Summary
Tesco has embraced the challenge posed by fast-delivery upstarts and turned it into a strategic advantage. Its Whoosh service - store-to-door grocery delivery in as little as 20 minutes - is rolling out across the supermarket's estate and helping lift online sales. The shift follows a period of consolidation in the quick-commerce sector that left space for established retailers to deepen their fast-fulfilment offerings.
How Tesco moved from threat to advantage
Five years after Tesco’s chief warned that rapid-delivery entrants could cause "death by a thousand nibbles" to traditional grocers, the company has repositioned itself by building its own ultra-fast channel. Whoosh, which promises deliveries within about 20 minutes, now operates from 1,600 Tesco stores, including 180 larger-format outlets, enabling coverage of more than 70% of UK households. Orders are picked and packed by Tesco staff inside stores and handed to delivery partners - Uber Eats, Just Eat Go and Stuart - to complete the final mile.
Rob Graham, Tesco’s online director, told Reuters the retailer had been able to scale the service quickly by using existing store infrastructure and integrating Whoosh into Tesco’s broader offer. He said Tesco recently introduced the option to schedule Whoosh orders. "We have seen growth in the number of items customers are buying and the number of times they use Whoosh, and our customer satisfaction scores are growing at the same time," he said.
Performance and market backdrop
Whoosh’s momentum is measurable. Over the 19 weeks to January 3, Whoosh sales increased 47% year-on-year, and the service added more than 250,000 customers. Tesco’s overall online sales rose 11.2% in the same reporting period, and the company holds roughly 37% of the UK online grocery market.
The quick-commerce landscape has evolved rapidly. During the COVID pandemic, cities such as London saw an influx of grocery couriers, but that boom faded as mounting losses and higher capital costs forced consolidation and exits. Some players retrenched; for example, Turkey-based Getir acquired Gorillas and Weezy but exited the UK by 2024. Those retreats opened room for Tesco to press into fast fulfilment while competitors like Sainsbury’s (Chop Chop), Asda (Asda Express Delivery) and Ocado (Zoom) also expanded their offerings. Yet none of those rivals matches Tesco’s scale and financial firepower, and Amazon was said to be testing an ultra-fast service in the market.
Why Whoosh matters strategically
Tesco’s research indicates that most Whoosh purchases are incremental to in-store trips rather than substituting them, suggesting the service can drive additional sales rather than merely shift demand between channels. The Institute of Grocery Distribution estimated the UK quick-commerce market at 2.4 billion pounds in 2025 and projected a 10.1% compound annual growth rate to 2030, lifting quick-commerce’s share of online grocery deliveries from 9.1% to 11.9% over that period.
The relative success of Whoosh also highlights Tesco’s ability to adapt where some other strategic bets have been cut back; for instance, moves into banking and financial services were later scaled down.
Market share ambitions
Tesco’s UK grocery market share peaked at 31.6% in December 2007, before the rise of German discounters Aldi and Lidl intensified price competition. As of January, Tesco’s share stood at 28.7%, a 20 basis-point increase year-on-year according to Worldpanel by Numerator. Tesco has informed suppliers it intends to regain a 30% share - a level last achieved in 2013 - and several major investors consider that target attainable. Kunal Kothari, UK equity portfolio manager at Aviva Investors, a top-20 Tesco shareholder, said: "It’s conceivable over a number of years to get there by just doing what they have done. There’s no reason why they cannot continue to grow share at 20, 30 basis points a year."
Valuation, investor views and competitive risks
Despite a 16% rise in Tesco shares year-on-year, the stock still trades at a significant discount to some global peers. Walmart, for example, was trading at over 40 times forward earnings versus Tesco’s roughly 15 times. Julian Bishop, co-lead portfolio manager at the Brunner Investment Trust, another major Tesco investor, said the market may undervalue Tesco’s position: "We think Tesco have about 50% of all the profit in the UK grocery market. They’re in a very strong position, in control of the market."
Ben Preston, fund manager at Orbis Investments and also among Tesco’s top-20 investors, downplayed the likelihood of a damaging price war given the balance-sheet leverage of rivals such as Asda and Morrisons, but stressed a different threat: the risk Tesco could lose focus and execution edge, which might allow competitors back into contention. He said: "The bigger concern is they just lose focus, lose their execution edge and somehow allow competitors back into the game."
Outlook and management tone
Entering 2026 with the Whoosh rollout gaining traction and online sales benefiting from faster fulfilment, Tesco appears determined to maintain momentum while managing risks. Chief executive Ken Murphy’s long-standing caution remains a guiding principle - "Don’t get too cocky."
(Exchange rate used in reporting: $1 = 0.7332 pounds)
Key takeaways
- Tesco has rapidly scaled its Whoosh ultra-fast delivery service using its store network and third-party couriers, achieving broad household reach and notable sales growth.
- Whoosh contributed to an 11.2% increase in Tesco’s total online sales over the referenced period and saw a 47% year-on-year sales rise in the 19 weeks to January 3, adding over 250,000 customers.
- Tesco seeks to regain a 30% share of the UK grocery market, supported by incremental online demand and investor confidence, though its shares trade at a discount to some global peers.
Risks and uncertainties
- Competition and market dynamics: While rivals and new entrants have retreated or consolidated, competitors continue to develop their own fast-delivery options and Amazon has been reported to be testing similar services, which could alter the competitive landscape.
- Execution risk: Tesco’s growth depends on maintaining operational focus and execution; investors highlight the danger that loss of focus could allow competitors to regain ground.
- Sector profitability and leverage: Some rivals, notably Asda and Morrisons, remain highly leveraged, which can shape competitive behaviour and industry dynamics.
Contact the newsroom for clarifications on the figures and quotes included in this report.