London, January 8, 2026, 08:40 (GMT) — Regular session
- Tesco PLC stock fell about 5% in early London trade after a Christmas sales update
- Grocer now sees full-year profit at the upper end of its guidance range
- Investors focus turns to management’s call later today and rival updates this week
Tesco PLC (TSCO.L) shares slid on Thursday after the grocer nudged its profit outlook higher but reported a slower pace of sales growth over Christmas and a deeper drop at its Booker wholesale arm. The stock was down 21.3 pence, or 4.7%, at 431.3 pence in early deals.
The Christmas statement lands at an awkward moment for UK food retailers. They are trying to hold margins while keeping prices sharp enough to fend off discounters, with shoppers still split between “treat” spending and belt-tightening.
There is also a wider read-through. Industry data this week showed UK grocery inflation easing to 4.3% in the four weeks to Dec. 28, leaving volume growth hard to find, and traders are looking ahead to official UK inflation data due on Jan. 21 as supermarkets publish festive updates. Reuters
Tesco said it expects adjusted operating profit — a measure that strips out items it treats as one-offs — at the upper end of its £2.9 billion to £3.1 billion guidance range. Underlying UK like-for-like sales, which remove the impact of store openings and closures, rose 3.2% in the six weeks to Jan. 3 after a 3.9% rise in the third quarter to Nov. 22, the company said. Reuters
Chief executive Ken Murphy painted a choppy picture of demand. “There’s no doubt that consumer sentiment is mixed,” he told reporters, saying some households were “really counting every penny” even as others kept spending through Christmas. Reuters
Some analysts focused on Booker, where sales fell 2.1% over the six-week Christmas period. Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the unit “wasn’t as good as hoped” and argued the “net effect” was Tesco “only nudged” guidance to the top end of the range when “many had been hoping for a bigger upgrade.”
Tesco has been leaning hard on value messaging and sharper pricing versus rivals, including discounters Aldi and Lidl, while pushing loyalty deals through Clubcard. Investors will watch whether that stance keeps winning share without forcing a heavier round of markdowns.
The risk is that the price fight bites faster than costs ease. A weaker jobs market would add pressure too, especially for lower-income shoppers who are already trading down, and Booker’s exposure to tobacco volumes has been a recurring drag.
