Five years after Ken Murphy, CEO of Tesco, warned that rapid-delivery startups could pose a significant threat to Britain’s major supermarkets, the UK’s leading food retailer has transformed this challenge into a competitive advantage. The company’s fast-delivery service, Whoosh, which promises store-to-door grocery deliveries in as little as 20 minutes, is expanding swiftly and contributing significantly to online sales.
During the COVID pandemic, cities such as London saw a surge in grocery couriers, leading to a temporary boom in delivery services. However, as losses mounted and capital costs increased, many startups faced consolidation or exited the market altogether. Turkey-based Getir acquired competitors Gorillas and Weezy but ultimately withdrew from the UK by 2024. This shift in the market landscape has allowed Tesco to deepen its penetration into fast fulfillment, utilizing its extensive store network and robust advertising to capture consumer demand.
While traditional rivals such as Asda, with its Asda Express Delivery, and Ocado with Zoom, have attempted to create similar offerings, none possess the financial strength of Tesco. With Amazon also experimenting with its own ultra-fast service, Tesco sees a unique opportunity to reinforce its dominance in the fiercely competitive £250 billion ($341 billion) grocery market in the UK.
Whoosh operates from 1,600 Tesco locations, including 180 larger stores, thus reaching over 70% of UK households. Tesco staff handle the picking and packing of orders, with deliveries facilitated by partners like Uber Eats, Just Eat Go, and Stuart. Rob Graham, Tesco’s online director, highlighted the efficient growth of Whoosh, stating that the service integrates seamlessly into Tesco’s broader offerings. Recent enhancements include the option for customers to schedule deliveries, contributing to a rise in both the number of items purchased and overall customer satisfaction.
Over the past 19 weeks leading to January 3, Whoosh experienced a 47% year-on-year sales increase, acquiring more than 250,000 new customers. Tesco’s total online sales also grew by 11.2%, capturing approximately 37% of the UK’s online grocery market. The Institute of Grocery Distribution estimates the value of the UK’s quick-commerce market at £2.4 billion in 2025, projecting a 10.1% annual growth rate through to 2030, which will potentially boost its share of online grocery deliveries from 9.1% to 11.9%.
Tesco’s adaptability is exemplified by the growth of Whoosh, with research indicating that most Whoosh purchases are additional to in-store shopping. However, not all ventures have succeeded; some expansions into banking and financial services have been scaled back.
In terms of market strategy, Tesco is working to reclaim a 30% share of the UK grocery market, a goal last achieved in 2013. Currently, its market share stands at 28.7%, up 20 basis points year-on-year, according to Worldpanel by Numerator. Major investors believe this aspiration is realistic. Kunal Kothari, a UK equity portfolio manager at Aviva Investors, noted that a gradual increase in market share over the years is plausible, given Tesco’s operational strategies.
Despite a recent 16% rise in share value, Tesco’s stock still trades at a significant discount compared to its global peers; Walmart’s shares exceed 40 times forward earnings, whereas Tesco sits around 15 times. Julian Bishop, co-lead portfolio manager of the Brunner Investment Trust, remarked on Tesco’s strong position within the UK grocery market, claiming that the retailer holds about 50% of all profits in the sector.
Ben Preston, a fund manager at Orbis Investments, expressed confidence that a damaging price war is unlikely, especially considering the heightened leverage of rivals Asda and Morrisons. However, he warned that Tesco must maintain focus and execute its strategies effectively to fend off potential competition.
With a positive momentum entering 2026, Tesco remains committed to maintaining its competitive edge. Murphy’s guiding principle continues to resonate: “Don’t get too cocky.”
