Supermarket group Tesco has today raised its full-year profit forecast, saying it benefited from an unusually hot summer and won market share from rivals.
Tesco said it now expected full year 2025/26 adjusted operating profit of between £2.9 billion and £3.1 billion, up from its previous guidance of between £2.7 billion and £3 billion.
Tesco made £3.13 billion in 2024/25.
UK like-for-like sales in the first half were up 4.9%, having been up 5.1% in the first quarter. Its sales in Ireland rose by 4.8%
"Competitive intensity remains elevated," Tesco said.
"However, in the first half, a better-than-expected customer response to our actions and the benefit of an extended period of good weather have helped offset the cost of our investments," it added.
Tesco had said in April it expected profit to fall in its 2025/26 year as it set aside cash to deal with a pledge of sustained price cuts from Asda, the number three player, which has been losing market share.
However, no price war has materialised and Tesco's shares have risen 17% so far this year.
Industry data published by market researcher Worldpanel last month showed Tesco winning more market share than any other UK grocer.
Its Irish market share was up 11 basis points at 23.7%, which it said consolidated three years of consistent market share gains.
CEO Ken Murphy said those gains "reflect the decisive action we took at the start of the year to further invest in value, quality and service."
Analysts say Tesco's strategy of matching the prices of discounter Aldi on over 600 items, together with heavy promotion of its Clubcard loyalty scheme, which provides lower prices for members, is driving growth.
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.
Its first half adjusted operating profit rose 1.5% to £1.67 billion.
Meanwhile, the chief executive of Tesco urged the UK government to deliver a "pro-growth and pro-jobs" budget on November 26.
"What we'd love to see from the next budget is a budget that's pro-growth and pro-jobs, which, as a result, will help customers with the cost of living," CEO Ken Murphy told reporters today.
At its budget last year, the UK government added to the payroll costs of employers, hitting companies like Tesco with extra costs of hundreds of millions of pounds.
