Tesco has posted a 15.8% jump in H1 adjusted operating profit to £1.6bn as the supermarket chain said a focus on value had helped it negotiate the cost of living crisis.

Sales in Tesco’s first half also grew 4% to £31.5bn, ignoring fuel and exchange rates, despite its UK like-for-like sales growth slowing in the second quarter.

Tesco’s chief executive, Ken Murphy, said the company is in “good shape” going into the Christmas period, as the group also forecast that it now expects to post around a £2.9bn retail adjusted operating – up from previous guidance of £2.8bn.

“We’ve been working really hard to offer our customers the best possible value, quality, and service and they are shopping more at Tesco as a result,” Murphy said.

“We have lowered prices on thousands of lines, launched or improved over 860 products in partnership with our suppliers and growers, and our customer satisfaction scores continue to improve across a broad range of measures.

“We are in good shape, with volume growth delivering strong financial performance.”

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, highlighted that easing inflationary pressures have seen annual food inflation slow from 2.3% in July to just 2% in August, the lowest reading in nearly three years.

“Tesco has continued to invest in keeping prices low in its value range to help fend off competition from the likes of Aldi and Lidl,” Chiekrie added.

“At the other end of the spectrum, the Finest range is helping Tesco poach customers off more premium supermarkets. Both of these actions have left Tesco on a high at the half-year mark, with the low prices meaning that Tesco’s been the cheapest full-line grocer for nearly two years, which is luring more price-sensitive customers in the door.

“Growth is being led by more customers taking items off the shelves which is more than offsetting the lower goods price growth.”

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