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Tesco PLC on Thursday said it expects to deliver profit at the upper end of previous guidance although quarterly sales fell short of expectations weighed by a surprise drop in sales at Booker. ‘Competition is as intense as ever,’ commented Tesco Chief Executive Ken Murphy. The Welwyn Garden City, England-based food retailer said like-for-like sales excluding VAT and fuel rose 2.4% in the six weeks to January 3 compared to a year ago. Like-for-like sales on the same basis were up 3.2% in the UK and 3.8% in the Republic of Ireland. Sales were down 2.1% at Booker and 0.8% higher in Central Europe. For the third quarter, which is the 13 weeks to November 22, Tesco said like-for-like sales excluding VAT and fuel for the group were up 3.1%, with 3.9% growth in the UK. Group sales were below company compiled consensus of 3.6%, with UK performance below 4.1% expectations. Third quarter LFL sales in the Republic of Ireland grew 5.0% on-year versus consensus of 3.9%, Booker LFL sales fell 0.9% versus consensus of for growth of 1.2%, and Central Europe LFL sales was 1.2% versus consensus of 2.3%. In response, shares in Tesco fell 4.8% to 431.10 pence each in London on Thursday. In the total 19 weeks to January 3, like-for-like sales excluding VAT and fuel were up 2.9% for the group and 3.7% in the UK. As a result of what the firm called ‘a strong Christmas performance’, Tesco now expects to deliver financial 2026 group adjusted operating profit at the upper end of its £2.9 billion to £3.1 billion guidance range issued in October. It continues to expect free cash flow within its medium-term guidance range of £1.4 billion to £1.8 billion. Tesco said it outperformed the market on both a value and volume basis, noting its 12-week market share was up 23 basis points to 28.7%, with four-week market share up 31 basis points to 29.4% in the UK. Online sales climbed 11% while home & clothing like-for-like sales up 2.1%. The grocer highlighted a standout performance in fresh food, with LFL sales up 6.6% reflecting ongoing investments in ‘value and quality’, while sales of its premium Finest range increased by 13.0%. ‘I am delighted with the strong Christmas we delivered for our customers. Our investments in value, quality and service drove further gains in customer satisfaction and strong growth in fresh food, contributing to our highest UK market share in over a decade,’ commented Chief Executive Ken Murphy. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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