CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Tesco share price set to remain strong during uncertain times

Despite recent dips on the Tesco share price chart, the overall outlook remains positive for the retail sector’s bastion of resilience.

Tesco shares continue to make positive headway as the UK emerges from the Covid-19 crisis. Although Prime Minister Boris Johnson’s mandate that facemasks must be worn in all shops could cause a temporary drop in footfall, Tesco remains the proverbial darling of the retail world. Indeed, with the so-called ‘accounting errors’ of 2014 now a distant memory, the company has used its network of stores to good effect during the pandemic.

Stocking and restocking shelves faster than its peers and an abundance of emergency staff allowed first quarter (Q1) sales to surge by 8% to £13.4 billion. However, with increased costs, the full-year outlook is 'like to be at a similar level to 2019-2020'. That prediction has caused the Tesco share price chart to show a degree of inconsistency in recent weeks. From a high of 232p on 29 June, Tesco shares dropped to 211p on 9 July.

Tesco share price bullish amid continued uncertainty

However, since then, the retailer’s stock has risen. As the markets closed on 27 July, the Tesco share price was sitting at 220p. The recent bullish trend is yet another sign that, despite short-term fluctuations, the company’s outlook is strong. Covid-19 isn’t going away any time soon and, in some respects, it will never go away. Businesses may be forced to alter the way they operate indefinitely, and if recent weeks have shown us anything, it’s that Tesco is able to react and adapt better than most.

With an eye on the future, Tesco recently announced it will stop using outside contractors for certain cleaning tasks. With overheads peaking in May, the company is now trying to cut costs while maintaining proper levels of hygiene where it can. As a result, staff in 1920 of Tesco’s Metro and Express stores will be given new cleaning duties. The money-saving initiative may spark controversy in some quarters, but it’s another example of Tesco’s willingness to innovate at a time when businesses are struggling.

Ability to adapt keeps Tesco shares buoyant

Another sign that long-term success could be on the horizon for Tesco’s share price is an increase in online sales. During a five-week period at the start of the pandemic, Tesco doubled its online capacity. That move saw online sales increase by 90% in May and level out at an average of 48.5% during Q1. For the first time, Tesco is becoming as much of a force in the digital retail sector as the high street. In a post-Covid world, this could be telling. Even with CEO Dave Lewis departing in September, Tesco has shown its resilience in recent months.

It's this underlying strength that’s seen analysts predict a Tesco share price target of 273p. For those looking to invest, now could be the right time. Given what we know, Tesco is better equipped to deal with the unknown than its peers. Although life appears to be returning to normal, the threat of further lockdowns remains in place. Across the US, states are reverting to strict safety measures, and there’s nothing to suggest the UK won’t have to follow suit in the future.

If that’s the case, Tesco has the power to remain a bastion of consistency. What’s more, it’s already adapting to a world after Covid-19. Therefore, as an option, it offers the type of long-term promise investors look for. Does that mean Tesco shares are a dead cert? In a time of unknowns, certainly not. However, if there are more troubles ahead, it’s one of the retailers we know has the power to prosper in the midst of a crisis.

How to trade stocks with IG

Looking to trade the Tesco and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Tesco’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.