Major Kent employer Tesco has reported a rise in profits of more than 10 per cent as shoppers seek cheaper ways to feed and clothe families.

The store chain, which has 28 stores in the county, announced profit before tax was up 10.3 per cent in the six months to August 23 at £1.453 billion. It said there had been a 13.8 per cent rise in total sales to £25.6 billion.

Terry Leahy, Tesco chief executive, said: “Tesco is at its best in tough markets, responding to the changing needs of customers, and that’s why we have been able to make good progress this year, despite facing into powerful economic headwinds and carrying planned start-up losses in the US.

"Our business is strong, broadly-based, increasingly international and, I believe, well-placed not just to cope with the challenges which lie ahead but also to grasp the growth opportunities open to us by continuing to invest in our strategy.”

The positive news came as a US 700 billion dollar financial plan failed to gain backing in Congress, sending European share indexes diving.

In early trading following the collapse of the US bail-out plan, the UK's FTSE 100 fell three per cent before rising 0.6 per cent.