Upmarket Finest range helps lift Tesco sales, amid UK ‘home dining boom'

The Guardian

12-06-2025

Households treating themselves to Tesco's upmarket Finest range have helped lift sales at the UK's biggest supermarket, with analysts suggesting high restaurant prices could be driving a home dining boom.
Sales of the high-end own-brand line jumped 18% in the first quarter, while fresh food purchases were also boosted by shoppers enjoying picnics and barbecues in the sunny spring weather.
Tesco's UK stores recorded a 5.1% increase in like-for-like sales in the 13 weeks to 24 May, while the chain also grew its market share during the period as it fought off competition from rivals including the discounters Aldi and Lidl.
The retailer said it had worked on its pricing to bring in more customers, and matched prices at Aldi on more than 600 items. 'The market remains intensely competitive, and we are committed to ensuring customers get the best value in the market by shopping at Tesco,' said its chief executive, Ken Murphy.
Retail analysts pointed to the success of the supermarket's own brand offering. Dan Lane, of Robinhood UK, said that in an increasingly tough trading environment, Tesco's Finest range had become 'something of a secret weapon' to entice cash-strapped shoppers to spend on more premium items.
'Staying sensitive to purse strings and giving customers the chance to spend up is vital in an inflationary environment,' Lane said. 'Shoppers looking to trade down from increasingly expensive restaurants are opting for the premium offering at home instead – 18% growth tells us the strategy is working.'
Tesco's results come at a time when supermarkets are fighting over customers amid a challenging trading environment. Asda is trying to turn around several years of weak trading by cutting its prices.
At the same time, grocery price inflation is on the rise again, having jumped to 4.1% in May, the highest level in 15 months, driven by the rising cost of items such as butter and chocolate, according to Kantar. It found that shoppers are increasingly looking for discount deals and turning to supermarket own-label products as a way to manage their budgets.
The mounting cost of dining out, even for a casual meal, is weighing on consumers, said Clive Black, head of consumer research at Shore Capital.
'A lot of families are finding that going out mum, dad plus the kids for pizza and a beer is £100, and they can get much better value by going to a supermarket. We have seen premium private label demand at M&S, Sainsbury's and Tesco manifest some of that,' said Black.
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While the discounters have continued to grow their share of the grocery market in recent months, their upmarket rival Marks & Spencer has also seen an increase in spending on groceries, despite its recent difficulties caused by a cyber-attack.
'Tesco has successfully fought off discount rivals Aldi and Lidl and protected its dominant UK market position, yet at no point can it take its foot off the pedal,' said Russ Mould, investment director at broker AJ Bell.
'The moment Tesco relaxes is the point at which rival operators pounce on the opportunity to eat some of its lunch.'