Shares in grocery giant Tesco (TSCO) fell 5% after its Christmas trading update disappointed investors.
UK sales were up 3.9% on a like-for-like basis in the third quarter to 22 November, below the 4.1% expected by the market.
Moreover, growth slowed to 3.3% in the six weeks to 3 January, in contrast to earlier till roll data which suggested sales rose 4.3% in the 12 weeks to Christmas, ahead of the 3.8% market average.
The wholesale arm Booker also missed forecasts with a 0.9% fall in sales for the period to 22 November against expectations of a 1.2% increase, and 2.1% fall in sales over the six-week Christmas period.
Chief executive Ken Murphy said competition in the grocery market was ‘as intense as ever’ and value remained foremost in shoppers’ minds.
| Price: 428.5p -5.4% | P/E: 19x |
| Market Cap: £27.2bn | Yield: 3.1% |
Tesco has done well to keep its market share in a fiercely competitive market, but that comes at the expense of pricing.
The company has expanded its Everyday Low Prices to more than 3,000 branded products, alongside its Aldi Price Match on over 650 items.
On the plus side, Tesco now expects to deliver FY26 adjusted operating profit at the upper end of its October 2025 guidance of £2.9 billion to £3.1 billion.
It also confirmed its free cash flow guidance of between £1.4 billion and £1.8 billion for the full year.
Read the press release here: https://www.tescoplc.com/investors
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