Investors punish UK food and high street retailers over Christmas retail updates

A few Christmas retail trading updates have arrived today.

Tesco (TSCO), UK’s largest supermarket, reported a 3.2 percent rise in sales over the crucial Christmas period. Its share of the total grocery market stands at record levels.

More importantly, the £27 billion Group expects “to deliver FY 25/26 Group adjusted operating profit at the upper end of the £2.9bn to £3.1bn guidance range we issued in October.” In other words, Tesco is delivering steady revenue growth and solid profit generation.

Still, the market is not impressed. Tesco’s share slumped by more than 5 percent in mid-morning trades. A potential top formation is unfolding.

For Greggs (GRG), the nationwide sausage and bakery chain, it too reported fourth-quarter sales growth of 7.4 percent.

Even with 2,739 shops currently under management, Greggs aims to open another triple-digit net new stores this year. The company is confident that growth will continue this year despite that “market conditions remain challenging”.

Like Tesco, investors aren’t impressed by Greggs’ latest sales update. Its stock price plummeted nearly 9 percent in early afternoon. This potentially affirms its cyclical downtrend.

Next, we turn to Primark, the clothing chain owned by Associated British Food (UK:ABF).

In the trading update issued today, the company “delivered encouraging sales growth of around 3%, with like-for-like sales growth of around 1.7% in a difficult clothing market, particularly over Christmas. Primark gained market share in the period.”

But the worrying thing is that Primark expects ‘low single digit growth’ in 1H of 2026. Moreover, the firm had to “significantly increased markdowns to manage inventory levels effectively, which impacted profitability.” Not ideal.

Immediately, ABF’s share crashed almost 10 percent today. A gradual retracement to the lows is now possible.

Readers can see the charts of the above retailers below.

What caused all these price setbacks? Simply, the emergence of these key words: “challenging environment”, “difficult market”, “impact profitability” etc.

When investors hear these words, they tend to rush to the exit first because they can’t quantify how bad consumer-related trading conditions will be in the next few months. Profit forecast is one thing; actual revenue generation is another.

These updates also say something about the current UK consumer spending. It is tough, and may get even tougher in the months to come.