Aeon Co., the nation's No. 2 retailer, said Thursday its group net profit for the fiscal first half dropped 6.6 percent as the cool summer and tax hikes hurt supermarket sales.

Its group revenue for the six months that ended Aug. 20 was up 6.8 percent to 1.59 trillion yen, but its net profit slid to 18.42 billion yen, from 19.72 billion yen a year ago.

The company said poor sales of seasonal merchandise and fierce competition in the food sector cut its profit despite the increase in revenue.

"It's the most disappointing result in the history of Aeon," said President Motoya Okada.

Aeon's supermarkets include the Jusco and Maxvalu chains. It said sales at supermarkets open at least a year dropped 2.4 percent from a year earlier.

Okada attributed the dismal performance to the company's failure to forecast factors that dampened consumer sentiment since around the spring, such as the increases in medical bills and alcohol and tobacco taxes.

The company said it plans to bolster profitability in the second half by introducing new clothing items and by further cutting costs via information technology advances.

For the full year through February, the firm expects a group net profit of 47 billion yen on revenue of 3.3 trillion yen.

The Aeon group runs 930 general merchandise stores and supermarkets as well as specialty stores and Ministop convenience stores.