine its Tesco China business, which includes 134 Chinese stores, with the 2,986 stores held by CRE's Vanguard business. Tesco will have a 20...