TESCO is expected to announce record profits this week of more than £2.2 billion as Britain’s supermarkets prepare for an inquiry by the Competition Commission.

An inquiry could be launched within days of the Tesco results. At least one big supermarket chain is preparing for an announcement as early as this week.

Sir Terry Leahy, chief executive of Tesco, is also expected to announce the creation of a £100m environmental fund on Tuesday. It will finance research and support the use of wind, solar and geothermal power in Tesco stores and distribution centres.

The retailer is also believed to be working on plans to build a store made entirely from recyclable materials and improve recycling in stores nationwide.

Stephen Tindale, an executive director of Greenpeace, welcomed the initiative. “Tesco has a massive environmental footprint but also has the potential to move to radically different ways of producing and using energy. The £100m — twice as much as Gordon Brown promised in the budget — could deliver a huge step forward for clean, decentralised energy.”

Alongside Tesco’s financial results on Tuesday, analysts and shareholders are also expecting Leahy to update investors on how he believes the retailer can realise value from its property portfolio. Despite the company’s continued success, in Britain and overseas, its shares have underperformed those of its rivals.

“The market is more interested in getting an update on property and the possible implications this may have on shareholder value,” said David McCarthy at Citigroup.

Andrew Fowler, a retail analyst at Merrill Lynch, believes that Tesco could raise the dividend or possibly announce plans for a share buyback.

Tesco is also due to update investors on current trading. Analysts expect the company to announce that like-for-like sales rose 5% over the last seven weeks.

Analysts also hope that Leahy will provide further details of the group’s plans to open a chain of convenience stores in America.

If, as expected, the Office of Fair Trading does ask the Competition Commission to look at the supermarkets, its inquiry could take at least 18 months. It will be a bonanza for competition lawyers, with the four largest supermarkets — Tesco, J Sainsbury, Asda and Wm Morrison — expected to pay separate legal advisers more than £25m.

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