Tesco PLC (LSE:TSCO) is expected to continue eating up market share as the supermarket sector enters a “normalised environment”, analysts at Citi believe.
Shares in the country’s largest supermarket lifted by more than 2% on Friday after its first-quarter results highlighted market share gains and volume growth.
Citi analysts reacted positively to the report, pointing to its core UK business posting like-for-like sales growth of 4.6% ahead of expectations for a 4.2% jump.
As the industry continues to normalise after the cost-of-living crisis and high inflation, experts at the US bank believe Tesco will continue to pick up market share from its already high perch of 27.6%.
Tesco has been able to increase its foothold in the industry for four consecutive quarters after it lifted by 59 basis points in the first three months of the 2025 financial year.
Citi’s forward-looking guidance remains mostly unchanged, with full-year underlying earnings expected to rise by 3%.
Sales estimates were tweaked lower by 0.2%, while earnings per share forecasts were increased by 0.1%.
Overall Citi remains a buyer of the supermarket’s stock and expects the market’s reaction to be “neutral to slightly positive”.
Last week, analysts at Shore Capital said Tesco was now a "consummate cash compounder, with admiration and growing respect."