TESCO'S domination of the supermarket sector has continued.

The grocery chain has reported a strong surge in half-year figures, with pre-tax profits rising 14 per cent to £481m in the 24 weeks to August 11, while overall sales were ahead 14.2 per cent, at £11.5bn.

Tesco, which broke the £1bn barrier for full-year pre-tax profits in April, announced this week it was making £100m worth of price cuts.

The group said the savings across 3,500 products meant its prices were now 12.5 per cent cheaper than five years ago.

The latest figures, which are in line with City expectations, show like-for-like sales in the UK strengthened seven per cent over the six-month period.

Operating profit in the UK was also 12.1 per cent higher, at £501m, although operating margins remained broadly flat at 5.5 per cent following recent price cuts.

Tesco said it opened 13 new stores during the period and added it would create another 20,000 jobs worldwide through further openings this year.

Among non-food items, Tesco said it had become a market leader for sales of health and beauty products, while sales of DVD sales were ahead 300 per cent.

Terry Leahy, chief executive, said: "These results underline the strength of our four-part strategy - a strong core UK business, non-food, retailing services and our international business."

Internationally, Tesco saw sales grow by 46 per cent to £1.7bn during the six months, with profits up 120 per cent at £33m. The company expects to open its first store in Malaysia later this year and was investigating the possibility of expanding into China and Japan.

Among other interests, Tesco's personal finance operation achieved a profit of £14m.

Tesco.com posted a 77 per cent rise in half-year sales to £146m, but recorded a loss of £3m because of the cost of launching new sites.

Overall, pre-tax profits were ahead 13.5 per cent at £471m, while the interim dividend was raised by 12.8 per cent to 1.67p.