Tesco has reported a noteworthy upturn in both its market share and brand perception metrics, claiming it is outperforming competitors across key consumer measures. According to the retailer's interim results released on 2 October, Tesco's group sales rose by 5.1% to £33.1 billion, while adjusted operating profit edged up 1.5% to £1.67 billion. Most strikingly, Tesco's market share increased by 77 basis points year-on-year, reaching 28.4%, representing 28 consecutive weeks of market share gains. The company highlights improvements in brand perception—up by 96 basis points—including a 263 basis points rise in customer satisfaction, an 89 basis points uplift in perceived value, and a modest 13 basis points gain in quality perception. Tesco also recorded its highest Net Promoter Score (NPS) in six years, alongside reducing prices on over 6,500 products with an average price cut of approximately 9%, reinforcing its strong value positioning.

These performance indicators reflect the strategic investments Tesco has made in value, quality, and service, with CEO Ken Murphy attributing the successes to decisive actions taken earlier in the year. Murphy noted that despite the competitive intensity amid ongoing pressure on household budgets, Tesco has effectively balanced price competitiveness without compromising product quality and innovation. The retailer's Finest range alone experienced a 16% sales increase, now in its third year of consistent double-digit growth, bolstered by over 300 new and improved products. Meanwhile, Tesco's clothing label F&F achieved a 7.8% growth in like-for-like sales, although homeware sales declined slightly by 2.1%. The company also reported an 11.4% increase in UK online sales, driven notably by a rise in weekly order volumes.

Tesco's strategic focus extends to personalised customer engagement through its Clubcard loyalty scheme, which boasts a market penetration of 84% in the UK and 87% in the Republic of Ireland and Central Europe. Through targeted digital coupons and innovative trials like Your Clubcard Prices—which offers selected customers lower prices based on their prior shopping history—the company aims to deepen personalised interactions. Becky Brock, Tesco’s group customer director, underscored the critical role of Clubcard in driving growth, describing it as “fuel that powers Tesco,” while emphasising the importance of maintaining customer trust and value exchange.

The retailer’s effectiveness in strengthening market position is further supported by external data from Worldpanel by Numerator, which identified Tesco as the grocer making the largest market share gains amid intense competition. This outcome comes despite earlier speculation of a price war triggered by competitor Asda’s aggressive pricing strategies, which ultimately did not materialise. Tesco’s approach involved cost-matching discounter Aldi and leveraging its expanding digital and retail media platforms, including the addition of over 1,400 in-store screens and video advertising on the Tesco app and Express stores.

Britons’ altered shopping habits, shaped by the 2022 cost-of-living crisis and residual changes from the COVID-19 pandemic, appear to be working in Tesco's favour. As Murphy explained, many consumers continue to dine more frequently at home, increasing demand for fresh and premium food offerings. These economic behaviours, combined with popular home entertainment trends and cautious household spending, have created a favourable environment for Tesco's grocery sales growth. The CEO highlighted that the ongoing economic uncertainty, including anticipation surrounding the upcoming government budget, influences consumer behaviour and sector cost pressures. Murphy urged Chancellor Rachel Reeves to deliver a ‘pro-growth and pro-jobs’ budget, cautioning that previous fiscal policies have imposed additional costs on the retail sector.

Looking forward, Tesco has raised its full-year adjusted operating profit guidance to between £2.9 billion and £3.1 billion, up from an earlier forecast range of £2.7 billion to £3.0 billion. This optimism is underpinned by first-half results showing a 4.9% rise in UK like-for-like sales and a robust profit performance that includes a 17% rise in Tesco’s share price this year. The company continues to exploit its brand strength, pricing power, and digital engagement tools to maintain market leadership through a period when food inflation, taxation, wage growth, and labour market softness pose broader challenges to the grocery sector.

In summary, Tesco’s latest results underscore the retailer’s success in combining value-driven pricing strategies, quality product investment, and personalised customer engagement to drive growth and consolidate its market position amidst a highly competitive and economically uncertain landscape.