Targeted price investment, innovation and new product ranges have resonated with customers this quarter, says Tesco CEO Ken Murphy.
Tesco intends to pull on all levers to maintain its position in an “intensely competitive market”, CEO Ken Murphy told media today (12 June) as the business reported its first quarter financial results.
“Customers are recognising that we are particularly competitive across all aspects of the shopping trip, not just price,” he said.
Tesco is seeing an “intensification in competition”, however Murphy also described it as a “rational intensification, in the sense that everybody is kind of staying toe to toe with each other”.
Tesco intends to pull on all levers to maintain its position in an “intensely competitive market”, CEO Ken Murphy told media today (12 June) as the business reported its first quarter financial results.
“Customers are recognising that we are particularly competitive across all aspects of the shopping trip, not just price,” he said.
Tesco is seeing an “intensification in competition”, however Murphy also described it as a “rational intensification, in the sense that everybody is kind of staying toe to toe with each other”.
“So, you’re not necessarily seeing massive movement and relative competitiveness, but everyone has, I think, upped their game a notch and that would be broadly what we’re seeing across the industry,” he said.
Murphy claimed Tesco has responded “very effectively” to the competition, “without dropping the ball on quality and innovation”.
The retailer’s market share is up 44 basis points for the 12 weeks ending 18 May 2025, according to Kantar data, marking 24 consecutive four-week periods of share gains.
Tesco’s brand perception has also risen by 65 basis points, according to YouGov data, noting “progress across a broad range of pillars” such as quality and price.
Quality and price
“When it comes to value, quality is as important as price. So, we have continued our focus on improving and innovating across all our ranges,” said Murphy.
The CEO cited F&F Clothing’s move online in May and growth from fast delivery service Whoosh as contributing to Tesco’s market position.
The supermarket also launched more than 350 own brand products in the last quarter and is promising “exciting innovation” for its summer ranges.
Tesco Finest, the supermarket’s premium own brand offering, grew 18% “as the brand continues to resonate with customers looking for affordable ways to treat themselves”.
Group like-for-like sales grew by 4.6% to £16.4bn in the 13 weeks to 24 May. The retailer is maintaining its profit guidance first published in April, with an expected adjusted operating profit between £2.7bn and £3bn this year.
“The market remained intensely competitive and we are committed to ensuring customers get the best value in the market by shopping at Tesco, we are therefore reiterating the full year guidance we gave in April,” explained Murphy.
Sales in the UK grew 5.1% – an uptick on last quarter’s 4.3% – while Republic of Ireland sales grew by 5.5%.
Overall food sales grew by 5.9%, while non-food sales excluding toys increased by 6.2%, boosted by warmer weather and innovation ahead of summer. Tesco’s online sales were up 11.5 percentage points.
“Our online business reported very strong growth as we continue to benefit from the launch of same day fulfillment options,” Murphy added.
