Tesco Leverages Rapid-Delivery for Competitive Advantage

• Whoosh sales jumped 47% year-on-year in the 19 weeks to January 3, contributing to Tesco's 11.2% total online sales growth and 37% online grocery market share
• The UK quick-commerce market was valued at £2.4 billion in 2025 and is forecast to grow at 10.1% annually through 2030, benefiting Tesco after rivals like Getir exited
• Despite strong execution, Tesco trades at a significant valuation discount (15x forward earnings vs. Walmart's 40x+), with investors citing limited U.S. appreciation for UK grocery dynamics

Summary: Tesco Leverages Rapid-Delivery for Competitive Advantage

Key Developments:

Tesco's rapid-delivery service Whoosh has transformed from a competitive threat into a significant growth driver, with sales surging 47% year-on-year over the 19 weeks ending January 3, 2026. The service added over 250,000 new customers during this period, contributing to Tesco's 11.2% overall online sales growth.

Operational Scale:

Whoosh operates from 1,600 Tesco stores (including 180 large outlets), reaching over 70% of UK households with delivery in as little as 20 minutes. Tesco leverages delivery partners Uber Eats, Just Eat Go, and Stuart, while staff handle picking and packing in-store. The company commands approximately 37% of the UK online grocery market.

Market Context:

The UK quick-commerce market was valued at £2.4 billion in 2025, with forecasted compound annual growth of 10.1% through 2030. Tesco gained competitive advantage as rapid-delivery startups like Getir (which acquired Gorillas and Weezy) retreated from the market by 2024. Traditional rivals Sainsbury's, Asda, and Ocado offer competing services but lack Tesco's financial resources.

Strategic Positioning:

Tesco aims to reclaim 30% of the UK's £250 billion ($341 billion) grocery market, up from its current 28.4% share. The company holds approximately 50% of all UK grocery market profits, according to investors. Despite strong performance, Tesco trades at roughly 15 times forward earnings—a significant discount to U.S. competitor Walmart's 40+ times multiple.

Investment Outlook:

Top investors view Tesco's market dominance as sustainable, noting highly leveraged competitors and limited price war risk. CEO Ken Murphy maintains a cautious approach despite the company's momentum.