Tesco’s market dominance slips as rivals gain ground and shoppers rein in spending

By the Editorial Team · Wednesday, September 16, 2026

Tesco's market share in the UK grocery sector fell from 24.5% to 24.1% over the past year, with slower sales growth compared to rivals like Marks & Spencer, Lidl, and Ocado. This decline coincides with rising food price inflation and shrinking household budgets, which are expected to increase competitive pressures among supermarkets.

Tesco’s hold on the British grocery market has weakened as competitors gain traction and consumers limit their spending amid rising food prices. Industry data covering the summer period shows the country’s largest supermarket saw its market share decline from 24.5 percent a year earlier to 24.1 percent, while the volume of products sold also decreased, suggesting tighter household budgets.

Over the 12 weeks ending September 6, Tesco’s sales increased by 2.4 percent, lagging behind the overall grocery market growth of 3.9 percent. In contrast, other major retailers reported stronger gains during the same period. Marks & Spencer’s food sales surged 14.8 percent, lifting its grocery market share from 3.7 percent to 4.1 percent. Lidl expanded its market share to 7.7 percent from 7.4 percent, growing sales by 8.2 percent, while Ocado reported a 14.2 percent increase.

The changing market dynamics coincide with a reversal in the downward trend of grocery price inflation. Food prices rose by 2.3 percent in the four weeks ending September 6, up from 2.1 percent in August and marking the first increase since February, when inflation peaked at 4.3 percent. This inflation uptick arrives amid widespread concerns about the cost-of-living squeeze facing UK households.

Andy Burnham, mayor of Greater Manchester, has prioritized easing living costs since taking office in July, implementing measures such as VAT reductions on electricity bills and caps on bus fares. Despite such initiatives, the Food and Drink Federation has forecast food price inflation to peak at 6.4 percent by next July, signaling continued pressure on consumers.

The recent food price increases contributed to a 2 percent rise in supermarket sales in the month ending September 6, according to market analytics from Worldpanel. Industry analysts indicate that sustained inflation is likely to compel retailers to intensify price competition as shoppers adjust their spending habits.

Tesco was contacted for comment but had not responded at the time of publication.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.