Tesco has reported an 11th consecutive quarter of rising sales.

The UK’s biggest supermarket chain announced that pre-tax profits for the six months to 25 August were two percent higher than the same period in 2017.

Despite the growth in sales, shares in the group dropped 5.5 percent in early trading.

Bruno Monteyne, an analyst with investment bank Bernstein, said that overall profits had been “soft”.

The news comes following the opening to Tesco’s new discount store Jack’s, which has opened to rival budget stores Aldi and Lidl.

Tesco chief executive Dave Lewis said he was “really very happy so far” with the performance of the two new Jack’s stores.

“So far, so very very good,” he said. “The two stores are trading very well, consumer feedback is really very good.”

Two new Jack’s stores are due to open on Thursday in Liverpool.

Regarding Brexit, Lewis commented on the tough retail market conditions and contingency plans for when the UK will leave the EU.

“The biggest single challenge will be in a no-deal scenario, will be what happens with fresh food,” he said.

“It’s all about product flow [over borders]. The possibility of stockpiling fresh food is very, very limited.”

The supermarket is looking at stockpiling grocery products.

Elsewhere in supermarket news, Sainsbury’s (LON: SBRY) and Asda are hoping to take part in a merger, which will create a combined group bigger than Tesco.

Shares in the group (LON: TSCO) are currently trading 8.67 percent at 214,80 (1008GMT).