Tesco PLC

BofA Securities has named Tesco and Marks & Spencer as its two buy-rated top picks in its latest Pan European Food Retailing report, citing resilient grocery demand, strong execution and further growth opportunities. The broker kept price objectives of 540p for Tesco and 440p for M&S. For Tesco, BofA forecasts second-quarter group revenue growth of 2.6%, with UK sales up 2.6%, and first-half adjusted operating profit of £1.73 billion, up 1.5% year on year, implying a 10 basis point margin contraction; it raised its FY27 to FY29 EPS estimates by around 1%. For M&S, BofA expects first-half revenue to rise 13% to £8.98 billion, with adjusted PBT of £396 million versus £184 million a year earlier, and upgraded its Food sales forecasts to £19.1 billion for FY27 and £20.0 billion for FY28, increases of 3% and 4.3% respectively. The broker flagged Fashion, Home & Beauty as the main area of caution, saying the next phase of the turnaround will be more demanding, but maintained its buy rating and 440p price objective with Food as the primary driver of valuation upside.

Tooru PLC CEO Scott Livingston said the company's growth is accelerating as its OAF and Pulsin brands gain retail traction, after the group generated more than £1 million of EBITDA from its operating businesses in the first half. Livingston told Proactive's Stephen Gunnion that OAF has secured additional stores with Tesco and Asda after meeting key performance indicators during its trial period, though he noted the brand remains in a relatively small number of stores across both retailers and that early conversations are under way with other chains. He also said Pulsin has returned to positive cash flow and EBITDA after earlier challenges, with strong demand and growing European distribution supporting a cautious shift from a defensive approach back towards growth. Following a fundraise of nearly £1 million, Tooru is assessing potential acquisitions, targeting wellness and natural-product businesses that fit its existing portfolio, serve similar consumer demographics, and could benefit from its manufacturing capabilities. For the second half of 2026, Livingston identified three priorities: increasing OAF distribution with major retailers, expanding Pulsin's European reach, and pursuing suitable acquisitions.

Supermarket bosses are calling for Andy Burnham to set legally binding targets to increase the proportion of fruit and vegetables grown in Britain by 2040. The chief executives of Tesco, Waitrose, Sainsbury's, Aldi and the Co-op have written to the Prime Minister warning that wildfires and extreme weather are putting Britain's food supplies at risk. At least half of the nation's imported fruit and vegetables currently come from countries facing extreme water scarcity, the bosses warned. The letter, drafted by the Food Foundation and signed by more than 100 organisations including Danone and Greencore, urges the introduction of a good food bill that would require local authorities to plan for continued food supplies during extreme weather and mandate consideration of food security across government decisions. It also calls for legally binding targets on reducing childhood obesity and increasing children's fruit and vegetable consumption.

Tesco is considering the sale of its central and eastern European operations, according to reports. The Financial Times reported that the UK's largest supermarket group is exploring a move to find a buyer for the division and focus further on its core UK and Ireland operation. A Tesco spokesman said the company never comments on rumour or speculation. The European arm, which employs around 22,000 people across 56 stores in Hungary, the Czech Republic and Slovakia, saw sales grow by 0.8% to £1.14 billion in the quarter to the end of May. A potential sale would cement the group's focus on the UK and Ireland, and bring an end to previous ambitions to be a global retail giant.

Asda has posted pre-tax losses of £989m for the latest financial year, up from £599m a year earlier, as sales fell 3.4% to £25.9bn. The results include £284m in losses tied to Project Future, the programme to separate its IT systems from former owner Walmart, and a £384m impairment from property revaluation. Executive chairman Allan Leighton, appointed in November 2024, has launched a price war that contributed to a 33.3% drop in earnings before tax to £761m, but the supermarket’s market share has slipped to 11.5% from 12.3% a year ago. Asda, owned by TDR Capital and the Issa brothers since 2021, said the reported loss does not reflect underlying financial strength and highlighted £1.3bn in cash and £2.1bn in total liquidity.