Shares in Tesco rose 28.5p to close on 419.5p yesterday as the retail giant shrugged off the high street gloom to record a full-year pre-tax profit of £2.8bn.

The UK's number one supermarket also reported an 11.1% increase in group sales to £51.8bn and quashed rumours that its US c-store venture Fresh & Easy was underperforming - saying that sales were ahead of budget.

Tesco was well placed to weather any downturn in the economy, analysts said.

“Tesco's strong results should return the market to the reality that this company once again achieved double-digit sales and earnings growth and has started 2008 in a similar vein,” Matthew Truman, an analyst at Lehman Brothers, told The Times.

Mike Tattersall, an analyst at Cazenove, added: “Headline profits have come in ahead of our forecasts at every key operational level. The tone of the statement is very positive both on the reported results and on the outlook.”

Journalists were also impressed by the results: “Even if Tesco's non-food offering comes under pressure, it has greater flexibility than specialist retailers to tailor its range and more firepower than other supermarkets to adjust its food promotions to demand,” wrote Andrew Hill in the Financial Times.

Writing in the Independent, Jeremy Warner added: “It all sounds almost too good to be true. Yet Tesco has confounded the sceptics for so long that pretty soon we may have to learn to believe these glowing appraisals of the future.”

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