Supermarket giant Tesco have highlighted a rise in profits, despite a "subdued demand" in the UK. Their rise in overall group sales rose 8.8% to £35.5bn, but like-for-like UK sales excluding VAT and petrol fell 0.5%.

The company said that their relatively "weak" sales in the UK were in part down to reduced demand for non-food items, and high petrol prices.

But despite the fall in like-for-like sales, trading profits in the UK rose by 4.5% to £1.3bn.

It's outside the UK where Tesco have performed best, even though around two-thirds of their sales are in the UK. Like-for-like sales in Europe grew by 1% and in Asia by 3.8%, while in the US sales grew by almost 12%.

Rival's Sanisbury's out-performed Tesco, reporting better like-for-like sales. Their sales rose by 1.9% in the first six months of the financial year, compared to Tesco's rise of 0.5%.

But analysts have said that Tesco will outperform Sainsbury's in the long term.

Richard Hunter at Hargreaves Lansdown said "Sainsbury's may have pipped Tesco at the post in terms of growing UK sales, but for overall prospects Tesco remains the darling of the sector."

Retailers will still have to struggle against rising prices and a reduced economy, according to analysts.

In an interview with Reuters news agency, the head of the British Retail Consortium, Stephen Robertson, said retailers were "finding life extremely difficult", and that underlying costs were being squeezed.

"I think we've probably got another 18 months of real challenge," Mr. Robertson said.