Tesco, Britain’s largest retailer, has reported a 13% rise in underlying profits to £2.55bn.

The group’s full-year sales rose by 10.96% to £46.6bn, with its 1500 UK stores recording sales of £35.6bn.

The retailer holds a 31.3% share in the UK grocery sector, with £1 in every £3 spent on groceries now spent in Tesco.

In its preliminary results, the company said it has continued to grow its business over the past year, opening 2m square feet of sales area in the UK.

A further 2.1m square feet is planned to open later in 2007.

It has also continued its international expansion, creating 8.2m square feet of store space in countries including Malaysia, France and Hungary.

Plans were also “on track” to open stores in the United States, the supermarket said.

International sales had increased by about 18%, but the group’s core business remained in the UK, where like-for-like sales increased by 5.6%.

Terry Leahy, Tesco’s chief executive, said the supermarket’s Price Check survey and better on-shelf availability of products had helped increase customer numbers and spend per visit.

The supermarket had also responded to changing customer demand by making “significant changes” to its ranges, Mr Leahy said.

Its Organic range, which saw sales increase by 40%, has been expanded, while more than 2000 premium lines have been introduced.

The company said it had made “long-term commitments” on environmental issues, including new initiatives on packaging, regeneration and milk pricing.

The supermarket increased the price it pays to UK dairy farmers to about 22p/litre last month.