The boss of UK retail giant Tesco Plc today (30 September) said he believes there is "room for recovery" in non-food sales growth as the retail giant announced an increase in underlying first-half profit of 10.3%.

Chief executive Sir Terry Leahy admitted that the company's clothing sales had been affected by the poor weather during the UK summer, but said it had gained "a lot" of market share by outperforming many of its rivals.

Tesco's total group sales for the 26 weeks to 23 August were up 14.1% to GBP28.1bn (US$50.7bn), with underlying pre-tax profit up 10.3% to GBP1.45bn.

Group trading profits were up 9.4% to GBP1.37bn, while group operating profit rose 13.1% to GBP1.48bn.

The results were boosted by 26.8% growth in international sales, at actual exchange rates, to GBP8bn, with like-for-like sales rising 1%.

Meanwhile, UK sales were up 9.7% to GBP20.1bn, with like-for-like sales, excluding petrol, increasing 3.7%.

Group non-food sales increased 7.3% to GBP5.8bn, including GBP4.1bn for the UK and GBP1.7bn for international markets, where growth was strongest.

Describing the clothing sector as "difficult", Tesco nonetheless said that its Cherokee and Florence & Fred brands had "significantly" outperformed a falling market.

International clothing sales were up 18%, boosted by strong growth in central Europe.

Sir Terry said the slow-down in non-food growth had been "inevitable", adding: "You must eventually reach the bottom in terms of labour costs and factory input costs in Asia, and so you will see a gentle rise there."

But he was less certain that the slowdown would continue.

"It feels to me that we reached the sort of bottom when we saw the big explosion in food prices and fuel prices. As those ease off into the autumn, I think there is some room for recovery in the non-food business."

Responding to claims from Asda that it had overtaken Tesco in terms of clothing volumes in the UK, Sir Terry said: "Well, our measures of clothing are pretty encouraging relative to the market. We've gained a lot of share.

"I think like all retailers we were affected by the poor weather - it's very, very weather-sensitive.

"Interestingly, just coming out of the summer, there were a couple of weeks of more autumnal weather and clothing sales were very, very strong… It's hard to judge any clothing on the basis of the summer that we've just had."