TESCO yesterday posted record profits for a British retailer of £3bn, despite the economic downturn.

The supermarket chain also said it had rung up sales of £1bn a week.

The retailer posted sales of £54.3bn in the 12 months to February 28, while its underlying pre-tax profits set another milestone – up 8.8 per cent to £3.13bn.

But the growth in profits was far lower than the 11.8 per cent seen the previous year after what has been a tough time for Tesco amid stiff competition and a consumer spending slump.

The profits haul – believed to be the biggest for a British retailer – came after UK likefor- like sales grew three per cent over the year, with growth in the fourth quarter of 2.7 per cent.

However, Tesco has lagged behind rivals such as Morrisons and Sainsbury’s – which saw full-year sales rise 7.9 per cent and 4.5 per cent respectively – as hard-up shoppers have switched in search of the best value.

But more recent figures reveal a slight improvement in trading, with UK same store sales up 3.4 per cent, excluding petrol, in the six weeks since its year-end in February.

Tesco said the weak pound had been pushing up prices as it hit import costs and cautioned there was likely to be further impact over the year ahead.

It has sought to cut prices where possible to help cashstrapped consumers and confirmed it has hedging in place for the next six months to effectively insure against currency movements.

Sir Terry Leahy, chief executive of Tesco, said: “At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions”

The Tesco share price gained 16.2p to 348.3p at the close last night.