The first word of Tesco’s half-year earnings statement was, appropriately, “solid”. The problem is that investors have long come to expect something more than solid from the world’s third-biggest retailer. Tesco’s lacklustre UK sales growth is concerning when competitors J Sainsbury (expected to report buoyant figures on Wednesday) and Wm Morrison have accelerated like-for-like growth through the recession. The question is whether this is a temporary weakness and Tesco will rebound, or whether – having grabbed one-third of the UK grocery market and a 10th of non-food – its best growth days are over.

For now, evidence still points to the former. Tesco responded more aggressively than competitors to last year’s threat from fast-expanding “deep” discounters such as Germany’s Aldi. Its “discount brands at Tesco” initiative introduced price deflation into its figures while competitors still had price inflation and encouraged its shoppers to trade down. The strategy appears to have achieved its aim. Deep discounters’ market share gains have ground to a halt, and with the anniversary of discount brands’ launch now passed, Tesco says its UK like-for-like sales growth has “converged with the industry”. Profit growth was also tempered by higher interest costs after Tesco acquired Korea’s Homever chain for £958m and bought out Royal Bank of Scotland’s 50 per cent share in their financial services joint venture for £950m last year.