London, Jan 10, 2026, 08:58 GMT — Market closed
- Tesco shares last closed at 415.4 pence, down 1.6% on Friday
- Grocer lifted its profit outlook to the top end of guidance after Christmas sales rose
- Buyback continued and two top executives bought shares after the slide
Tesco PLC shares ended Friday down 1.6% at 415.4 pence, leaving the stock about 8% lower over the past two sessions after the supermarket lifted its full-year profit outlook following a Christmas sales rise.
The reaction matters because Tesco is the biggest player in UK groceries and often sets the tone on pricing. Rivals are still fighting for share as shoppers stay price-sensitive, and any shift in food inflation feeds straight into how hard supermarkets have to lean on discounts. Sainsbury’s boss Simon Roberts told reporters he expected food inflation to keep easing in 2026.
Tesco on Thursday forecast adjusted operating profit — its measure that strips out one-offs — at the upper end of its 2.9 billion to 3.1 billion pound range, after underlying UK sales rose 3.2% in the six weeks to Jan. 3. UK like-for-like sales, which compare stores open at least a year and exclude fuel, rose 3.9% in the third quarter but cooled from 4.6% in the prior quarter, while industry data showed Tesco ended 2025 with 28.7% market share, up 0.2 percentage point on the year. Chief executive Ken Murphy said competition was “as intense as ever”, and Reuters reported analysts pointing to Aldi price matching and Tesco’s Clubcard scheme as key drivers. Reuters
Hargreaves Lansdown analyst Aarin Chiekrie wrote that festive sales growth came in a touch below market forecasts, with double-digit tobacco declines at wholesaler Booker and weakness in Central Europe weighing on the group. He said the long-term set-up looks solid, but warned the “near-term upside looks limited” with Tesco trading at the higher end of its peer group valuations. HL
Tesco also kept buying back stock. A regulatory notice showed it repurchased 475,248 shares on Jan. 8 at an average 425.18 pence under its existing 1.45 billion pound programme, with the shares set to be cancelled.
A separate filing showed Murphy and finance chief Imran Nawaz each bought 11,961 Tesco shares at 4.18 pounds on Friday.
Technically, Friday’s 412.6 pence low is the first level on traders’ screens into Monday. A break would put the 400 pence round number in play. On the upside, getting back above Thursday’s 422.1 pence close would take some heat out of the selloff, with the 440 pence area now acting like nearer resistance.
The risk is that easing food inflation becomes a tougher price war, squeezing margins even as costs rise. Britain’s main minimum wage rate rises to £12.71 an hour from April 1, government data show, and grocers are also watching supplier costs and the health of consumer spending.
Next week’s UK inflation release on Jan. 21 and December retail sales data on Jan. 23 are two near-term read-throughs for the sector, ahead of the Bank of England’s next policy decision on Feb. 5. For Tesco itself, the next hard checkpoint is its preliminary results on April 16. ONS gov.uk Bank of England
