Sainsbury's half-year profits and sales rise

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The UK's third-biggest supermarket group, Sainsbury's, has reported higher sales and profits for the six months to October.

The chain said underlying profit before tax rose by 8.1% to £332m.

Sainsbury's, which has almost 900 stores across the UK and employs 150,000 people, said its share of the market had risen to 16.2%, from 15.9%.

Like-for-like sales, which strip out the effect of store openings and closures, rose by 2%.

A number of major retailers have recently remarked on the effect on their business - and inflation - of high commodity prices.

Sainbury's chief executive, Justin King, said his business was managing to absorb these costs.

"There are some pressures out there but at the moment they are not flowing through that strongly to prices," he said.

But, he warned, other economic pressures were likely to affect trading.

VAT is set to rise from 17.5% to 20% from the beginning of January, something which does not affect most food sales.

Sales of items such as homewares and clothing, most of which do carry VAT, are rising at three times the rate of food.

"As we enter the second half, we expect the economic environment to remain challenging," Mr King said.

The company's statement said Sainsbury's was now the UK's 10th largest clothing retailer.

Sainsbury's Bank is also increasing customer numbers, which rose by 5%.

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