The chain said pre-tax profits were up 17.4% to �628m ($1bn) for the six months to 9 August.

Like-for-like sales in the UK - which strip out the effect of new store openings - rose by 6.3%.

Chief executive Terry Leahy said the company's performance had been "outstanding".

Shares in Tesco had risen 10.25 pence, or 4.5%, to 238.75p by early afternoon on the London market.

Hilary Cook, director of investment strategy at Barclays Private Clients, said Tesco had "struck a very good balance between generating profits and cutting prices".

Sales surge

Analysts had been expecting a strong set of figures following this year's hot summer which boosted sales of drinks and food for barbecues.

Leahy: Non-food sales are increasing significant

Sales in the UK grew by 14.2% to �12bn, helped by last year's acquisition of convenience store chain T&S.

Tesco is converting many of the T&S stores to its Tesco Express format and said it planned to reformat 136 stores this year.

Tesco's internet service, Tesco.com, said sales grew by 32% generating underlying profits of �11m.

International sales grew 30% to �3bn. The firm now operates in 10 overseas markets across eastern Europe and Asia.

Wider range

Tesco said it was continuing its expansion into non-food areas, and that sales of its clothing ranges were up 37% by volume.

Its personal finance business now has four million accounts with half-year profits up 64% to �28m.

"We've been growing non-food very strongly, twice the rate of food, and it's becoming a significant part of our business," Mr Leahy said in an interview with the Reuters news agency.

Other supermarket chains are also expanding their non-food interests, with Sainsbury's announcing on Monday that it is going to start selling homeware and cookware items in its stores.

Items such as crockery, cutlery, childrens toys, books, DVDs and TVs are set to be in nearly 300 Sainsbury stores by Christmas.

Safeway battle

Tesco is one of the five parties bidding for the Safeway supermarket chain, but Mr Leahy said the business had not been distracted by the takeover battle.

Tesco's bid - along with those of Wal-Mart-owned Asda, Sainsbury and William Morrison - has been scrutinised by the Competition Commission.

A decision on which chains can bid for Safeway is expected shortly.