London Daily

Focus on the big picture.
Monday, Sep 14, 2026

Tesco profits to come under pressure amid soaring food inflation

Tesco profits to come under pressure amid soaring food inflation

The UK’s largest retailer will update investors and analysts over its financial performance for the year to February next week.
Tesco is expected to reveal a dip in profits for the past year as the supermarket group grappled with rampant food and drink inflation.

The UK’s largest retailer will update investors and analysts over its financial performance for the year to February in an update on Thursday April 13.

A consensus of analysts has said Tesco is due to reveal a strong rise in sales but lower profits due to the challenging backdrop for costs.

It is predicted to unveil a group adjusted operating profit of £2.6 billion for the year, which would be down from £2.8 billion a year earlier.

Profitability has been dented by rocketing energy prices and higher labour costs over the past year.

UK Consumer Price Index (CPI) inflation saw a shock increase to 10.4% in February due to increased pressure on food prices, which worsened as a result of recent fruit and vegetable shortages.

Food and non-alcoholic drinks prices rose by 18% year on year in February, according to the Office for National Statistics (ONS).

Tesco’s buying power will have shielded the group from inflation quite this high but chief executive officer Ken Murphy said at the firm’s previous update in January that it expected more inflation to hit the retailer.

Shareholders will be eager for the company to outline whether its cost inflation is starting to ease back yet or if profits are likely to remain constricted for longer.

Profitability has also been dented by the retailer’s investment in prices to keep customers coming through the door in the face of the continued growth of German discounter rivals Aldi and Lidl.

"As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers"

The efforts on value have helped support significant sales growth, with revenues expected to have risen to £65.7 billion over the past year from £54.8 billion.

Analysts have suggested that shareholders will be looking for efforts from the company to continue to support its market share amid the volatile economic backdrop.

“As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“We don’t expect the league tables to be upended. But it will be important to assess if Tesco’s share has been nibbled away at, which would suggest consumer pressure is higher than previously thought.”

Bosses at Tesco will also have an opportunity to keep shareholders updated regarding its current strategy, which has seen the company cut further costs, such as through a management overhaul announced in January which cut around 2,100 jobs.

Sky News reported in February that the group was also reviewing the future of its banking arm.
Newsletter

Related Articles

0:00
0:00
Close
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
NHS Records Busiest Summer on Record Amid Severe Heatwaves
Harrods Faces Potential £150 Million Compensation Bill Over Al Fayed Abuse Claims
UK Parliament Opens Debate on Landmark Assisted Dying Legislation
Metropolitan Police Investigate Reform UK Over Alleged Foreign Electoral Donations
UK Economy Expands 0.4% in July as AI Investment Boosts Activity
Bank of England Signals Caution on Rates as Inflation Pressures Persist
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
Bayeux Tapestry Draws Large Crowds at British Museum
Cuts to International Aid Raise Concerns Over Fragile Overseas Health Systems
UK Airlines and Logistics Operators Adjust Capacity as Fuel Costs Rise
UK Mortgage Arrears Edge Lower in Second Quarter
UK Government Advances New Devolution Offers for English Councils
UK Parliament Begins Debate on NHS Governance and Single Patient Record Reforms
Andy Burnham Launches Number 10 North Devolution Initiative
UK Parliament Rejects Assisted Dying Bill for Terminally Ill Adults
UK Bans Goods From Israeli Settlements in the Occupied West Bank
UK Economy Grows 0.4% in July as Technology Services Strengthen
Metropolitan Police Continue Investigation Into Reform UK Political Financing
Chinese Crypto Entrepreneur Leon Li Identified as Seller of £190 Million London Mansion
Trades Union Congress Proposes Social Energy Tariff Funded by Higher Bank Surcharge
British Chambers of Commerce Calls for State Pension Triple Lock to Be Scrapped
Anthropic Says Claude Helped Disrupt Biological Weapons and Cyber Espionage Threats
UK Imposes Sanctions Over Israeli Settlements and West Bank Violence
UK Reimposes Sectoral Sanctions on Iran’s Aviation, Shipping and Energy Networks
UK Economy Grows 0.4% in July as AI and Programming Services Lift Activity
UK House of Commons Rejects Assisted Dying Bill by 286 Votes to 270
UK Reviews Nationwide Emergency Alert Tests After Systems Meet Reliability Targets
UK Seeks Faster Rail Links Across Northern Industrial Corridors
British Business Bank Allocates £150 Million for High-Growth Companies in Northern England
BBC Warns Staff Strikes Are Possible Amid Pay Dispute and £500 Million Savings Drive
×