𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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Tesco is expected to reveal accelerating growth in recent months after a “soft” start to the year, according to analysts.

The supermarket giant has strengthened in recent years under the leadership of Ken Murphy, pushing the group’s share of the UK grocery market close to its strongest level for a decade.

Latest data from Worldpanel, released last month, indicated that Tesco holds a 28.1% share of the grocery market, surpassing its two largest rivals, Sainsbury’s and Asda, combined.

However, investors will hopeful that the company points to a more positive trajectory for the rest of this year in its half-year update on October 8 after slower growth in the first quarter.

In June, the group reported weaker-than-expected sales growth, at 1%, for the three months to end of May.

Bosses said sentiment among shoppers had been impacted by the situation in the Middle East, although it had not yet seen price inflation linked to the conflict.

Sales for the quarter had also been dampened by a tough comparable period a year earlier and unfavourable weather conditions.

Experts have suggested that better conditions over the summer, including warm weather, will help drive stronger growth for the rest of the half.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Tesco heads into next week’s half-year results on the back of a soft first quarter.

“With these challenges easing over the period, sales growth should have picked up, with markets forecasting first-half revenue to rise 3.1% to £37.2 billion.

“Expect recent market share gains to have continued over the first half, with initiatives such as Aldi Price Match and the expanded Finest range allowing Tesco to compete across a broad range of price points.”

Tesco is also outline its current expectations for food inflation, amid predictions that higher energy prices will soon drive an acceleration in price inflation.

The group is therefore likely to indicate whether it will invest further to keep prices low or if it might pass more inflation onto customers in a bid to support profit growth.

It most recently guided towards adjusted operating profits between £3 billion and £3.3 billion for the full year.

Bosses could also address speculation that the retailer could sell its operations in continental Europe to focus further on the UK and Ireland.

Danni Hewson, AJ Bell head of financial analysis, said: “Investors will be looking for Tesco to address rumours it is planning to sell off its Central and Eastern European operations.

“Having previously pursued a very diversified strategy, Tesco has narrowed its focus to good effect in recent years and exiting these markets would very much be in line with that direction of travel.”