Sainsbury has posted a 10.7% jump in first half pre-tax profit and cited cost savings plus its store refurbishment programme for “this solid performance”.

For the 28 weeks to October12 group pre-tax profit rose to £342m from £309m last year and in line with City expectations.

Sales increased 1.4% to £9.74bn from £9.60bn.

In the UK Sainsbury’s saw like-for-like sales growth, excluding petrol sales, halved to 2.8% compared to 6% to 2001. The group blamed lower food inflation and the decision to terminate the Air Miles loyalty scheme contract to the decline in sales.

Sainsbury’s said its new Nectar loyalty card, run jointly with Barclaycard, Debenhams and BP,had signed up 11 million customers in the first two months.

Group chief executive Sir Peter Davis said that its recovery programme, started two years ago, had delivered £90m of cost savings and is on track to deliver £200m this year and £700m by March 2004.

Davis noted that group capital expenditure would be £1.2bn for the year.

In the US Shaw's posted an 8.8% rise in profit to $110m.