Tesco posts £66.6bn sales as value push drives highest market share in decade

Key facts

• Sales excluding VAT and fuel rose 4.6% to £66.6bn on a 52-week comparable basis.
• Adjusted operating profit edged up 0.8% to £3.15bn.
• Free cashflow increased 11.8% to £1.96bn.
• Adjusted diluted earnings per share climbed 6% to 29.0p.
• UK market share rose to 28.5%, up 24 basis points year on year.
• Finest premium range sales grew 15% to £3bn.
• Online UK sales rose 11% to over £7bn; rapid delivery Whoosh grew 51% to over £400m.
• Tesco expects adjusted operating profit of £3.0bn–£3.3bn for 2026/27.

A value offensive pays off

higher full-year sales and cashflow after ramping up investment in lower prices and improved quality, a strategy that has propelled its UK market share to a level not seen in more than a decade. On a 52-week comparable basis, sales excluding VAT and fuel rose 4.6 per cent to £66.6bn, while adjusted operating profit edged up 0.8 per cent to £3.15bn. Free cashflow increased 11.8 per cent to £1.96bn, and adjusted diluted earnings per share climbed six per cent to 29.0p. The UK’s biggest grocer said its focus on ‘low prices, improved quality and better service’ had helped it reach its highest market share in more than a decade.

Everyday Low Prices and Clubcard drive loyalty

Tesco has tripled the number of products in its Everyday Low Prices scheme to 3,000, alongside more than 10,000 Clubcard Prices and over 600 Aldi Price Match lines. The moves are designed to retain price-sensitive shoppers amid a cost-of-living crisis. Chief executive Ken Murphy said: “We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever.” The company’s UK market share rose to 28.5 per cent, up 24 basis points year on year, while group like-for-like sales increased 3.5 per cent.

Premium lines and online growth show selective spending

Despite the value push, shoppers are still spending selectively on premium products. Finest sales rose 15 per cent to £3bn, indicating that consumers are willing to trade up on treats while economising on basics. Alex Pugh, investment writer at Freetrade, said Tesco’s results showed it was serving “a savvy consumer who wants to spend, but on their terms”. He added: “The fact Tesco is expanding Everyday Low Prices, Clubcard Prices and Aldi Price Match while also growing Finest sales 15 per cent to £3bn sums up contemporary British spending: thrift on the staples, selective on the extras.” Online remained a bright spot, with UK sales up 11 per cent to more than £7bn, while rapid delivery service Whoosh grew 51 per cent to more than £400m in sales.

Cautious outlook amid Middle East uncertainty

Tesco’s outlook struck a more cautious note. It said it expects adjusted operating profit of between £3.0bn and £3.3bn in 2026/27, reflecting heightened uncertainty around the consumer backdrop and wider economic conditions as a result of conflicts in the Middle East. The company has also appealed for supplier support on its ‘food first’ strategy, unveiled last week, promising to turn up the heat on rivals by investing in quality and innovation as well as price.

Operational highlights and store developments

Tesco operates more than 3,000 retail stores in Britain, spanning Extra hypermarkets, supermarkets and Express convenience stores. It also runs the market-leading Tesco Clubcard loyalty programme and a growing online business offering home delivery and click & collect. In recent weeks, the company has been in the news for a range of operational stories: a Tesco store in Fraserburgh, Scotland, was named the UK’s best ‘extremities’ store in a mystery shop; the chain plans to raise a car park to beat flooding in Sussex; and it is cutting 180 jobs within its head office. It also plans to give under-18s Clubcard access later this year.

A strategy that balances thrift and indulgence

Tesco’s results underscore a broader trend in British spending: consumers are thrifty on staples but willing to splurge on extras. The company’s dual focus on value and premium ranges appears to be paying off, capturing both ends of the market. However, the cautious profit forecast signals that headwinds remain. With geopolitical tensions and economic uncertainty persisting, Tesco’s ability to maintain its momentum will depend on how long it can keep prices low while managing cost pressures.

The bottom line

• Tesco’s sales rose 4.6% to £66.6bn, with market share hitting a decade-high 28.5%.
• The value push includes 3,000 Everyday Low Prices items, 10,000 Clubcard deals, and 600 Aldi Price Match lines.
• Premium Finest range grew 15% to £3bn, showing selective spending behavior.
• Online sales surged 11% to over £7bn; Whoosh rapid delivery jumped 51% to over £400m.
• Tesco forecasts 2026/27 operating profit of £3.0bn–£3.3bn, citing Middle East conflict uncertainty.
• The company is cutting 180 head office jobs and planning to extend Clubcard to under-18s.