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LONDON: Britain’s largest retailer Tesco on Wednesday said half-year net profit soared on slashed costs, and forecast a further slowdown in food price inflation.

Profit after tax soared to £929 million ($1.1 billion) in the six months to late August, the supermarket giant said in a statement.

That compared with £252 million a year earlier when Tesco’s performance was skewed by a large impairment charge.

The company reduced costs by £290 million in the first half and aims to slash them by £600 million over the full year.

Revenue advanced five percent to £34.1 billion in the first half, aided by price cutbacks as shoppers sought deals to save cash in a cost-of-living crisis.

London stocks open lower as commodity stocks drag, Tesco up on forecast lift

Tesco said food price inflation fell across the first half – and it expects this to continue for the rest of the year.

Shoppers remain cost-conscious, however, as overall UK annual inflation remains stubbornly high despite slowing to an 18-month low of 6.7 percent in August.

“We know how challenging it is for many households across the country, as they continue to grapple with ongoing cost of living pressures,” Tesco chief executive Ken Murphy said in the earnings release.

“We are committed to doing everything we can to drive down food bills.”

The group’s share price rallied 2.7 percent to 266.60 pence in morning deals on London’s benchmark FTSE 100 index, which fell overall.

“Tesco’s interim results are strong, reflecting growth and financial resilience amid the period’s economic backdrop,” noted Neil Shah, director of research at Edison Group.

“While encouraging trends have begun developing, such as reduced food inflation and stable interest rates, the looming cost-of-living crisis is a concern as we head into winter.”

The Bank of England last month left its key interest unchanged, snapping 14 straight hikes following the slowdown to UK inflation.

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