London, May 14, 2026, 16:04 BST
- Court of Appeal dismissed all but one of Tesco Stores’ appeal grounds in a long-running equal pay case.
- Tesco has disclosed about 62,000 equal pay claims and said any liability could be material, though it cannot yet estimate the outcome.
- The company also published its 2026 annual report and AGM notice, while continuing a £750 million buyback.
Tesco Stores Ltd, a unit of Tesco PLC, lost most of a Court of Appeal challenge over how evidence should be assessed in its long-running equal pay litigation, a procedural setback for Britain’s biggest grocer as a separate tribunal hearing on its defence continues. The court dismissed all but one of Tesco’s appeal grounds and left the case moving forward, though not finally decided.
The case matters now because Tesco has disclosed about 62,000 claims from current and former hourly-paid store staff, with the number expected to rise as the litigation progresses. The claimants say store roles and distribution-centre roles should be treated as equal work for pay purposes, while Tesco has said the potential impact cannot yet be assessed.
It also lands in a wider UK retail pay fight. Tesco, Asda and Morrisons have all been forced to explain differences between store and warehouse pay at employment tribunals, according to the Financial Times, which reported this month that the Tesco case could cost billions if the company loses.
The Court of Appeal ruling, handed down on May 12, centred on whether an employment tribunal could rely on Tesco’s own training materials and operating documents when deciding what customer assistants and warehouse operatives were required to do. Lady Justice Elisabeth Laing wrote that the documents were detailed enough to be treated as evidence of the demands of the jobs.
Equal value, in plain terms, is the test for whether different jobs carry comparable demands, effort and skill. A material factor defence is an employer’s argument that a pay difference rests on non-discriminatory reasons, such as market rates or operational needs.
Tesco’s preliminary results said equal pay claims usually have three stages, and that claimants have to win at every stage. Tesco said the first gateway, comparability, had been conceded after an earlier European court ruling, leaving equal work assessment and its material factor defences still to be considered.
Leigh Day, which says it acts for more than 16,000 Tesco shop workers, framed the Court of Appeal decision as a win for claimants trying to avoid proving thousands of job details one by one. Kiran Daurka, an employment partner at the firm, said the ruling removed “unnecessary hurdles” in complex equal pay litigation. Leigh Day
Tesco has not lost the underlying equal pay case. The company said in its results that the claims involve “various and substantial uncertainties”, that it has multiple factual and legal defences, and that it intends to defend them vigorously.
The risk for Tesco is that an adverse final ruling could widen labour costs or trigger back-pay liabilities at a time when UK food retailers are already under pressure from wages, energy and price competition. The company said it cannot make an assessment of the likely outcome, potential liability or group impact at this stage, but added the potential quantum could be material depending on how many claims ultimately succeed.
The Court of Appeal also stressed how slow the process remains. The judgment said a final decision on the claims was “still a long way off”, and Tesco’s own disclosure said the ultimate determination of all claims was likely to take many years, including appeals. Courts and Tribunals Judiciary
The legal update came the same week Tesco published its Annual Report and Financial Statements 2026 and sent shareholders notice of its June 18 annual general meeting, to be held via the Lumi Global platform and broadcast from Welwyn Garden City.
Tesco also said it bought back 436,666 shares on May 13 at an average price of 458.02 pence under its existing £750 million buyback programme. The shares will be cancelled, and the company said it had bought 6.3 million shares for £30 million since the buyback launch on April 22.
Macro conditions are not offering much room. Prediction-market prices on Polymarket showed traders assigning an 89% probability to no change in the Bank of England’s June 18 decision and a 59% chance of a Bank of England rate hike at some point in 2026, keeping pressure on debt costs and household budgets.
