Following today’s release of Tesco’s figures for Q3 and Christmas results for the 19 weeks ending 3 January 2026; Eleanor Simpson-Gould, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “Tesco’s latest results show competent execution, but lacklustre UK momentum. UK like-for-like sales rose 3.9% in Q3 and 3.2% over the 6 weeks ending 3 January 2026, roughly in line with the 3.6% UK food & grocery sector growth across November and December 2025, suggesting Tesco has defended rather than gained share in the grocery market this festive season. Tesco reiterated its guidance for FY2025/26, aiming for a group adjusted operating profit at the upper end of the £2.9bn to £3.1bn range. This positions the grocer to report flat operating profit growth for the full year as it strategically defends its margins while increasing price investments. The expanded Everyday Low Prices initiative across 3,000 branded products and the updated retro-stripe branding should enhance value perception in 2026. Yet, Tesco must tightly target investment on the most price-visible items and sustain product differentiation in fresh food to limit margin dilution while competing with discounters on price and premium grocers on quality.
“Fresh food was the bright spot for Tesco in this festive season, in which like-for-like sales grew 6.6%, supported by 340 new and improved Christmas lines and 180 Finest products. However, the late roll-out of Tesco’s Christmas dinner for under £10 offer, announced on 18 December, read as a reactive, last-minute traffic lever which came almost a month after Lidl’s prominent Christmas dinner for £1.50 per person promotion launch. This late focus on price by Tesco proved that the fight for the festive basket went to the wire and likely hindered Tesco’s early Christmas sales as consumers on stretched budgets opted to shop earlier with Lidl. Tesco also faced significant competition from premium retailers, squeezing the supermarket chain from both sides. Marks & Spencer delivered a 5.6% like-for-like food growth for the 13 weeks to 27 December, driven by enhancements in quality and innovation. This strong result from Marks & Spencer indicates that consumers were willing to spend on quality and premium ranges this Christmas, an area that Tesco has historically held its ground with its Finest range.”
