Tesco has vowed to continue its price war with the rest of the sector after announcing record-breaking £1.07 billion profits. Chief executive Terry Leahy said its price battle would continue with the whole industry, not just Asda. "There won't be a let-up ­ we will continue to invest to reduce prices." The chain's profits leapt 12% with like-for-like growth up 4.8% in the year ending 24 February, on sales up 11.9% to £22.8bn. Leahy rejected claims from some industry quarters that the figures rubbed salt into the farmers' wounds during the foot and mouth crisis. He said: "I sympathise with farmers and we are working closely with them to maintain confidence in British food. The company has paid higher prices to buy British, and our suppliers are paying above the market price for the meat. And we've partly absorbed this to help the farmers." Leahy said Tesco was on track to operating 130 hypermarkets overseas by 2002. Deputy chairman David Reid said international sales had swelled 43% to £2.9bn, with Poland as the only grey spot where "breaking even is a good result at this early stage". He said it "recognised the consumer squeeze on disposable incomes and had adjusted our operating plans to reflect this". It still plans to open five more hypermarkets in Poland this year. Tesco will create 10,000 jobs here and overseas as part of continued expansion. Leahy promised to continue trying to grow non-food at twice the rate of food. He said it was on track to achieve £5bn of non-food sales by the end of 2002. The multiple has invested £40m in Tesco.com, now bringing in weekly sales of £6m. Leahy said it had gained more customers and bigger orders in the past year and predicted the service would continue to grow rapidly before calming down and then moving towards long-term growth. But he admitted: "I've no idea how big it will be ­ we just wanted to be the first to know." Tesco also claims to be the largest retailer of organic food in the world and Leahy said the chain's "mass appeal" had helped speed "remarkable volume growth". City analysts were unanimous in their praise, but one warned that it had to be careful not to become arrogant. He added: "Tesco still has to earn its spurs internationally and it could stumble there." - See Opinion, p18 {{NEWS }}