Tesco rules with £1.6bn profit

TESCO will underline its position as Britain's biggest retailer this week with blockbuster profits boosted by strong sales at home and even faster growth overseas.

Tesco, under chief executive Sir Terry Leahy, is expected to deliver record profits of about £1.66bn on soaring sales, helped by the weakness of some rivals such as Sainsbury.

Some analysts have forecast an even higher figure, with broker Citigroup Smith Barney suggesting it could deliver £1.73bn.

The profits will be for the 53 weeks to the middle of February, compared with £1.4bn in the previous 52 weeks.

Sales are likely to be up about 20% with the engine for growth being overseas turnover. This is expected to be ahead 30%, reflecting Tesco's successful expansion in central Europe and Asia.

Like-for-like sales growth in Tesco's home market is likely to be close to the 7.5% the company reported for the seven weeks to 3 January.

It has about 27% of the marketplace - a long way ahead of the 16% of nearest rival Asda, owned by US giant Wal-Mart.

Tesco has signalled it will not be left behind in the rush to slash prices among supermarket groups. This week, it plans to chop a further £70m from the cost of a range of products.