Tesco raised its full-year profit forecast on Friday after first-half sales grew 2% to £33.8bn, with underlying profit climbing 6.5% to £1.8bn for the 26 weeks ending 29 August. The UK's largest grocer attributed strength partly to robust online trading and expansion of delivery slots.
The retailer predicts strong Christmas spending despite what it characterises as household reluctance to buy alcohol. Tesco said consumers are shrugging off "uncertainty" over the Iran war, suggesting the grocer expects resilient demand heading into the peak trading season.
Online sales drove the half-year performance. The company is increasing delivery capacity to meet demand.
Tesco's raised profit guidance signals management confidence that consumer spending will hold firm through the end of 2026, even as geopolitical tensions persist. The shift toward lower alcohol consumption at Christmas reflects either changing shopper preferences or Tesco's read of demand signals in its transaction data.