UK retailers to reflect on Q3 trading: Tesco, Marks & Spencer and Sainsbury's
The UK's largest retailers publish festive trading updates which are expected to show sales strength and increased in-store visits, though cost pressures and 2026 guidance will determine investor sentiment.
Festive trading reveals sector dynamics
As the UK's largest food and general merchandise retailers publish their third quarter (Q3) trading updates for the period covering the festive season, the results from Tesco, Marks & Spencer and J Sainsbury are expected to reveal consumer behaviour patterns and competitive pressures that shaped the end of 2025 and provide important signals ahead of full-year results.
Tesco's Q3 2026 update covering the third quarter to late November and the extended Christmas trading period on the 8th of January 2026 is expected to show continued resilience, reflecting both volume growth and successful promotional initiatives that attracted customers from competitors.
The underlying 2025 performance is likely to allow Tesco to record its highest market share in the UK since 2016, helped by competitive pricing, strong promotional execution and the continued strength of its Clubcard loyalty scheme.
Tesco maintains market leadership position
Retail segments such as fresh food and everyday essentials are expected to have also contributed to this growth, bolstering overall performance, following what Tesco described in 2024 as its "biggest ever Christmas" trading period.
With consumers responding well to promotional activity over the Christmas period - while official Christmas trading sales figures are yet to be released - early performance signals from loyalty card data and footfall metrics point to better-than-expected volume growth, particularly in chilled and fresh categories. Some analysts also note that Tesco’s price investment and simplification of promotional mechanics helped drive market share gains relative to rivals.
The market share achievement demonstrates Tesco's competitive strength in an intensely fought grocery sector.
Tesco analyst ratings
Fundamental analysts rate Tesco as a ‘buy’ and have a long-term mean price target at 137.92 pence, around 1% below the current share price (as of 05/01/2026).
Tesco LSEG Data & Analytics chart
Tesco has a TipRanks score of ‘7 Neutral’ but a ‘buy’ rating.
Tesco TipRanks Smart Score chart
Technical analysis of the Tesco share price
The Tesco share price – up around 18% over the past year – so far remains above its October-to-December 435.5p-to-433.5p support zone.
Were it to give way, the more significant 431.7p-to-428.2p support area may be revisited. It consists of the July 2025 peak and September-to-October 2025 lows. While it holds, the long-term uptrend is deemed to be intact.
Tesco daily candlestick chart
A rise above the 31 December high at 446.2p is needed, for the early October-to-early December highs at 456.6p-to-458.9p to be back in the frame. Once bettered, the November 2025 high at 480.9p – at levels last traded in January 2008 - may be back in play.
M&S transformation continues to deliver
Marks & Spencer trading statement for the same period, also published on the 8th of January 2026, is expected to highlight a strong festive season driven by its food and clothing businesses.
M&S’s premium food offering has historically outperformed in the festive season, and initial signs from third-party retail analysts and category data indicate that higher-margin seasonal lines (e.g., party platters, premium mains, luxury desserts) saw healthy uptake.
Although M&S does not publicly disclose detailed weekly sales, commentary from market trackers suggests that its differentiated product mix continues to appeal to shoppers seeking quality for special-occasion meals.
Despite robust trading, M&S may caution - as it did in late 2024 - that broader economic headwinds and cost pressures remain pertinent as the business continues its transformation journey under current management's strategic direction.
M&S analyst views and share price technical outlook
According to LSEG Data & Analytics, analysts rate M&S as a ‘buy’ and have a long-term mean price target at 427.86 pence, around 32% above the current share price (as of 05/01/2026).
M&S LSEG Data & Analytics chart
M&S has a TipRanks score of ‘4 Neutral’.
M&S TipRanks Smart Score chart
M&S share price technical analysis
The M&S share price – down approximately 15% over the past year – has seen an over 20% drop from its October 2025 peak at 411.8p and is sliding towards its key 319.4p-to-315.3p support area.
M&S weekly candlestick chart
As long as the December 2025 low at 315.3p doesn’t give way on a weekly chart closing basis, the August-to-January wide sideways trading range will stay intact.
Failure at 315.3p would likely lead to a swift fall towards the early August 2025 low at 299.5p and perhaps even towards the January 2024 high at 293.2p being witnessed.
Provided that support at 319.4p-to-315.3p holds, a recovery towards the 360p region and higher may well ensue in the coming months.
Sainsbury's extends Christmas dominance
Early festive trading commentary from Sainsbury’s highlights resilience in core grocery categories, with Christmas meal centres (e.g., turkey, party food, seasonal produce) performing solidly compared with last year.
Anecdotal reports from supply-chain partners and third-party retail insight suggest that Sainsbury’s benefited from targeted Christmas campaigns and price competitiveness, which helped sustain footfall even as consumer budgets remained under pressure from broader cost-of-living dynamics.
J Sainsbury's Q3 trading update on Tuesday 6th of January is expected to underscore its success in capturing grocery market share, driven by strong volume growth and value perception among customers seeking quality at competitive prices with the Nectar loyalty scheme contributing to customer engagement and repeat purchase behaviour.
Sainsbury’s analyst ratings and technical analysis of its share price
Analysts rate Sainsbury as a ‘buy’ and have a long-term mean price target at 350.00 pence, around 7% above the current share price (as of 05/01/2026).
Sainsbury's LSEG Data & Analytics chart
The Sainsbury share price – up around 18% over the past year – remains within a long-term uptrend while it stays above its early December low at 299.2p on a daily chart closing basis.
Sainsbury daily candlestick chart
Potential upside targets in this scenario are the November 2025 high at 360.4p - a level last seen in 2013 - followed by the psychological 400.0p region.
Were another down leg to unfold and the December trough at 299.2p to be slipped through, the medium-term technical picture would deteriorate and may lead to a decline towards the 289.0p-to-273.0p support zone ensuing. It contains the May and December 2024 highs and June 2025 lows.
Discounters Aldi and Lidl spillover effect
Although Aldi and Lidl are not FTSE-listed grocers, their continued share gains through 2025 may have influenced broader sector dynamics.
Pressure from discounters has nudged larger grocers to compete more aggressively on price and promotions, particularly in Christmas centrepiece and family meal categories.
This competitive environment appears to have supported overall basket sizes across major retailers.
Aldi UK reported a 3% rise in festive sales to £1.65bn in the four weeks to Christmas Eve 2025, driven by strong demand for its premium own-label range and a 5% weekly growth.
Rival discounter Lidl GB saw a 10% increase in festive sales, highlighting strong festive performance across grocers.
Forward guidance crucial for 2026 outlook
Looking ahead, investors and analysts will scrutinise how these trading trends translate into full-year performance and what they imply for 2026 guidance.
Tesco's ability to defend and grow market share through pricing strategies will be weighed against ongoing cost challenges, while M&S's focus on premium product offerings and store renewal will be assessed for sustainability beyond the Christmas spike.
For Sainsbury's, continued execution of value-led initiatives will be key to delivering on profit guidance.
Investment considerations for UK grocery exposure
For investors considering UK grocery retailers, the festive trading updates provide valuable insights into competitive dynamics.
- Research individual retailers' market positioning, strategic initiatives, and cost management approaches to understand different investment propositions.
- Consider how consumer spending trends and cost inflation might affect grocery sector performance in 2026.
- Open an account with IG by visiting our website and completing the application process.
- Access UK retail shares through our trading platform.
- Consider appropriate diversification given different strategic positioning across the sector.
Share dealing provides direct exposure to UK grocery leaders.
Spread betting and CFD trading offer flexible approaches for trading around updates.
These updates are expected to paint a picture of a market that remains robust despite macroeconomic headwinds.
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