London, 12 January 2026, 09:15 GMT — Regular session
- Tesco shares edge up in early London trading following a volatile post-Christmas period
- Pricing pressure and volume trends remain the key focus amid fierce competition in the UK grocery sector
- Upcoming catalysts feature UK inflation figures and Tesco’s April earnings report
Tesco PLC (TSCO.L) shares gained 0.5%, reaching 417.5 pence by 09:15 GMT, up from the prior close of 415.4 pence. So far, the stock has traded between 413.2 and 418.4 pence, inside its 52-week range of 310.3 to 480.5 pence. 1
Tesco, the UK’s largest grocer, plays a major role in consumer staples. Investors often view its performance as a gauge for household spending and the fierceness of the supermarket price war.
That’s key now, early in the year, with Christmas trading results still fresh. The market’s weighing whether Tesco can hold onto its share without slashing margins too much.
European stocks slipped on Monday, dragged down by bank shares, which weighed on risk appetite throughout the session. 2
In its Q3 and Christmas update on Jan. 8, Tesco reported UK like-for-like sales—those at stores open at least a year—grew 3.2% over the six weeks to Jan. 3, down from 3.9% in the previous quarter. The retailer maintained its full-year adjusted operating profit forecast at the high end of £2.9 billion to £3.1 billion, while keeping free cash flow guidance steady between £1.4 billion and £1.8 billion. CEO Ken Murphy noted, “Competition is as intense as ever and we know value remains a priority for customers.”
Tesco has relied on price cuts and its Clubcard loyalty program to keep the edge over competitors, even as inflation bites and the job market weakens. Its shares have climbed roughly 22% in the past year, buoyed by consistent gains in market share. 3
The stock ended Friday at 415.4 pence, slipping 1.6% that session. Monday’s action has it struggling to regain footing following last week’s update. 4
A filing revealed Tesco purchased 475,248 shares on Jan. 8 at an average of 425.18 pence each, as part of its £1.45 billion buyback plan. The company intends to cancel these shares. Since the programme kicked off in April 2025, Tesco has repurchased £1.436 billion worth of stock. 5
Traders are focused on whether Tesco can hold volumes steady while maintaining aggressive pricing. The competition is fierce: Sainsbury’s, Aldi, and Lidl continue to apply pressure, and suppliers remain eager to recoup costs.
But some data suggest demand is weakening beneath the surface. NielsenIQ reported UK grocery sales grew 2.5% in value in the four weeks ending Dec. 27, yet volume slipped 0.2%. Clive Black of Shore Capital described this as “perhaps the clearest indication” that appetite-suppressing drugs are changing eating habits. Murphy noted Tesco is monitoring the trend “very closely.” 6
The Office for National Statistics will release the next UK consumer inflation figures on Jan. 21, a key indicator retailers track closely for cost and wage pressures. Tesco is aiming for its preliminary results on April 16 as its next major update. 7
