Tesco (LSE:TSCO) delivered first-quarter sales growth as investments in value, product innovation and customer experience helped attract shoppers across its core markets despite ongoing economic uncertainty.
The retailer reported a 1.0% increase in group like-for-like sales for the first quarter of the 2026/27 financial year, with growth driven by strong performances in its food, online and Irish businesses. This was partly offset by a weaker contribution from Booker following the exit of a lower-margin contract.
Customer Satisfaction Continues to Improve
Tesco said customer satisfaction strengthened significantly during the quarter, with its UK net promoter score rising by six points.
Management attributed the improvement to continued investment in value and quality, including the expansion of its Aldi Price Match programme, the launch of new products under its Finest range and the introduction of additional high-protein offerings.
The company has also enhanced personalisation across its digital platforms, providing customers with more tailored shopping experiences and targeted promotions.
Online and Convenience Channels Gain Momentum
Online sales remained a key growth driver, supported by further investment in digital capabilities and delivery services.
Tesco continued expanding its Whoosh rapid-delivery platform, which offers customers access to a growing range of products through fast fulfilment options.
The retailer also increased the use of personalised Clubcard offers, helping strengthen customer engagement and encourage repeat spending across its store and online channels.
Media and Loyalty Businesses Deliver Additional Growth
Beyond its core grocery operations, Tesco highlighted continued progress within Tesco Media, its retail media business.
The division benefited from increased advertising activity linked to major events, including the FIFA World Cup, as brands sought to engage with Tesco’s large customer base through targeted marketing campaigns.
Management sees retail media as an increasingly important complementary revenue stream that leverages the scale of its loyalty programme and customer data capabilities.
Guidance Reaffirmed and Buyback Progresses
Tesco maintained its full-year guidance, continuing to expect adjusted operating profit of between £3.0 billion and £3.3 billion and free cash flow in the range of £1.5 billion to £2.0 billion.
The company also reported strong progress on its ongoing £750 million share buyback programme, with almost half of the authorised amount already completed.
Management said the continued pace of shareholder returns reflects confidence in the group’s cash generation capabilities and resilience despite broader macroeconomic and geopolitical uncertainties.
Focused on Value and Market Leadership
Tesco said its strategy remains centred on offering customers a combination of value, quality and convenience while continuing to invest in growth areas such as online grocery, loyalty programmes and rapid delivery.
The retailer believes its scale, strong brand position and broad customer offering leave it well placed to navigate competitive pressures and maintain its leadership position in the UK grocery market.
More about Tesco
Tesco plc is one of Europe’s largest food retailers, operating supermarkets, convenience stores and online grocery platforms across the UK, Ireland and Central Europe. The group also owns wholesale business Booker and offers a range of complementary services, including mobile, insurance and retail media. Tesco focuses on delivering value through a mix of own-brand and branded products while expanding its digital, loyalty and convenience offerings to meet changing consumer needs.
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