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Tesco Q1: UK sales rise 1.8%, customer NPS jumps 6 points, full-year guidance unchanged. Steady progress for investors.
This article covers information on Tesco PLC.
LON:TSCOTesco has opened its 2026/27 financial year with a steady rather than spectacular first quarter, and that is probably the right way to read this update. Group like-for-like sales – a measure that strips out store openings, closures and some timing noise – rose by 1.0% in the 13 weeks to 30 May 2026, while the key UK business delivered 1.8% growth.
That might not look dazzling at first glance, but context matters. Tesco is comparing against a very strong prior year, which management says was helped by record-breaking weather and disruption at competitors. On that basis, this is a respectable start, and the more encouraging bit is that customer satisfaction is moving up strongly at the same time.
| Division | Sales | LFL sales change |
|---|---|---|
| UK & ROI | £13,438 million | 1.8% |
| UK | £12,600 million | 1.8% |
| ROI | £838 million | 3.3% |
| Booker | £2,246 million | (3.2)% |
| Central Europe | £1,142 million | 0.8% |
| Group | £16,826 million | 1.0% |
The headline message is simple enough. Tesco’s main supermarket operations in the UK and Ireland are still growing, online is doing well, and management has kept full-year profit and cash guidance unchanged.
The UK remains the engine room, so the 1.8% like-for-like sales rise here is the most important number in the release. Better still, Tesco says this came with customer satisfaction moving higher, with Net Promoter Score, or NPS – a common measure of customer willingness to recommend a brand – up 6 points year-on-year to 31.
That matters because grocers do not win on price alone. If Tesco can improve value perception, range and convenience without sacrificing service, it gives the business a better chance of defending market share and margins over time.
Food sales in the UK rose by 2.6%, with Fresh food up 3.6%. That is a decent sign because Fresh categories tend to say a lot about customer traffic and how competitive a supermarket really is.
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There was also strong growth in Tesco Finest, up 9% in the quarter and 29% on a two-year basis. That suggests Tesco is not just fighting for the budget-conscious shop, but also holding onto shoppers willing to spend a bit more on premium lines. That is useful because premium ranges can support profitability.
Online sales in the UK rose by 8.9%, while Tesco expanded Whoosh rapid delivery into another 34 large stores. The company also rolled out ‘Book for Later’ delivery slots, which should make the offer more practical for shoppers who want same-day delivery without the scramble.
This is important because convenience and digital service are now part of the moat. Grocery is still a scale game, and Tesco’s ability to spread investment across stores, online, delivery and data gives it an advantage that smaller rivals may struggle to match.
Tesco is leaning hard into value, and that looks sensible in the current environment. Management highlighted the extension of Aldi Price Match to more than 2,000 Express stores, which should help Tesco stay competitive in convenience locations where shoppers are often more price-sensitive than investors assume.
It also said Your Clubcard Prices has delivered nearly 100 million tailored offers since launching in March. That tells you Tesco is pushing further into personalised pricing and promotions, using its data to make offers more relevant. If it works, that can improve loyalty and basket size without relying purely on blanket discounting.
The company launched more than 520 new and improved products during the quarter, including over 220 Finest lines. That is not headline-grabbing in isolation, but in supermarkets, frequent product refresh matters because it keeps ranges relevant and gives shoppers reasons to come back.
Outside the UK, the Republic of Ireland put in a good shift. Like-for-like sales rose 3.3%, total sales rose 5.6% at constant exchange rates, and online was up 10.9%. Tesco said growth was volume-driven, which is a decent quality signal because it implies customers are buying more, not just paying higher prices.
Central Europe was quieter but still positive, with like-for-like sales up 0.8% and online growth of 17.4%. That is not a blockbuster number, yet it does show the business moving forward rather than slipping back.
The softer area was Booker, Tesco’s wholesale arm. Like-for-like sales there fell by 3.2%, with core retail down 1.5% and core catering down 3.3%.
There is an important caveat, though. Tesco says Booker’s performance was hit by the exit of a lower-margin national account in August 2025, which had about a 200 basis point impact on core retail sales. In plain English, Tesco walked away from some less profitable business, so the sales decline is not automatically a disaster.
Even so, the numbers are still weaker than investors would like. Catering also faced tough comparatives because the prior year benefited from better weather and a later Easter. Fair explanation, but it is still a drag on group momentum in the here and now.
One of the most market-sensitive parts of any trading update is guidance, and Tesco left it unchanged. The company still expects group adjusted operating profit of between £3.0 billion and £3.3 billion for 2026/27, with free cash flow within its medium-term guidance range of £1.5 billion to £2.0 billion.
That should be taken as reassuring. Tesco has made a good start, but not one strong enough to trigger an upgrade this early in the year. Still, maintaining guidance in a competitive grocery market is a positive in itself.
The company also updated investors on its £750 million share buyback. Since 16 April 2026 and up to market close on 17 June 2026, Tesco has bought back £341 million of ordinary shares, with the rest due to be completed by April 2027.
Buybacks do not fix a weak business, but they can support shareholder returns when cash generation is healthy. Here, it adds another layer of confidence that Tesco sees enough financial strength to keep returning capital.
My read is that this is a good, disciplined update rather than an exciting one. The UK core is holding up well, customer satisfaction is improving, online growth is strong, and the company is still balancing value, premium ranges and convenience better than many rivals.
The downside is that group growth was only 1.0%, and Booker remains a soft patch. There is also the broader uncertainty management flagged around the conflict in the Middle East and its effect on households. Tesco did not disclose any direct cost impact from that, so for now it is more of a macro risk marker than a quantified warning.
Overall, this looks modestly positive. Tesco is not racing ahead, but it does seem to be executing steadily in the areas that matter most – value, service, digital convenience and customer loyalty. For a defensive retail name, that is the sort of update long-term investors usually prefer to drama.
If you own Tesco shares, this update does not scream rerating, but it does support the idea that the business remains in decent shape. In this market, steady execution and no unpleasant surprises can go a long way.
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