RBC Wary of Tesco's Performance Amid Unfavorable Market Share Metrics

08:49 AM EDT, 08/10/2026 (MT Newswires) -- RBC Capital Markets is wary of Tesco's (TSCO.L) performance but not "too concerned" yet over market share trends that recently turned negative, according to the research firm's European Retailing report published Monday. "Tesco has performed very well in recent years, supported by impressive operational management amidst high UK food inflation. But inflation is moving within a fairly moderate range now, and so the focus has returned to market share growth. We are conscious that Tesco will likely make some proactive decisions should its market share metrics remain unfavourable into the end of the year, which would cause sector-wide disruption," analysts said. "We think it is wise to be wary and hence we have a preference for attractively valued continental European grocers, such as [Carrefour] and [Jerónimo Martins]." RBC noted that the drivers of Tesco's earnings growth look "less clear cut" now as the British retail giant puts more emphasis on growth from noncore operations after seeing a "very strong" performance at its core food business in recent years. The sector perform-rated stock has a price target of 5 pounds sterling.