London, January 9, 2026, 10:58 GMT — Regular session
- Tesco shares were down about 1.6% in morning trade, extending a sharp fall on Thursday.
- The grocer nudged profit expectations to the top end of guidance after Christmas sales growth cooled.
- Investors are now looking toward Tesco’s April 16 results for a clearer read on margins and price moves.
Tesco PLC TSCO.L shares fell 1.6% to 415.4 pence by 1051 GMT on Friday, extending the selloff that followed its Christmas trading update. The stock slid about 6.7% on Thursday and was hovering above the session low, with the day’s range at 412.6 pence to 420.7 pence.
The move matters because UK grocers live on volume and thin margins, and investors react fast when the balance shifts. Tesco is gaining share, but traders want to know how much extra pricing pressure it will take to keep it.
Chief executive Ken Murphy said sentiment is split between shoppers who feel comfortable and those “counting every penny”. “There’s no doubt that consumer sentiment is mixed,” he said after the update. https://uk.marketscreener.com/news/uk-consumer-sentiment-is-mixed-says-tesco-boss-ce7e59dddb8bf321
In its Q3 and Christmas trading statement, Tesco said UK like-for-like sales — which adjust for store changes — excluding VAT and fuel rose 3.2% in the six weeks to Jan. 3, after a 3.9% rise in the third quarter to Nov. 22. Tesco said its 12-week UK market share rose 23 basis points (0.23 percentage point) to 28.7%. Murphy said “Competition is as intense as ever” as Tesco forecast full-year adjusted operating profit, which strips out one-offs, at the upper end of its 2.9 billion to 3.1 billion pound range and kept free cash flow guidance at 1.4 billion to 1.8 billion pounds; it will report preliminary results on April 16. https://www.marketscreener.com/news/tesco-q3-and-christmas-trading-statement-2025-26-tesco-plc-q3-christmas-trading-statement-2526-pre-ce7e59ddd98ff121
Aarin Chiekrie at Hargreaves Lansdown said the 19-week group like-for-like sales growth of 2.9% was slightly below forecasts, with Booker and Central Europe the weak spots. “Weakness in Central Europe is something we’ll be keeping an eye on,” he wrote. https://www.hl.co.uk/shares/share-research/tesco-trading-update-profit-guidance-nudged-higher
Peer updates added context for the sector. Sainsbury’s said on Friday its Q3 like-for-like sales excluding fuel rose 3.4% and it stuck to a profit outlook of more than 1 billion pounds for the year to March, with grocery doing the heavy lifting.
Tesco also reported another small slice of its ongoing buyback, purchasing 475,248 shares on Jan. 8 at an average 425.18 pence. The shares will be cancelled, it said.
But the risk case is straightforward: a harder price fight could compress profit even if sales keep rising, especially if costs tick up again. Any further drag from Booker’s tobacco decline or Central Europe would make that trade-off uglier.
Traders will watch whether the shares can steady after two bruising sessions and whether Tesco flags more price investment in the weeks ahead. The next hard catalyst is the April 16 results, when guidance and cash flow will be the main tests.
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