Tesco, a British multinational grocery and general merchandise retailer, has reported fall in profits by 6% to £3.3bn in the year ended 22 February 2014, making it the second consecutive year with decreased profits.

Profits at the UK chain also fell 3.6% to £2.2bn during the year.

The overall group sales increased by 0.3% from £70,712m to £70,894m during the period, whereas the sales in UK were up by 0.1% to £48,177m.

During the period, Tesco updated nearly 300 UK stores, which resulted in increase of sales from 3% to 5%.

Tesco CEO, Philip Clarke, said they are transforming Tesco through a relentless focus on providing the most compelling offer for their customers.

"Our results today reflect the challenges we face in a trading environment which is changing more rapidly than ever before," Clarke added.

"Having strengthened the foundations of our business in the UK, we are now accelerating our growth in new channels and investing in sharper prices, improved quality, stronger ranges and better service."

The company noted that it had already embarked on various initiatives such as a substantial investment in price, launch of Clubcard Fuel Save, re-launch of general merchandise ranges across the business, and transformation of Extra stores to create more compelling destinations.