Tesco Sees Boost to 2026 Outlook After Strongest Christmas Market Share in a Decade, But Shares Take a Hit
Tesco has reported its best Christmas market share in over a decade, with the supermarket raking in an impressive share of the grocery market. The company, which currently holds almost 29% of the market, saw sales of fresh food and its Finest own-label range soar during the festive period.
However, Tesco's strong performance did little to boost investor confidence, as shares dropped by more than 6% on Thursday after the company revealed a disappointing third-quarter sales update. Analysts had been hoping for stronger growth in the UK market, but instead, Tesco saw sales rise only 3.2%, falling short of expectations.
Despite this, CEO Ken Murphy remained upbeat, saying that he was "not even remotely concerned" about the company's performance and that it was a positive sign that consumers were buying into celebrating with their families. Murphy attributed the slowing sales growth over Christmas to the company's efforts to keep prices low, which has helped to keep inflation "materially lower" than the industry average.
Tesco is well-positioned to weather economic headwinds and soft consumer sentiment, according to analysts. The company's enormous scale and strong relationships with suppliers are key factors in its success story. However, Murphy did acknowledge that consumer spending was not immune to global economic concerns and rising costs, which have squeezed household budgets.
Despite these challenges, the outlook for 2026 remains reasonably positive, according to Murphy. Employment rates remain resilient, and consumers have continued to spend on festive treats despite tight budgets. Tesco is poised to take market share from struggling retailers like Asda, which has been struggling to turn around falling sales.
The price war between Tesco and its competitors is set to intensify as January sets in, with Asda pledging to drop the cost of everyday products below those of loyalty card prices at Tesco's rivals. Tesco has also promised to keep costs consistently low through its new "everyday low prices" campaign.
However, Murphy called on the government to revamp the business rates system, which he said was unfair and saw retailers and hospitality businesses paying more than their fair share. Despite these challenges, Tesco is confident of delivering annual profits of around £3.1bn, which is at the upper end of expectations.
Tesco has reported its best Christmas market share in over a decade, with the supermarket raking in an impressive share of the grocery market. The company, which currently holds almost 29% of the market, saw sales of fresh food and its Finest own-label range soar during the festive period.
However, Tesco's strong performance did little to boost investor confidence, as shares dropped by more than 6% on Thursday after the company revealed a disappointing third-quarter sales update. Analysts had been hoping for stronger growth in the UK market, but instead, Tesco saw sales rise only 3.2%, falling short of expectations.
Despite this, CEO Ken Murphy remained upbeat, saying that he was "not even remotely concerned" about the company's performance and that it was a positive sign that consumers were buying into celebrating with their families. Murphy attributed the slowing sales growth over Christmas to the company's efforts to keep prices low, which has helped to keep inflation "materially lower" than the industry average.
Tesco is well-positioned to weather economic headwinds and soft consumer sentiment, according to analysts. The company's enormous scale and strong relationships with suppliers are key factors in its success story. However, Murphy did acknowledge that consumer spending was not immune to global economic concerns and rising costs, which have squeezed household budgets.
Despite these challenges, the outlook for 2026 remains reasonably positive, according to Murphy. Employment rates remain resilient, and consumers have continued to spend on festive treats despite tight budgets. Tesco is poised to take market share from struggling retailers like Asda, which has been struggling to turn around falling sales.
The price war between Tesco and its competitors is set to intensify as January sets in, with Asda pledging to drop the cost of everyday products below those of loyalty card prices at Tesco's rivals. Tesco has also promised to keep costs consistently low through its new "everyday low prices" campaign.
However, Murphy called on the government to revamp the business rates system, which he said was unfair and saw retailers and hospitality businesses paying more than their fair share. Despite these challenges, Tesco is confident of delivering annual profits of around £3.1bn, which is at the upper end of expectations.
they finally showed some serious sales power after all those years of struggling 
but 6% dip in shares is still a major letdown 
i mean, ceo ken murphy thinks he's being optimistic lol "not even remotely concerned" about slowing growth 
the price war with asda is gonna be EPIC 
can't wait to see who comes out on top 
business rates system needs a total overhaul btw 
. But, on the bright side, their efforts to keep prices low have definitely helped with inflation 
. One thing's for sure, the price war between Tesco and Asda is gonna get real intense 
. But, you know what? I think Tesco's got a solid plan in place 
, and with their scale and supplier relationships, they're well-equipped to handle any economic headwinds 
. Fingers crossed for them! 
. like, 29% market share is def a bonus but it's not like they're gonna take on asda or somethin' 
. also, CEO ken murphy is just tryna spin the fact that christmas sales were only up 3.2% 
. It feels like there are a lot of moving parts - global economic concerns, rising costs... but at the same time, consumers are still willing to splurge on some festive fun 
. One thing I do know is that I'm hoping Tesco can keep those everyday low prices going - it's always a good feeling when you're getting a solid deal 
and focusing on taking market share from Asda 
.
. It's gonna get intense 
But seriously, it's good that they're keeping costs low and keeping inflation under control... still, I wonder how they'll do against Asda's price war in Jan 
tesco did well but like its kinda weird they took a hit on their shares lol guess that means all those free nandos vouchers werent so great after all 
anyway back to christmas, my fave time of year is when theres all that festive food i mean who doesnt love turkey and mince pies? and im pretty sure tesco did more business in the uk than asda which is just sad for them 
. murphy's confidence is super refreshing 
️, but their 2026 outlook is still looking solid, fam 
, but tesco's got this 
. we'll see how it all plays out in 2026 
.
. on one hand, they're killing it in christmas sales, but then again, their shares take a hit after that disappointing q3 update 
. Their scale is unmatched, and those relationships with suppliers? Forget about it 
. And I gotta give props to Ken Murphy for being all optimistic about the outlook, even when the numbers weren't exactly rosy 
. The price war is heating up, and I'm low-key excited to see how it all plays out 