London, April 27, 2026, 17:37 BST
- Tesco slipped 2.17% to £4.80 on Monday, trailing the FTSE 100, which lost 0.56%.
- The retailer announced it’s kicking off another round of buying under its £750 million share repurchase program.
- UK retail sales volumes just logged their steepest drop since the CBI started tracking the data, fresh figures showed.
Tesco PLC lost ground on Monday, with shares dropping 2.17% to £4.80 after the company posted its latest buyback update. Investor attention stayed fixed on shaky UK consumer demand and the ongoing threat of inflation linked to conflict. The FTSE 100 also ended lower, off 0.56% in a wider downturn.
Timing is key here. Tesco’s handing cash back to shareholders just as households are dealing with pricier fuel and groceries, leaving investors to weigh if buybacks will make up for a more challenging trading climate. When companies buy back their own stock, the number of shares typically shrinks, pushing up earnings per share—that’s profit divided among fewer shares.
Pressure ratcheted up after a CBI survey revealed British retailers just saw the steepest annual sales drop in over four decades. The retail sales volume index slid to -68 for April, down from -52 a month prior—the weakest reading since records began in 1983. According to the survey, 77% of retailers experienced lower sales than last year, while only 9% reported any increase.
Tesco disclosed in a regulatory filing that it picked up 406,808 ordinary shares on April 24, paying an average 491.63 pence apiece. These shares are set for cancellation, taking the total in issue down to 6,383,953,638 ordinary shares. Since launching the current buyback phase on April 22, Tesco has snapped up 1,229,158 shares, spending £6.0 million.
Tesco is moving ahead with a buyback plan of up to £750 million, scheduled through April 2027. Citigroup Global Markets will handle share purchases on the London Stock Exchange and Cboe Europe, kicking off with an initial tranche capped at £250 million. Tesco said it’s targeting a reduction in share capital—nothing else.
Tesco is launching the buyback after reporting its full-year numbers earlier this month. The UK’s largest supermarket chain expects adjusted operating profit somewhere between £3.0 billion and £3.3 billion for the year ending February 2027. That figure—stripped of certain items—comes in against £3.152 billion for 2025/26, and sits near the consensus analyst estimate of £3.23 billion.
Tesco says its outlook is closely tied to how long the Middle East conflict drags on and what that means for UK consumers. Bernstein’s William Woods called the retailer’s guidance “careful and conservative.” Chief Executive Ken Murphy, speaking to reporters, said Tesco hadn’t seen any problems in its supply chain at that stage. Reuters
The disappointing retail survey put a finer point on those risks. Martin Sartorius, lead economist at the CBI, flagged a downturn for April—he said “sales momentum weakening noticeably” as consumer confidence stayed fragile. According to the CBI, April sales were rated poor for the season, and their outlook for May is also below seasonal expectations. CBI
Rival grocers are under pressure, too. Just last week, Sainsbury’s flagged that lingering uncertainty from the Iran war was weighing on consumer sentiment and could dent profits this year—a stance not far from Tesco’s own warning. According to Reuters, Sainsbury’s controls 15.6% of the UK grocery market and faces bigger risks than Tesco on non-food discretionary sales via Argos.
Tesco’s scale continues to work in its favor. Murphy pointed out to analysts that the company now holds its “highest market share in a decade”. Still, he acknowledged, “competition remains intense”—shoppers hunting for value and rivals keeping price pressure front and center.
Still, there’s a catch. Persistent pressure from fuel and food prices could push Tesco to ramp up discounts or promotions just to hold onto sales. This might offset gains from the lower share count—particularly if the broader UK retail slowdown seen in April spills over into May.
