Tesco’s UK Sales Growth Slows in Q1 2026 as Middle-East Conflict Fuels Consumer Uncertainty

Tesco reported that UK like-for-like sales rose 1.8% to £13.4 bn in the 13 weeks to 30 May, missing the consensus forecast of 2.3% and falling short of the 3.1% growth recorded in the previous quarter (Reuters). The Guardian noted the same 1.8% rise but added that the prior quarter had shown 4.2% growth. Online sales surged 8.9%, lifting group turnover to £16.8 bn (up 1%). Despite the slowdown, Tesco kept its adjusted-operating-profit guidance at £3.0-£3.3 bn for the year ending Feb 2027. Share-price reaction diverged: Reuters cited a 15% rise over the past year, while the Guardian reported a 2.4% drop in early trading after the results.

Reuters

Tesco linked the weaker performance to the ongoing Iran-related war in the Middle East, which has pushed energy prices higher and “created ongoing uncertainty for many households.” Higher fuel costs have curbed discretionary spending, especially on travel, and dampened overall consumer confidence.

Reuters

• Like-for-like sales: +1.8% to £13.4 bn (Q1 2026)

Reuters

• Online sales growth: +8.9% (Q1 2026)

Reuters

• Group sales: +1% to £16.8 bn (Q1 2026)

Reuters

• Adjusted operating profit guidance: £3.0-£3.3 bn (FY 2026/27)

Reuters

• Previous-quarter growth: 3.1% (Reuters) vs 4.2% (Guardian)

Reuters

• Booker wholesale sales: -3.2% (Q1 2026)

The Guardian

• Share price: -2.4% early trade (Guardian) vs +15% year-to-date (Reuters)

Reuters

CEO Ken Murphy said the retailer was “pleased with its progress” and highlighted rising customer satisfaction. He reaffirmed the focus on “price, quality and service” while noting that Tesco remains “well placed to build on our progress to date.” The company also announced an expanded price-match pledge with German discounter Aldi across more than 2,000 Express stores and the launch of 520 new products. These moves are presented as safeguards against the current macro-economic headwinds.

The Guardian

City analysts had forecast a 2.3% sales-growth rate and an average profit of £3.25 bn, slightly above the lower end of Tesco’s guidance. The unexpected slowdown prompted a 2.4% share-price dip, and analysts flagged the risk of a profit decline—Tesco had warned in April that a profit drop could be the first since 2023. The decline in Booker wholesale sales further underscored pressure on high-street partners.

The Guardian

• Prior-quarter growth: 3.1% (Reuters) vs 4.2% (Guardian).

Reuters

• Online-sales data: reported only by the Guardian.

Reuters

• Share-price movement: contrasting short-term dip (Guardian) with longer-term rise (Reuters).

Reuters

• No independent consumer-survey data were provided to quantify the “ongoing uncertainty” cited by Tesco.

Reuters

• “Ken Murphy, the Tesco chief executive, 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.” — Ken Murphy, CEO, Tesco

The Guardian

• “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.” — Ken Murphy, CEO, Tesco

The Guardian

• “ongoing uncertainty for many households” — Tesco statement

The Guardian

• “well placed to build on our progress to date” — Tesco statement

The Guardian

Tesco will report full-year results later in the fiscal year, where the impact of sustained energy-price pressure and the Middle-East conflict will be closely examined. The retailer’s expanded price-match programme with Aldi and its new product pipeline are positioned as counter-measures to protect market share if consumer spending remains constrained. Monitoring of the geopolitical situation and its effect on fuel costs will remain central to Tesco’s strategic planning.

Reuters