2025’s up to now been an important yr to personal Tesco (LSE:TSCO) shares. Taking a look at its newest development figures, the retail large’s efficiency has crushed analyst expectations. And when mixed with £700m of share buybacks and an extra £500m of deliberate repurchases, it’s not so stunning to see Tesco shares climb by 15.6%, or 18.7% for buyers who’ve been reinvesting their dividends.
These positive aspects are at present outpacing the FTSE 100‘s 14.3% whole return over the identical interval, making Tesco inventory pickers notably higher off versus passive index buyers. And for each £1,000 invested, they now have as much as £1,870 to take pleasure in.
However now the query turns into, is it too late to contemplate shopping for Tesco shares right now?
Resilience towards finances operators
Throughout the primary three months of its 2026 fiscal yr (ending in January), Tesco achieved £16.4bn in whole gross sales, with like-for-like gross sales up 4.6%. For reference, most analysts have been anticipating these numbers to be at £16.1bn and three.9% respectively. And with the corporate reiterating full-year steering, the group’s upward momentum continued.
Digging deeper, it appears the first driver of this development stems from sensible strategic selections by management. By introducing extra Clubcard provides and price-matching schemes, Tesco’s helped curb the defection of its finances clients to worth retailers like Aldi and Lidl.
Nonetheless, on the identical time, the corporate’s additionally ramped up its vary of premium provide with Tesco’s Most interesting. This achieved two targets. Firstly, it allowed Tesco to lure clients from extra premium grocery store chains like Waitrose. And secondly, it launched higher-margin merchandise within the retail combine, supporting stronger earnings development. And the general affect’s clear when wanting on the newest market share knowledge from Kantar.
Tesco continues to carry the crown with a resilient 28.4% of the market below its management – a a lot stronger efficiency in comparison with a lot of its rivals.
| Firm | December 2024 Market Share | August 2025 Market Share |
| Tesco | 28.5% | 28.4% |
| Sainsbury’s | 16.0% | 15.0% |
| Asda | 12.4% | 11.8% |
| Aldi | 10.1% | 10.8% |
| Morrissons | 8.6% | 8.4% |
| Lidl | 7.3% | 8.3% |
| Waitrose | 4.6% | 4.4% |
Nonetheless room to develop?
Being a well-liked FTSE 100 inventory, Tesco at present has a whole lot of protection from institutional buyers. And for essentially the most half, the outlook seems to be pretty bullish. JP Morgan‘s positioned a share value goal of round 450p, Citigroup is at 460p, and Deutsche Financial institution is extra optimistic at 470p.
That implies Tesco shares may ship as much as one other near-10% achieve by this time subsequent yr (earlier than dividends), pushed by continued like-for-like gross sales development, market share resilience, and improved profitability.
Nonetheless, like all investments, there are dangers to contemplate. Most notably, there’s nonetheless the specter of a brand new potential value warfare among the many huge 4. Asda’s risk of value undercutting sparked some volatility again in March. And whereas Tesco’s financials look sturdy, pricing competitors will undoubtedly take a toll that might end in missed earnings targets and a shift in investor sentiment.
On this situation, Tesco shares may battle to maintain up with analyst forecasts. However in the long term, I stay assured within the agency’s skill to defend its market share. That’s why, regardless of the dangers, buyers looking for publicity to the retail sector might need to contemplate taking a better have a look at this enterprise.
