Tesco has forecast full-year profits at the upper end of its guidance after reporting a 3.2% rise in underlying UK sales over the key Christmas trading period, as the supermarket continued to gain market share from rivals.
The retailer now expects adjusted operating profit to reach the top of its previously announced range of £2.9 billion to £3.1 billion, having made £3.13 billion in 2024/25. While its results were slightly below analysts’ consensus, Tesco said its performance demonstrated continued outperformance of the wider UK retail market during a period of high inflation, subdued consumer confidence, and weakening employment.
Under CEO Ken Murphy, who has led the group since 2020, Tesco has focused on improving product quality, increasing innovation, and enhancing customer service. Murphy highlighted the importance of maintaining value for customers, particularly during challenging economic conditions.
In Ireland, Tesco reported like-for-like sales growth of 5% over the 13 weeks to November, with Christmas sales up 3.8% and market share rising to 24%, marking the fourth consecutive year of gains. Irish food sales increased by 5.2%, with strong growth in fresh food.
Geoff Byrne, CEO of Tesco Ireland, said the quarter reflected “ongoing positive momentum across the business” and praised the supermarket’s fresh food offering. “Quality and innovation were recognised through a record 84 Blas na hÉireann awards, including 26 gold medals,” Byrne said.
The retailer also opened five new stores in Ireland during the period, including large outlets in Howth and Drogheda, creating 220 new jobs. Its same-day delivery service, Whoosh, was expanded to 18 new locations, including Cork and Galway, while its broader online grocery home shopping service continued to see consistent year-on-year growth.
Industry data published earlier this week showed Tesco ended 2025 with a UK grocery market share of 28.7%, up 20 basis points from the previous year and its highest level since March 2015. UK like-for-like sales rose 3.9% in the third quarter to November 22, after 4.6% growth in the second quarter, slowing to 3.2% in the six weeks to January 3. Tesco’s shares have risen 22% over the past year.
Murphy attributed growth to a combination of value, quality, and service, highlighting initiatives such as matching Aldi prices on more than 650 items and the Clubcard loyalty scheme. On Monday, Tesco announced it would freeze prices on more than 3,000 branded products, including Weetabix, Heinz baked beans, and PG Tips.
Commenting on consumer sentiment, Murphy said there is a clear divide between households with strong budgets and those counting every penny. He pointed to resilient UK employment as a key factor in supporting spending, noting that “despite comments to the contrary, people enjoyed Christmas, they spent.”
