Tesco has admitted its Finest and Organics ranges have stopped growing, as shopper patterns change in the wake of the economic downturn.

Announcing a resilient first-half performance this week, chief executive Sir Terry Leahy said customers still wanted to buy Organics and Finest ranges, “but they don’t feel they can with the economic pressures”.

Leahy admitted that Tesco had lost “a few” customers to retailers with a strong price image. “The price-sensitive customers have not gone away, but some of the new customers have superficial impressions of prices,” he said.

Last month’s launch of the Discounter range had been received well, he said, and in a speech to the Liverpool Summit yesterday, Leahy said Tesco would adapt to the changed climate.

“I want Tesco to be a business for all economic seasons. When customers change, so do we. If customers want new products, new formats, and services, we don’t sit on our hands, suck our teeth and say ‘That’s a bit difficult’. We say: ‘How can we deliver it?’.”

With the Discounter range, “customers don’t have to shop anywhere else”, said Leahy.

The range has been extended to around 1,200 products, which Leahy said “is about the same number of products as Aldi or Lidl”. He added: “Tesco is the biggest discounter but it is sat within a much bigger offering.”

Leahy explained while special weekly offers in non-food run in central Europe, there are less in the UK as it already has a comprehensive non-food range. However, he said: “We may have to promote ranges more and have to make sure there is something new in non-food each week.”

Tesco revealed group pre-tax profit up 11.3 per cent to£1.44 billion in its first half. Core UK sales were up 6.9 per cent and UK non-food sales were up 4 per cent. International sales were up 26.8 per cent and losses in its fledgling Fresh & Easy US business totalled£60 million.

Tesco also said it would start to offer current accounts and mortgages under its Tesco Personal Finance division. Tesco chief executive of retailing services Andrew Higginson said current accounts could be about a year away and mortgages will happen “in due course”. He said: “The opportunities in banking are bigger now than when we first announced the deal [with Royal Bank of Scotland].”


Tesco interims at a glance

Group sales up
14.1%


Group pre-tax profit up
11.3%


UK like-for-likes up
3.7%


UK non-food sales up
4%


Online sales up
20.5%

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