Tesco raises profit forecast as online and Finest sales grow

Tesco raised its annual profit forecast on 8 October as the UK supermarket group reported stronger first-half earnings, according to the Guardian. Growth in online shopping and its premium Finest range helped trading, giving the retailer a firmer earnings outlook despite weakness at its Booker wholesale business and continuing uncertainty for consumers.

The group now expects annual underlying profit of £3.15bn–£3.3bn. Compared with the £3.0bn–£3.3bn range in Tesco’s June trading statement, that raises the lower bound by £150m, or 5%, while leaving the upper bound unchanged. The figures are a forecast for the financial year, rather than an annual result already achieved.

What changed in Tesco’s profit forecast

First-half sales increased 2% to £33.8bn, while underlying profit rose 6.5% to £1.8bn, the Guardian’s Sarah Butler reported. Profit therefore grew faster than sales, although the report does not quantify how much each operational improvement contributed to the earnings increase.

The higher forecast floor narrows the range Tesco previously set out in its Q1 trading statement. That June disclosure covered the 13 weeks ending 30 May 2026 and provides the earlier guidance against which the October change can be measured.

Online shopping and Finest support sales

Chief executive Ken Murphy said strong online trading had helped growth. Online sales increased 8%, while revenue from Tesco’s premium own-label Finest range rose 9%, according to the Guardian. Sales at established UK Tesco stores increased 1.5%, a separate measure from the group’s overall 2% sales rise.

Those channels had also grown earlier in the financial year. Tesco’s June statement reported first-quarter online sales growth of 8.9% and a 9% increase in Finest total sales, alongside UK like-for-like sales growth of 1.8%. Those figures describe the earlier quarter, rather than additional October results.

The previous financial year provides a longer backdrop. In its preliminary results for 2025/26, Tesco reported that Finest sales had increased 15% to £3bn and overall online sales had risen 11%. These annual figures cover a different period from the latest half-year report.

Booker remains a weak spot

Booker’s sales fell 2.6% in the latest account, contrasting with growth elsewhere in the group. The Guardian did not specify the measurement basis for that decline, so it cannot be treated as directly comparable with Tesco’s earlier like-for-like figures.

In the first quarter, Booker’s like-for-like sales fell 3.2%. Tesco attributed pressure partly to a lower-margin national account ending in August 2025 and to favourable weather that had supported the previous year’s comparison. These were explanations for that earlier quarter, not a quantified breakdown of the latest decline.

Booker’s first-quarter core retail sales declined 1.5% and core catering sales fell 3.3%. Tesco nevertheless reported 146 net new retailer partners during that period, showing that the earlier sales weakness coincided with growth in its retailer network.

Tesco’s consumer outlook and cost plans

Tesco said consumer confidence had remained “relatively resilient” in the first half, while geopolitical tensions continued to create uncertainty. That is management’s assessment of trading conditions; it does not establish that confidence has strengthened across all UK households.

The company said it remained focused on helping customers get value from their weekly shop. An earlier example came in June, when Tesco said it had extended Aldi Price Match to more than 2,000 Express stores during the first quarter.

Cost savings also form part of Tesco’s plans. In April, it targeted another £500m of savings through its Save to Invest programme during 2026/27 to fund its customer offer. That remains an announced annual target, rather than a verified amount delivered in the latest half year.

The Guardian reported that Tesco tested an AI meal-planning assistant with 280,000 staff from April before launching it for customers in September. Tesco also said AI was helping improve stock replenishment and supermarket energy efficiency, but the report supplied no savings total or independent assessment of those benefits.