By James Davey
LONDON (Reuters) -Tesco, Britain’s biggest supermarket group, on Thursday raised its full-year profit forecast, saying it benefited from an unusually hot summer and won market share from rivals.
The group, whose share of Britain’s grocery market has grown this year to 28.4%, said it now expected full year 2025/26 adjusted operating profit of between 2.9 billion pounds and 3.1 billion pounds ($3.9-$4.2 billion), up from previous guidance of between 2.7 billion pounds and 3.0 billion pounds.
Tesco made 3.13 billion pounds in 2024/25.
UK like-for-like sales in the first half were up 4.9%, having been up 5.1% in the first quarter.
“Competitive intensity remains elevated,” Tesco said.
“However, in the first half, a better-than-expected customer response to our actions and the benefit of an extended period of good weather have helped offset the cost of our investments.”
Tesco had said in April it expected profit to fall in its 2025/26 year as it set aside cash to deal with a pledge of sustained price cuts from Asda, the number three player, which has been losing market share.
However, no price war has materialised and Tesco’s shares have risen 17% so far this year.
Industry data published by market researcher Worldpanel last month showed Tesco winning more market share than any other UK grocer.
CEO Ken Murphy said those gains “reflect the decisive action we took at the start of the year to further invest in value, quality and service.”
Analysts say Tesco’s strategy of matching the prices of discounter Aldi on over 600 items, together with heavy promotion of its Clubcard loyalty scheme, which provides lower prices for members, is driving growth.
Tesco is also becoming increasingly digital, stepping up personalised engagement with customers and developing growth avenues such as its online Marketplace platform and retail media.
First half adjusted operating profit rose 1.5% to 1.67 billion pounds.
(Reporting by James Davey; Editing by Kate Holton and Sarah Young)
