Tesco has started the 2025/26 financial year with firm momentum, reporting a 4.6% rise in like-for-like sales. This performance reflects growing customer confidence, a sharper focus on value and quality, and continued investment in both physical and digital channels. As a result, the retailer has further expanded its lead in the UK grocery market, with its share rising to approximately 28%—the highest it has been in nearly a decade.
Delivering Value and Innovation
The latest growth comes as Tesco intensifies its effort to offer a balance between affordability and quality. This includes maintaining everyday low prices on essential products, matching competitors on key items, and expanding its premium ranges. The “Finest” line in particular has seen double-digit growth, with hundreds of new or reformulated products introduced in the past year alone. This strategy is paying off, as customers continue to respond positively to the balance of innovation, flavour, and price.
Beyond pricing, Tesco has continued to improve in-store availability and enhance the shopping experience. Feedback from consumers indicates improvements in overall satisfaction, value perception, and brand reputation—factors that are directly contributing to rising footfall and basket sizes.
Online Sales Gaining Traction
Tesco’s digital operations are also gaining pace, with strong online growth recorded in the first months of the financial year. Particularly in Ireland, where store refurbishments and expanded service offerings are being matched by rising digital penetration. Rapid delivery services such as Whoosh continue to extend their reach, now covering over 1,500 locations across the UK. Tesco’s online platform is also expanding its third-party marketplace, offering customers more choice while leveraging the retailer’s logistical scale.
Ireland and Central Europe: Consistent Growth
In Ireland, Tesco continues to strengthen its presence through new store openings, modernised layouts, and a growing online customer base. Market share has edged higher, supported by fresh food initiatives and improved convenience formats.
Elsewhere in Central Europe, performance has remained stable with growth in key categories such as bakery, chilled, and produce. Enhanced in-store execution and a refreshed private label offer have helped Tesco maintain competitiveness in the face of local and discounter challenges.
Operational Strength and Colleague Investment
Internally, Tesco is also reaping the benefits of operational discipline. Efficiencies across the business have released significant cost savings, which are being reinvested into colleague pay, store standards, and digital innovation. The company recently announced another uplift in hourly wages for UK-based staff, reinforcing its position as a leading employer in the sector.
Team satisfaction levels remain high, with Tesco reporting an improvement in colleague engagement and customer service delivery. This internal alignment is proving to be a key advantage in a market that remains under pressure from inflation, labour shortages, and shifting consumer expectations.
Looking Ahead
With a clear strategy in place and customer loyalty remaining strong, Tesco is well-positioned for the remainder of the financial year. While external cost pressures—such as increased labour costs, packaging levies, and energy prices—continue to shape the trading environment, Tesco’s scale, agility, and data-driven approach give it an edge in navigating the challenges ahead.
The company has reaffirmed its full-year outlook, expecting steady profit margins and healthy cash flow, allowing for further investment in growth areas, including digital, own-brand innovation, and store network development.
Tesco’s strong start to the year reinforces its standing as the UK’s leading grocer—not simply by size, but by its ability to evolve with the customer and outmanoeuvre competitors. As 2025 progresses, Tesco appears determined not just to hold ground, but to set the pace for the industry.