Like several others FTSE100 shares, Tesco (LSE:TSCO) has emerged from the wild and has generated market-beating returns over the last few years.

So much so that a £10,000 investment made half a decade ago to buy 4,444 shares would be worth around £20,800 today. Moreover, shareholders enjoyed growing dividends, adding a further £2,300 to the total.

A further £431 of these shares will be payable later this month when Tesco pays its final dividend for FY26.

There is therefore no doubt that the investment in the leading supermarket in Great Britain has been a huge success during this period. But what do FTSE 100 shares look like today?

Why did Tesco shares soar?

There isn’t a single reason why the company’s stock has been doing so well lately (it’s up about 53% in just two years). Rather, I believe it is a combination of many factors.

Firstly, Tesco is strengthening its competitive position, achieving its highest market share in over a decade. It has maintained its lead with strategies such as Clubcard pricing, Aldi Price Match and expanding its everyday low price range.

This refutes the idea that discount stores Aldi and Lidl can rob customers. Meanwhile, Amazon closed its grocery stores in the UK and the threat of swift grocery delivery apps turned into an opportunity, with its own Whoosh service increasing sales by 51% last year.

Crucially, Tesco has masterfully navigated the inflationary environment in recent years, using its enormous scale to keep costs low and remain competitive. It also saves over £500 million a year in internal costs, helping to maintain stable margins.

We strive to reduce the cost of your weekly shop.
CEO Ken Murphy, April 2026

Finally, the supermarket is aggressively buying back its own stock. As of October 2021, it had repurchased £4.3 billion worth of shares at an average price of 317 pence per share. The current price is around 470p, which indicates an effective allocation of capital.

Where are we now?

Looking ahead, competition in the industry is here to stay, so there is likely to be a natural ceiling on Tesco’s market share. Inflationary pressure on buyers’ budgets also remains a constant risk.

All in all, it’s tough not to be impressed by Tesco’s scale. In addition to supermarkets, it owns Booker, the UK’s leading food and drink wholesaler, and One Stop, which has over 1,000 convenience stores.

Another thing worth mentioning is the amount of consumer data that Tesco has on over 24 million Club Card households. Brands pay Tesco for access to anonymous, first-hand information, with a partnership recently announced with Headquarters will apply artificial intelligence to personalize customers’ online experiences and better reward their loyalty.

Tesco shares are obviously not as budget-friendly as they once were, but a forward earnings multiple of 14 for FY28 (starting at the end of February) doesn’t seem too costly. The forward dividend yield is 3.4%.

I don’t see the stock doubling again any time soon. However, I expect it to perform well in the medium term, driven by steady, profitable growth supported by continued share buybacks.

For me, Tesco is a high-quality blender with zero risk of AI disruption. I think it’s worth considering with the stock down almost 8% from its recent high.

Finally, investors should pay attention to the upcoming Q1 2027 trading announcement, which will be released on Thursday (June 18).

Is it worth investing £5,000 in Tesco Plc now?

If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.

Mark believes there are 6 standout stocks that investors should consider buying right now. Want to check if Tesco Plc is on the list?

Ben McPoland has no position in any of the companies mentioned.