The UK's biggest supermarket group, Tesco, has unveiled anther surge in profits and played down fears of a dip in British consumer spending.

These results show that we are delivering on our programme for long-term growth

Tesco chief executive Terry Leahy

The company said on Tuesday that pre-tax profits for the six months to August came in at �545m ($763m), 13.3% up on the same period one year earlier.

The figure was in line with market expectations, with most analysts forecasting profits growth of 12-14%.

Sales adjusted for new store openings grew by 3.9%, down from a growth rate of about 7% this time last year, while total sales climbed 10.6% on the year to �12.7bn.

In the City, Tesco shares rose slightly before falling 6.75p lower to 209.25p as investors digested news of the decline in the rate of underlying sales growth.

'Normal' spending

The decline reflects slower consumer spending in its main UK market, as well as downward price pressure due to intense retail sector competition.

But Tesco downplayed concerns over a full-blown slide in consumer spending, saying that sales are returning to a more' normal' level across the industry after posting strong growth in recent years.

"These results show that we are delivering on our programme for long-term growth," said Tesco chief executive Terry Leahy.

Tesco's latest set of results look set to comfortably maintain its lead over the rest of the British retail sector.

The chain controls an estimated 16% of the British grocery market, followed in declining order of size by J Sainsbury and Asda, part of the world's biggest retail group Wal-Mart.

Overseas jobs boost

The company's recent strong performance stems in part from succesful expansion into continental Europe and Asia, where the company has been racking up double-digit sales growth in recent months.

Tesco is now active in a total of nine countries, with international operations contributing �2.3bn in sales.

The supermarket said it planned to create 12,000 new jobs in its overseas division as part of continued expansion plans.

Tesco has also moved aggressively into non-food items, selling a wide range of consumer goods such as clothing, CDs, DVDs and videos.

Earlier this year, Tesco took over the air miles loyalty scheme from J Sainsbury, a move which it claims attracted over 60,000 new customers.