London, May 13, 2026, 17:01 BST
Tesco lost most of a Court of Appeal challenge over how tribunals assess job value in its long-running equal-pay case, keeping a large legal overhang in view while Britain’s biggest supermarket presses on with a £750 million share buyback. The judgment, handed down on Tuesday, centred on whether Tesco’s own training manuals could be used as key evidence of what shop-floor and distribution workers are required to do.
The timing matters. The case is back in focus because the ruling helps the tribunal avoid a wholesale re-run of a key stage in proceedings that began in 2018, even though the court said a final decision on the claims is still “a long way off.” Equal value, in this context, means deciding whether different jobs impose comparable demands before a tribunal considers whether pay differences can be justified.
The Court of Appeal largely upheld earlier Employment Tribunal and Employment Appeal Tribunal rulings and rejected Tesco’s attempt to force a broader rehearing, ICLG reported. The ruling does not decide whether Tesco unlawfully underpaid store workers; it settles a procedural fight over evidence and job assessment.
Law firm Leigh Day, which represents some of the claimants, says more than 60,000 shop workers are bringing equal-pay claims against Tesco, with the firm acting for more than 17,000 of them. The workers say predominantly female store staff were paid less than predominantly male distribution workers for work of equal value; Tesco disputes the claims.
“These hearings go to the heart of why Tesco is paying its store workers less than their colleagues in distribution,” Paula Lee, employment partner at Leigh Day, said earlier this month. Tesco has said store and distribution roles require different skills and demands, adding: “This has absolutely nothing to do with gender.” Leigh Day
The possible bill is still uncertain. Leigh Day estimated in 2018 that the wider claim could cost Tesco as much as £4 billion, while more recent industry reports have said Tesco has put the potential cost lower; the final number, if any, depends on later tribunal findings and appeals.
The legal fight sits beside a steady capital-return programme. Tesco said on Wednesday it bought 435,284 ordinary shares on May 12 at an average 459.47 pence each, through Citigroup Global Markets, and would cancel the stock. Since the buyback began on April 22, Tesco has bought 5.87 million shares for £28 million, a filing showed.
That buyback is backed by strong recent cash generation. Hargreaves Lansdown said Tesco’s full-year retail sales rose 4.3% to £66.6 billion, while underlying operating profit rose 0.6% to about £3.2 billion and free cash flow reached £2.0 billion. The company has guided for underlying operating profit of £3.0 billion to £3.3 billion in the year ahead.
Verushka Shetty, equity analyst at Morningstar, wrote that Tesco’s fiscal 2026 results showed broad-based sales growth and that the grocer was “well positioned” to meet its short- and long-term targets. She also warned that the competitive environment would remain intense in fiscal 2027. Morningstar
Competition is still the live operating issue. Worldpanel by Numerator data cited by Reuters showed UK grocery inflation eased to 3.8% in the four weeks to April 19, while Tesco and Sainsbury’s continued to win market share. Lidl remained the fastest-growing bricks-and-mortar grocer, and Asda continued to lose share.
The legal context is not Tesco-only. Morrisons is facing a similar equal-pay hearing, while Next lost a tribunal case in 2024 after failing to show that paying sales consultants less than warehouse workers was not sex discrimination, Reuters reported at the time.
The risk for Tesco is that a later tribunal ruling could turn a procedural setback into a financial charge large enough to compete with buybacks and dividends for cash. But the downside is not automatic: Tesco still argues the jobs are different, later decisions may narrow the claims, and any adverse ruling could face further appeal.
For now, the market story is split. Tesco is returning cash and defending market share from a position of scale, but the Court of Appeal ruling means one of UK retail’s biggest pay disputes is moving forward rather than starting again.
