The growth was driven by a mix of strong performance in the UK core operations and increasing sales of non-food items as well as a good performance for the international business, said Tescos.

The supermarket chain, Britain's biggest grocer, saw its profits shoot up by 14% to over £1bn in its last financial year.

In Britain, Tesco's total sales were up 7.4% in the twelve weeks to 18 May, while same store sales were up 4.5% on a year ago, "in line with our plan".

Price cuts

The improved sales reflected continuing growth in sales volumes helped by discounting, said Tesco.

Tescos spent £280m on price campaigns during its last financial year and has also increased sales of non-food goods, particularly in the health and beauty and home entertainment sectors.

This has helped to boost profits as non-food items are more profitable than food.

Terry Leahy has overseen an international expansion

"International sales were up 32% in the first quarter (of the current year) in line with our plans," the firm said.

"All countries have contributed to this growth and we opened our first store in Malaysia."

Overseas growth

The grocer plans to open over 3.5 million square feet of store space this year.

International expansion plans mean the firm should have as much space overseas as in the UK by the end of 2003.

Tesco made pre-tax profits of £1.2bn for the last financial year and had 16.7% of the UK food market.