LONDON (AP) — Tesco PLC, the world's third largest retailer, reported solid growth in quarterly sales yesterday with its international businesses making a strong contribution to the increase.

Tesco, which ranks behind US Wal-Mart Stores Inc. and France's Carrefour SA, said same store sales, excluding fuel, rose 4.3 percent in the 13 weeks ending May 30, up from 3.7 percent in the previous quarter.

Group sales rose 9.7 percent, including fuel, with strong growth in international markets boosted by new stores, currency moves and the benefits of an acquisition in South Korea.

International sales rose 20.1 percent by actual exchange rates — 11.4 percent at constant exchange rates — led by a 43.8-percent gain in Asia. Sales in its fledgling U.S. venture rose 174 percent.

In its domestic UK market, where Tesco makes 70 percent of its revenue, sales were lower than the growth reported by other supermarket chains. While Tesco captures almost one in every three pounds spent in a British supermarket, rivals like Wal-Mart's Asda, J Sainsbury PLC and WM Morrison PLC have been gaining market share in recent years.

But the company said it was slowly making ground, driven partly by its recent relaunch of its so-called "Clubcard" programme, which offers members double the value of money-off vouchers on some product ranges.

Tesco said that more than one million customers have joined the club so far.

Laurie McIlwee, group finance director, said there has been a general pickup in consumer confidence, a further boost for economic recovery hopes.

"It's a bit premature to say things are improving, but the fact that nonfood sales have started to grow and sales of our Finest range are up are good signs," he said.

The company is also pushing further into nontraditional areas, opening up six new instore banking and insurance centers.

Tesco shares rose two percent to 362.9 pence ($5.98) on the London Stock Exchange.

Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, said Tesco has not had the recognition it deserves despite outperforming the wider FTSE 100 index over the past year — its shares fell nine percent compared to a fall in the index of 25 percent.

"The headlines have tended to centre on Tesco's loss of market share, as opposed to the progress it is making," he said. "There has been a strong response to the relaunch of the Clubcard scheme, whilst the accompanying management statement was unusually upbeat given the current environment."