TESCO PLANS to increase its dominant retail presence in the North this year by opening its first Extra hypermarket in Belfast, which will offer a wide range of non-food goods.

Located at Knocknagoney in east Belfast, where the supermarket giant has a store, Tesco said the new development and other investment projects will create more than 350 jobs in Northern Ireland this year.

The British group employs more than 8,510 people in the North, making it the largest private sector employer in Northern Ireland. It sources some £350 million (€443 million) of produce from Northern Ireland suppliers each year.

Tesco has nearly 40 stores in the North but over the last 12 months has run into significant problems trying to secure planning permission for additional stores. Last week, it was revealed a new Tesco superstore earmarked for Derry will be scaled down by more than 26,000sq ft after planners rejected plans for the site.

The group also lost a long campaign at the start of summer to develop its largest store on the island, in Banbridge.

The 130,000sq ft store at the Bridgewater Park complex would have been Tesco's first Extra store in the North but planners rejected it.

The retailer yesterday reported a 10 per cent rise in underlying pretax profits for the six months to August 23rd, meeting analysts' forecasts despite weak markets.

Terry Leahy, Tesco chief executive, said although shoppers were "hard pressed", analysts were exaggerating by saying retail conditions were the worst for 30 years.

Tesco, the world's third-largest retailer behind France's Carrefour and US group Wal-Mart, said profit before tax and one-off items was £1.45 billion (€1.82 billion) on sales up 14 per cent to £25.6 billion.

In the Republic, Tesco, with 111 stores and about 13,500 staff, is the country's largest retailer with 26 per cent of the grocery market.

Tesco did not provide a detailed breakdown for its Irish division. Tesco Ireland's sales and profit data are included under the group's international business arm, which yesterday reported a 27 per cent increase in sales.

A spokesman for Tesco Ireland said the retail environment had "changed immeasurably over the last six months" as consumers become more price- and value-conscious. - ( Additional reporting Reuters)