2025’s so far been a great year to own Tesco (LSE:TSCO) shares. Looking at its latest growth figures, the retail giant’s performance has beaten analyst expectations. And when combined with £700m of share buybacks and a further £500m of planned repurchases, it’s not so surprising to see Tesco shares climb by 15.6%, or 18.7% for investors who have been reinvesting their dividends.

These gains are currently outpacing the FTSE 100‘s 14.3% total return over the same period, making Tesco stock pickers notably better off versus passive index investors. And for every £1,000 invested, they now have up to £1,870 to enjoy.

But now the question becomes, is it too late to consider buying Tesco shares today?

Resilience against budget operators

Across the first three months of its 2026 fiscal year (ending in January), Tesco achieved £16.4bn in total sales, with like-for-like sales up 4.6%. For reference, most analysts were expecting these numbers to be at £16.1bn and 3.9% respectively. And with the company reiterating full-year guidance, the group’s upward momentum continued.

Digging deeper, it seems the primary driver of this growth stems from smart strategic decisions by leadership. By introducing more Clubcard offers and price-matching schemes, Tesco’s helped curb the defection of its budget customers to value retailers like Aldi and Lidl.

However, at the same time, the company’s also ramped up its range of premium offer with Tesco’s Finest. This achieved two objectives. Firstly, it allowed Tesco to lure customers from more premium supermarket chains like Waitrose. And secondly, it introduced higher-margin products in the retail mix, supporting stronger earnings growth. And the overall impact’s clear when looking at the latest market share data from Kantar.

Tesco continues to hold the crown with a resilient 28.4% of the market under its control – a much stronger performance compared to many of its rivals.

Still room to grow?

Being a popular FTSE 100 stock, Tesco currently has a lot of coverage from institutional investors. And for the most part, the outlook appears to be fairly bullish. JP Morgan‘s placed a share price target of around 450p, Citigroup is at 460p, and Deutsche Bank is more optimistic at 470p.

That suggests Tesco shares could deliver up to another near-10% gain by this time next year (before dividends), driven by continued like-for-like sales growth, market share resilience, and improved profitability.

However, like all investments, there are risks to consider. Most notably, there’s still the threat of a new potential price war among the big four. Asda’s threat of price undercutting sparked some volatility back in March. And while Tesco’s financials look strong, pricing competition will undoubtedly take a toll that could result in missed earnings targets and a shift in investor sentiment.

In this scenario, Tesco shares could struggle to keep up with analyst forecasts. But in the long run, I remain confident in the firm’s ability to defend its market share. That’s why, despite the risks, investors seeking exposure to the retail sector may want to consider taking a closer look at this business.