Tesco reported a growth in market share to 28.7% and an increase in UK like-for-like sales by 3.9% in Q3 and 3.2% over Christmas. The company adjusted its full-year operating profit forecast to the upper range of \u00a32.9bn to \u00a33.1bn. However, its shares fell, testing the long-term 200-day moving average, a potential indicator of a trend change if the price drops further.<\/p>\n
Sainsbury’s experienced a decline in share price despite posting a 3.9% rise in Q3 sales and a 3.3% increase over Christmas. Grocery sales were strong, but the Argos division saw a decline of 1% in Q3 and 2.2% over Christmas. The unchanged outlook on operating profits was over \u00a31bn, while cash flow forecasts improved to more than \u00a3550m. Speculation surrounds potential spin-off plans for Argos.<\/p>\n
Primark owner, Associated British Foods, faced negative market reactions due to a 2.7% decline in Q1 like-for-like sales, particularly in Europe with a 5.7% drop. Total sales growth was at 1%, but profits are expected to fall below last year\u2019s figures. The share price sits at a support level of around 1,800p, indicating uncertainty.<\/p>\n
Tesco and Sainsbury have managed to grow despite cost-of-living challenges, maintaining their positions against competitors like Aldi and Lidl. Both are holding their places as major players in the UK grocery market even in the face of current share price challenges.<\/p>\n
The market’s negative response to strong updates from Tesco and Sainsbury’s is puzzling. Tesco’s price is now testing its 200-day moving average and the 407p lows we saw back in August 2025, which acts as a critical support level. For traders, this presents an opportunity to sell out-of-the-money put options, betting that this technical floor will hold against the surprisingly bearish sentiment.<\/p>\n
Similarly, Sainsbury’s shares fell despite strong grocery sales, seemingly due to weakness in its Argos business. The stock is now finding support near its own 200-day moving average and the 300p lows from December 2025. This dip could be an overreaction, making call options an interesting play if you believe the grocery performance is the real story and support holds.<\/p>\n
Investor nervousness likely stems from broader economic data, which clouds the outlook for retailers. While the latest ONS figures showed headline inflation fell to 3.1% in December 2025, food inflation has remained stubbornly high at 5.2%, squeezing margins. Furthermore, the GfK consumer confidence index for December 2025 remained deeply negative at -21, suggesting shoppers are still very cautious about spending. <\/p>\n
In contrast, Associated British Foods has seen its share price punished for genuinely weak numbers, with its price now sitting on key support around 1,800p. Since all the bad news may now be priced in, this level is a crucial line in the sand. If the stock can hold above its 2025 lows, it could signal that the selling pressure is exhausted for now.<\/p>\n
The main signal from these movements is rising uncertainty, which is often reflected in higher implied volatility. This makes options strategies like straddles attractive for traders who expect a significant price move in either direction but are unsure of the catalyst. The key is to watch whether these major support levels break or if they serve as a base for a rebound in the coming weeks.<\/p>\n
Looking back, we saw throughout 2025 how effectively Tesco and Sainsbury’s defended their positions against discounters like Aldi and Lidl. Kantar market share data from late 2025 showed their growth came mostly at the expense of competitors like Morrison’s and Asda. This historical resilience suggests that the current share price weakness may not reflect the longer-term strength of their market positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Tesco and Sainsbury grow despite challenges; profit forecasts steady, but share prices signal investor caution.<\/p>\n","protected":false},"author":62,"featured_media":16993,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38749","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38749"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16993"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}