Tesco, the UK’s largest food retailer, said that underlying sales growth in the UK accelerated in the first quarter and that it had gained market share from competitors, but its full-year profit forecast remained unchanged.
Tesco reported on Thursday a 5.5% increase in comparable sales for the first quarter of the 2025-26 financial year, driven by growth in all regions: the UK, Ireland, the Booker division and Central Europe.
Total group sales excluding fuel and VAT were £16.38 billion for the 13 weeks ended 24 May. In the UK and Ireland, comparable sales rose 5.5% to £15.39 billion.
Sales in the UK alone reached £12.31 billion, up 5.7%. Sales in Ireland rose 7.2% to £772 million.
Booker, Tesco’s wholesale business, reported a 3.5% increase in sales to £2.31 billion. Within Booker, core food sales rose 7.3% due to seasonal factors and Easter trading, while core retail sales increased 5.4%. Sales in the Tobacco segment declined 9%. Booker’s total comparable growth was 2%.
Central Europe reported sales of £997 million, reflecting comparable growth of 5.8% at constant exchange rates. Food sales in the region rose 4.4%, with fresh food sales increasing 7.3%.
Tesco said it had made targeted investments in prices and mentioned the introduction of margin caps on selected food products in response to competitive pressure.
Tesco reported that UK food sales rose 5.9%, led by fresh food categories. Non-food sales increased, with growth in home and clothing categories. The company introduced more than 350 new own-brand products during the quarter, including Finest-branded products and a barbecue range.
Online sales in the UK
Online sales in the UK rose 11.5% thanks to capacity expansion and the launch of Tesco’s F&F clothing brand online in May.
The company reported that its share of the UK online grocery market was 37.1%, according to Kantar data for the 12 weeks ending 18 May. Its UK market share rose 44 basis points year-on-year to 28.0%, also according to Kantar.
Tesco said this was the 24th consecutive four-week period of market share growth. Brand perception in the UK increased by 65 basis points over the same period, according to YouGov BrandIndex.
In Ireland, Tesco recorded a 22 basis point increase in market share to 23.3%, according to Kantar. Food sales rose 5.8%, and the company said the volume growth was supported by investments in pricing and quality.
Fuel sales in the UK
Fuel sales in the UK fell 10.6% year-on-year to £1.47 billion. Total revenue in the UK, including fuel, rose 3.1% to £13.78 billion.
The company maintained its forecast published in April, with expected adjusted group operating profit between £2.7 billion and £3 billion and projected retail free cash flow between £1.4 billion and £1.8 billion.
Tesco said it had repurchased £448 million worth of ordinary shares since the launch of its £1.45 billion share buyback programme in April.
