Tesco unveils £750m share buyback scheme

Tesco said the scheme will begin immediately with the purchase of shares of an aggregate value of up to £250m. The supermarket giant said any further tranches of the buyback programme, up to a value of £750m, will be announced subsequently.

Citigroup will undertake the first tranche of purchases on Tesco’s behalf, and the grocer said it has been given the ability to make trading decisions independently of the retailer.

Shares acquired will be sold on to Tesco and will either be cancelled or held in treasury, as is common with other share buyback schemes across retail.

The buyback announcement comes a week after the UK’s largest retailer widened profit forecasts for the current financial year.

Chief executive Ken Murphy said the business was doubling down on its commitment to help keep down the cost of the weekly shop. It comes after the Food and Drink Federation predicted that food inflation will reach over 9% by the end of 2026.

As a result, Tesco expects to deliver an adjusted operating profit of between £3bn and £3.3bn for its current financial year and is targeting a further £500m of savings this year through its Save to Invest programme.

The updated guidance came after the supermarket chain reported an 8.5% increase in pre-tax profit to £2.4bn during the 53 weeks to February 28, 2026. Operating profit jumped 10.1% to £2.98bn in the period, but on an adjusted basis, edged up 0.6% to £3bn.

However, Murphy also warned of the potential impact of the ongoing war in the Middle East and the effect that might have on commodity and food prices.

He said: “We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever.

“Over the last year, despite cost pressures from new regulations, we have increased our investments in keeping prices low, further improving quality and offering even better service. Customers are choosing to shop more with us as a result, leading to our highest market share for over a decade.”