Tesco Sales Growth Cools Amid Middle East Uncertainty

Tesco reported a deceleration in UK sales growth for the first quarter, with like-for-like figures rising just 1.8% in the 13 weeks ending May 30. Despite missing analyst expectations of 2.3%, the retail giant maintained its annual profit guidance, signaling resilience against broader economic pressures and shifting consumer spending habits.

Editorial·June 18, 2026·reads: 2,348

Tesco Sales Growth Cools Amid Middle East Uncertainty

The company, which commands over 28% of the British grocery market, faced a difficult comparison against the same period last year when sales surged 5.1% due to favorable weather conditions. Management pointed to regional instability in the Middle East as a primary driver of ongoing customer uncertainty, noting that energy price fluctuations continue to strain household budgets across the retail sector.

Despite the cooling growth, Tesco reaffirmed its target for an adjusted operating profit between £3.0 billion and £3.3 billion for the fiscal year ending February 2027. This outlook aligns closely with the £3.152 billion reported for the 2025/26 period, even as some analysts had projected a slightly higher figure of £3.25 billion. Investors appear largely unfazed by the quarterly dip, with company shares climbing 15% over the past year.