The group, whose share of Britain’s grocery market has grown this year to 28.4%, said it now expected full-year 2025/2026 adjusted operating profit of between £2.9 billion and £3.1 billion (US$3.9 billion-US$4.2 billion), up from previous guidance of between £2.7 billion and £3 billion.

Tesco made £3.13 billion in 2024/2025.

UK like-for-like sales in the first half were up 4.9%, having been up 5.1% in the first quarter.

“Competitive intensity remains elevated,” Tesco said.

“However, in the first half, a better-than-expected customer response to our actions and the benefit of an extended period of good weather have helped offset the cost of our investments,” it said.

Tesco had said in April it expected profit to fall in its 2025/2026 year as it set aside cash to deal with a pledge of sustained price cuts from Asda, the number three player, which has been losing market share.

However, no price war has materialised and Tesco’s shares have risen 17% so far this year.

Industry data published by market researcher Worldpanel last month showed Tesco winning more market share than any other UK grocer.

CEO Ken Murphy said those gains “reflect the decisive action we took at the start of the year to further invest in value, quality and service”.

Analysts say Tesco’s strategy of matching the prices of discounter Aldi on over 600 items, together with heavy promotion of its Clubcard loyalty scheme, which provides lower prices for members, is driving growth.

Tesco is also becoming increasingly digital, stepping up personalised engagement with customers and developing growth avenues such as its online Marketplace platform and retail media.

First half adjusted operating profit rose 1.5% to £1.67 billion.