Tesco and Sainsbury's Shares Rise as Buyback and Grocery Update Support Sector

Tesco and Sainsbury’s shares climbed on Thursday, driven by Tesco’s ongoing buyback and Sainsbury’s upbeat quarterly trading update.

Tesco (LSE:TSCO) and Sainsbury’s LSE:SBRY) shares moved higher on Thursday, as markets responded to Tesco’s continuing share buyback and a strong quarterly update from Sainsbury’s earlier in the week.

Tesco shares are trading at 470.5p, up 2.4% from Wednesday’s close of 459.3p. Sainsbury’s shares are trading at 336.5p, up 1.8% from Wednesday’s close of 330.6p. Both stocks are among the stronger performers in the FTSE 100 on Thursday, even as the wider index has traded largely flat this week.

X testing X

WELCOME BONUS - Free Share Bundle When You Invest £50! Get up to £500 cashback for investing with IG.

Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply.

5.0

Open Account Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Sainsbury’s Update and Tesco’s Buyback

Sainsbury’s issued a first-quarter trading update on Tuesday, reporting sales up 3.1% to £8.04bn, with grocery sales up 3.6% to £7.6bn. The retailer said hot weather had boosted demand for barbecue and ready-to-eat food, and it reaffirmed guidance for operating profit of between £975m and £1.07bn for the year.

Tesco’s share price has been supported by its £750m buyback programme, which the company says is now 65.5% complete, with £491.3m spent so far. The continued repurchase of shares has reduced the free float and provided steady demand for the stock even without a fresh trading update this week.

Analysts have increasingly framed the two grocers’ resilience as part of a broader “ecosystem war” within UK retail, with rival Asda continuing to lose ground. Asda reported losses of £989m and a market share decline to 11.5%, down from 12.3%, extending a period of underperformance that has left Tesco and Sainsbury’s better placed to gain custom. Analysts remain broadly positive on Tesco but more mixed on Sainsbury’s.

With Sainsbury’s guidance already reaffirmed and Tesco’s buyback set to run through the rest of the year, the next test for both grocers will be their full-year results, when markets will look for confirmation that market share gains stemming from Asda’s troubles are translating into sustained profit growth.