SHARE OF THE WEEK: Tesco set for first quarter replace

Tesco will be in the spotlight next week and there are plenty of reasons to be optimistic.

Britain’s biggest grocer increased its market share to 27.6pc last month – up from 27.1 per cent a year ago – while its nearest rival Sainsbury’s trails behind on 15 per cent.

So investors will be hoping Tesco’s first quarter update on Friday puts even more clear water between it and the rest of the chasing pack.

Analysts at Jefferies expect the supermarket’s UK and Ireland retail business to grow by 4.3 per cent in the three months to May. That would reflect a slightly weaker performance, having reported an 8.8 per cent rise the year before. 

Last time round, Tesco’s overall sales hit £14.8billion in the first quarter a year ago.

Analysts said another key number to note is whether Tesco still thinks it will have £2billion of free cash flow pumping around the business this year.

They wonder whether some of this cash pile could be handed back to investors in the shape of a special dividend.

Tesco recently revealed that boss Ken Murphy (pictured) took home record-breaking pay of nearly £10m in 2023 – more than double the £4.4m he collected the year before.

A positive update on Friday could provide a much-needed boost to Tesco’s share price – which has gained 6 per cent so far this year.