London  - Britain's leading supermarket chain Tesco provided a rare piece of good business news Tuesday by reporting a rise in half-yearly profits despite the tough retail environment.

Tesco said group profits up to the end of August rose by 11.3 per cent to 1.43 billion pounds (2.64 billion dollars), compared with the same period last year.

The increase was driven by robust international sales, Tesco said. The group has over the past few years set up stores in eastern Europe, Asia, China, and even the US.

In Britain, surveys have shown that the credit crunch is making customers turn away from "upmarket" retail chains to beat rising food prices.

Chief executive Terry Leahy said Tesco was "at its best in tough markets" and could respond to the changing needs of customers.

"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," he said. (dpa)