Tesco has reported a pick-up in underlying sales growth in its first quarter and won market share from rivals, saying improvements in value, product quality and service had chimed with consumers.
The group, whose share of Britain’s grocery market has grown this year to 28%, a level not seen since 2016, said today its UK like-for-like sales rose 5.1% in the 13 weeks to May 24, having been up 4.3% in the previous quarter.
Its Irish sales rose by 5.5% to £772m and it said it continued to see growth in market share to reach 23.3% – which marked 40 consecutive four-week periods of share gains.
Tesco said its Irish food sales rose by 5.8%, with volume growth supported by continued investment in its fresh proposition. Its Irish fresh food range received 10 Monde Selection awards, it added.
The retailer said it saw growth across all channels in Ireland, led by online with sales up 19.8% on the back of the launch of same-day Click & Collect and home delivery last year.
Geoff Byrne, CEO Tesco Ireland, said the company maintained strong momentum in the market resulting in additional growth once again this quarter.
“Our award-winning own label products continue to gain in popularity, while our partnerships with local Irish suppliers ensure customers have access to the very best products on the market,” Mr Byrne said.
“Our commitment to deliver genuine value through Clubcard Prices and Aldi Price Match is assuring customers that they need go no further in unlocking affordability,” he said.
“Online shopping remains a strong growth area for Tesco Ireland, while the launch of our innovative on-demand rapid delivery service Whoosh has been very well received in Dublin since its launch in March, with average delivery values similar to those of in-store basket shops,” he noted.
Tesco said today that its group sales were £16.4 billion, up 4.6% on a like-for-like basis.
“Our continued commitment to delivering great value, quality and service for our customers has contributed to like-for-like sales growth across all parts of the Group,” CEO Ken Murphy said.
But he cautioned that the market “remains intensely competitive”.
Tesco said it still expected to report adjusted operating profit of between £2.7 billion and £3 billion in the year ending February 2026, down from the £3.13 billion achieved in 2024/25.
The group said in April it expected profit to fall in its 2025/26 year as it set aside cash to deal with a step up in the “competitive intensity” of the UK grocery market.
This marked a reference to a pledge of sustained price cuts from Asda, Britain’s third biggest supermarket group, which has been losing market share.
Most analysts think Tesco’s strategy of matching the prices of discounter Aldi on hundreds of key items, together with heavy promotion of its Clubcard loyalty scheme, which provides lower prices for members, is working well.
Tesco is also becoming increasingly digital, stepping up personalised engagement with customers and developing growth avenues such as its online Marketplace platform and retail media.
Shares in Tesco are up 27% over the last year.
Tesco’s update bucked wider industry data published earlier this week showing British consumer spending on non-food items lost momentum in May as households’ confidence in their personal finances fell.
