Tesco has today forecast full-year profit at the upper end of its guidance as it reported a 3.2% rise in underlying UK sales for the key Christmas trading period, winning market share from rivals.
The group said it now expected adjusted operating profit at the upper end of the £2.9 billion to £3.1 billion range it forecast in October. It made £3.13 billion in 2024/25.
Tesco's update showed it had continued to outperform the wider UK retail market with a focus on value at a time of subdued consumer confidence, still high inflation and weakening employment.
However, its performance was a little below analysts' consensus expectations.
Under Ken Murphy, chief executive since 2020, the group is also benefiting from a strategy to improve the quality of its products, increase innovation and enhance customer service.
Tesco said its Irish like-for-like sales over the 13 weeks to November rose by 5% while its Christmas sales increased by 3.8%. Its market share rose to 24%, marking a fourth year of market share gains.
The retailer said its Irish food sales rose by 5.2% year-on-year with particularly strong growth in fresh food.
It opened five new stores in the latest period under review, as well as rolling out its Whoosh same day delivery service to 18 new locations including further expansion in Dublin and launches in Cork and Galway.
Geoff Byrne, CEO Tesco Ireland, said the supermarket's strong third quarter performance, which includes a "very successful" Christmas trading period, reflects the ongoing positive momentum across the business along with its customer first focus.
"We saw particularly strong growth in our fresh food category during the quarter, with quality and innovation recognised through a record 84 Blas na hÉireann awards, including 26 gold medals," Mr Byrne said.
"We've continued to invest in our store network, opening five new stores in recent weeks including two large stores in Howth and Drogheda, creating 220 new jobs, and bringing Tesco to even more customers across Ireland," the Tesco Ireland CEO stated.
"Our rapid delivery service, Whoosh, is also growing strongly, now available in Cork and Galway as well as Dublin. Alongside this, our broader online grocery home shopping service continues to see consistent year on year growth," he added.
Meanwhile, industry data published earlier this week showed Tesco ended 2025 with a UK grocery market share of 28.7%, up 20 basis points on the year and its highest level since March 2015.
Tesco said third quarter to November 22 UK like-for-like sales rose 3.9% having been up 4.6% in its second quarter. Growth then slowed to 3.2% in the six weeks to January 3.
Shares in Tesco have increased 22% over the last year.
"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," Ken Murphy.
"Competition is as intense as ever and we know value remains a priority for customers," he said.
Analysts say Tesco's strategy of matching the prices of discounter Aldi on over 650 items, together its Clubcard loyalty scheme, which provides lower prices for members, is driving growth.
On Monday, Tesco said it was locking the prices of over 3,000 branded products, including Weetabix cereal, Heinz baked beans and PG Tips teabags.
British consumer sentiment is "mixed", with a marked divide between those who have cash to spend and those who do not, the boss of Tesco said today.
"There's no doubt that consumer sentiment is mixed," Ken Murphy told reporters after Tesco updated on Christmas trading.
"You are seeing consumers whose household budgets are in pretty good shape and then you're seeing a lot of people that are really counting every penny," he said.
Murphy drew comfort from what he saw as still resilient employment in the UK economy.
"I think employment is the key factor in how consumers feel about the world," he said.
"Despite comments to the contrary, people enjoyed Christmas, they spent," he added.
