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Tesco has seen its sales growth slow to 1.8% to £13.4bn in its first quarter, down from a growth of 4.2% the prior period, as the ongoing Middle East conflict impacted revenues.
The growth was nonetheless driven by online sales which grew by 8.9% during the quarter as the retailer expanded its Whoosh rapid delivery service to an additional 34 large stores.
Food sales grew by 2.6% over the period, driven by a 3.6% increase in fresh food sales and 9% growth for its premium Finest range. Tesco also launched more than 520 new and improved products to enhance its range.
The retailer maintained its full-year financial guidance, stating it still expects a group adjusted operating profit of between £3.0bn and £3.3bn.
It noted that the conflict in the Middle East “continues to create uncertainty for customers and we are committed to delivering the very best combination of price, quality and service”.
Free cash flow is expected to remain within its medium-term guidance range of £1.5bn to £2.0bn.
Tesco has also progressed its £750m share buyback scheme, purchasing £341m worth of ordinary shares between 16 April 2026 and 17 June 2026. The remainder of the programme is scheduled to finish by April 2027.
Ken Murphy, CEO of Tesco, said: “I am pleased with our progress in the first quarter, with customer satisfaction up strongly and continued sales growth building on the exceptional performance we delivered last year. With the conflict in the Middle East creating ongoing uncertainty for many households, we remain focused on giving customers the very best combination of price, quality and service.”
