Highlights

  • Tesco shares fell 6.10% to 425.00 GBX on 8 January following its trading update.
  • UK market share rose to 28.7% over 12 weeks, with online sales up 11.2%.
  • FY 2025/26 operating profit is expected at the upper end of the GBP 2.9bn–GBP 3.1bn range.

Tesco PLC (LON:TSCO) shares declined sharply during trading on 8 January, following the retailer releasing its Q3 and Christmas Trading Statement for FY 2025/26. The stock was trading at 425.00 GBX, down 27.60 GBX or 6.10% by late morning on 8 January 2026. The decline might came following the latest operational update, full-year guidance reaffirmation, and analyst commentary.

Jefferies maintained a hold rating on Tesco, with a target price of GBX 450.

UK Business Records Market Share Gains

In the UK, Tesco reported its highest market share in over a decade, driven by investments across the shopping trip. Over the 12-week period, market share increased by 23 basis points to 28.7%, while the four-week market share rose 31 basis points to 29.4%. The company reported year-on-year gains across 32 consecutive four-week periods.

Like-for-like sales in fresh food rose 6.6%, supported by price investments and product updates. Finest range sales increased 13.0%, with party food sales up 22%. Online sales rose 11.2%, with Whoosh sales increasing 47%. Home and Clothing delivered LFL growth of 2.1%, including 4.4% growth in clothing during the Christmas period.

ROI, Booker and Central Europe Performance

In the Republic of Ireland, Tesco reported market share gains of 41 basis points to 24.0%, marking a fourth consecutive year of gains. Food sales increased 5.2%, led by fresh food. The company opened five new stores and expanded Whoosh to 18 additional locations.

Booker reported core catering sales growth of 2.4%, while core retail sales declined 0.4%, partly due to the exit of a lower-margin national account. Best Food Logistics recorded growth of 0.6%.

In Central Europe, sales growth was supported by fresh food and online performance. Online LFL sales increased 14.3%, while Finest LFL sales rose 28% following the launch of new own-brand products.

FY25/26 Outlook and Guidance

Following its Christmas performance, Tesco stated it now expects FY 2025/26 Group adjusted operating profit to be delivered at the upper end of its previously issued guidance range of GBP 2.9 billion to GBP 3.1 billion. Free cash flow is expected to remain within the medium-term guidance range of GBP 1.4 billion to GBP 1.8 billion. Guidance is provided on a 52-week basis.