Tesco’s interim results for the first half of its 2025/26 financial year show that the UK’s largest supermarket chain has made significant market share gains in H1 – boosting its market share by 77 basis points to 28.4%. Its closest competitor is Sainsbury’s, with a market share of approximately 15.1%.
In a statement focusing on the company’s commitment to quality, convenience and affordability, Chief Executive Ken Murphy said the market gains were a “particular highlight” that “reflect the steps we’ve taken to keep prices down, enhance product ranges, and deliver excellent service.”
Despite a slight dip in statutory operating profit and profit before tax, Tesco’s underlying performance remains strong. Group sales (excluding VAT and fuel) rose by 5.1% to £33.1 billion, and adjusted operating profit edged up 1.5% to £1.67 billion. The retailer continues to generate healthy cash flow and has increased its dividend, signalling confidence in its long-term strategy.
The strong momentum for Tesco comes against a backdrop of rising costs and intense competition. With approximately 4,270 stores in the UK, the company has benefitted from its scale and relationships with suppliers that have allowed it to price-match other supermarkets including Asda, despite the latter introducing aggressive price rollbacks earlier this year. In contrast to Tesco’s results – and despite the rollbacks – Asda has now recorded 18 consecutive months of negative sales, according to reporting by Forbes. Budget supermarkets, too, are struggling with the challenge of juggling low prices with rising commodity and labour costs.
Digital transformation driving growth
Digital transformation is a key pillar of Tesco’s growth strategy. Online sales rose 11.4% year-on-year, with Tesco’s online market share increasing by 112 basis points. “We are leveraging technology to drive more personalised engagement through Clubcard and deeper retail media reach across channels and suppliers. Our online business is going from strength-to-strength, enhanced by the recent launch of F&F online and continued growth in Whoosh, our rapid delivery service,” Murphy said.
Murphy acknowledged the competitive intensity in the grocery sector but reaffirmed Tesco’s commitment to delivering value. “We remain focused on creating sustainable value for all our stakeholders,” he said. “Our colleagues are central to everything we do, and I’d like to thank them for their role in delivering for our customers.”
As Tesco continues to invest in its core strengths and future capabilities, the retailer appears well-positioned to navigate economic headwinds and maintain its leadership in the UK grocery market.
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