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How to Buy Tesco Shares UK for Beginners

Tobi Opeyemi Amure
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How to Buy Tesco Shares UK for Beginners

In a nutshell, to buy Tesco shares in the UK, start by selecting a reputable brokerage that offers access to the London Stock Exchange, where Tesco shares are listed. Open a trading account with the chosen broker, providing necessary personal and financial information. Once your account is set up and funded, search for Tesco’s ticker symbol ‘TSCO’ on the trading platform. Then, you can place an order to buy the desired number of Tesco shares, choosing between different types of orders based on your investment strategy.

Interested in buying Tesco Shares in the UK?

I’ve created an easy-to-follow guide that will walk you through the process, ensuring you make a well-informed investment in one of the UK’s leading retail giants.

This article was reviewed by Tobi Opeyemi Amure, a trading expert and writer at InvestopediaInvesting.com, and Trading.biz.

How to Buy Tesco Shares in the UK – Step-by-Step Guide

Here’s a simple step-by-step guide to help you invest in Tesco shares.

1. Choose a broker

Select a reputable broker that offers access to the London Stock Exchange (LSE), where Tesco PLC is listed. Compare brokers based on fees, ease of use, customer service, and the tools they offer.

2. Open a trading account

Register for an account with your chosen broker. This process typically involves providing personal details for identity verification, such as your name, address, National Insurance number, and banking information.

3. Deposit funds

Fund your trading account. Most brokers accept various funding methods, including bank transfers and debit/credit card payments. Ensure you deposit enough to cover your intended Tesco share purchase, accounting for any applicable fees.

4. Research Tesco shares

Before buying, conduct research on Tesco PLC. Look into its recent share performance, financial health, market news, and analyst reports. This information will help you make an informed decision about your investment.

5. Place an order

Once your account is funded and you’ve done your research, navigate to the trading platform and search for Tesco’s ticker symbol, ‘TSCO’.

Decide on the number of shares you want to buy and select the type of order (e.g., market order, limit order). Review and confirm your order.

6. Monitor your investment

After purchasing Tesco shares, regularly monitor your investment. Keep an eye on Tesco’s performance and relevant market news that could impact the stock price.

Adjust your investment strategy as needed based on your financial goals and market conditions.

7. Selling your shares

If you decide to sell your Tesco shares in the future, you can do so through the same broker.

Simply enter the selling interface on the platform, specify the number of shares to sell, and execute the sale.

Best Place to Buy Tesco Shares UK

In 2023, around 2 in 5 Brits (42%) invest and trade, up from 36% in 20211.

Choosing the best trading platform for investing in Tesco shares is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest UK stock brokers in the market.

Using my experience in this field, I’ve picked two of the best places to buy Tesco shares in the UK.

Factors such as fees, commissions, usability, trading platforms available, research tools, educational materials, and additional features were considered.

Both of the platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or similar.

1. eToro – Overall best place to buy Tesco stock UK

eToro – Overall best place to buy Tesco stock UK

eToro is highly recommended for UK investors looking to buy Tesco shares, distinguished by its user-friendly interface, low-cost structure, and comprehensive trading options.

As a multi-asset platform, eToro offers 0% commission on real stocks, making it a cost-effective choice for purchasing shares like Tesco’s.

Setting up an account on eToro is quick and straightforward, appealing to both beginners and experienced traders.

The platform supports various deposit methods including debit/credit cards, e-wallets, and UK bank transfers, with a reasonable minimum deposit requirement of £50.

eToro is regulated by the FCA and covered by the Financial Services Compensation Scheme (FSCS), which offers investment protection up to £85,000, ensuring a secure trading environment for your investments.

Besides stocks, eToro provides access to a range of other assets, such as ETFs, indices, forex, and commodities, allowing for portfolio diversification.

It also features advanced tools like ProCharts for in-depth technical analysis and various risk management tools to protect your investments.

In summary, eToro presents itself as an ideal platform for buying Tesco shares in the UK, combining ease of use, a range of trading tools, and the security of being FCA-regulated.

Its commission-free structure and the option for fractional share investing make it accessible and appealing to a wide range of investors.

Read my complete eToro review.

Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.

2. Plus500 – Good for trading Tesco CFDs

Plus500 – Good for trading Tesco CFDs.

Plus500 stands out as an ideal platform for trading Tesco stock CFDs in the UK, offering a blend of user-friendly features, advanced trading tools, and robust regulatory compliance.

As a popular CFD broker, Plus500 is known for its wide market access and competitive trading conditions.

Plus500 provides access to a vast array of international markets, including numerous stocks from the UK, US, and other global exchanges.

Notably, it offers commission-free trading on its supported stock markets, which extends to various asset classes like indices, ETFs, forex, and commodities.

The platform is equipped with advanced trading tools that allow traders to control their profits and losses effectively. Traders can leverage their investments up to 1:5, amplifying the potential returns while also increasing risk.

Plus500 also includes features like predefined Stops and Limits, and a Guaranteed Stop feature to mitigate risks.

Plus500 is authorised and regulated by the FCA, ensuring high standards of safety and compliance. The platform keeps clients’ funds in segregated bank accounts, providing an additional layer of security.

Plus500 is a compelling choice for UK traders looking to trade Tesco stock CFDs, especially for those who value a user-friendly interface, a wide range of tradable assets, and a platform that is regulated by the FCA.

Its advanced tools and competitive pricing structure make it suitable for both novice and experienced traders.

Read my Plus500 review.

Frequently Asked Questions About Buying Tesco Shares in the UK

Here are some answers to some of the most asked questions regarding purchasing Tesco stock in the UK.

Can I buy Tesco shares in the UK?

Yes, you can buy Tesco shares in the UK. To do so, open an account with a UK-based broker that offers access to the London Stock Exchange, where Tesco shares are listed.

Look for brokers that offer low fees, user-friendly interfaces, and are regulated by authorities like the Financial Conduct Authority (FCA). Once your account is set up and funded, you can purchase Tesco shares through the platform.

Should UK investors buy shares in Tesco?

Deciding whether UK investors should buy shares in Tesco involves several considerations. Tesco, as a leading retailer in the UK, offers a potentially stable investment due to its strong market presence and consistent consumer demand.

The company’s performance in the stock market tends to reflect its operational success and adaptation strategies in the dynamic retail sector.

However, investors need to be aware of market risks, including competition within the retail industry and broader economic factors that can impact consumer spending and retail sales.

Additionally, it’s important to analyse Tesco’s financial health, including its revenue streams, profit margins, and growth strategies, to gauge its long-term viability and potential for shareholder returns.

Is it safe to invest in Tesco?

Investing in Tesco, like any stock, carries inherent risks and potential rewards.

Tesco’s position as a leading retailer in the UK provides some degree of stability, but stock prices can still be affected by market fluctuations, competitive dynamics, and overall economic conditions.

It’s important for investors to conduct thorough research on Tesco’s financial health and market trends before investing.

As with all investments, consider your risk tolerance and investment goals to determine if Tesco is a safe option for your portfolio.

How to sell Tesco shares?

  1. Log in to your brokerage account where you hold Tesco shares.
  2. Navigate to the trading section and search for Tesco’s stock ticker, ‘TSCO’.
  3. Enter the number of shares you wish to sell and choose the type of sell order (e.g., market, limit).
  4. Review and confirm the transaction details.
  5. Execute the sale order and monitor the execution status.

Why invest in Tesco?

Investing in Tesco can be attractive for several reasons. As one of the UK’s largest retailers, Tesco holds a significant market share, offering stability and brand recognition.

The company’s continuous adaptation to consumer trends and its expansion into online retailing show a commitment to growth and innovation.

This adaptability has helped Tesco maintain its market position even during challenging economic times.

Tesco’s diverse range of products and services, including its move into finance and telecommunications, demonstrates its ability to diversify revenue streams, which is beneficial for long-term investment stability.

Additionally, Tesco’s commitment to sustainability and community initiatives can be appealing to socially conscious investors.

However, potential investors should consider the competitive nature of the retail sector and Tesco’s performance in relation to market conditions.

It’s important to research Tesco’s financial performance, including revenue, profits, and growth strategies, and align them with personal investment goals and risk tolerance.

In its 2022/23 financial year, Tesco’s annual revenue amounted to more than 60 billion British pounds in the United Kingdom and the Republic of Ireland. This was an increase of over three billion pounds compared to the prior financial year2.

What to consider before investing in Tesco shares?

Before investing in Tesco shares, several key aspects need consideration. Firstly, it’s crucial to analyse Tesco’s financial performance, including its revenue, profit margins, and growth prospects.

This assessment helps understand the company’s stability and potential for future growth.

Secondly, understanding the retail sector’s dynamics, including competition and market trends, is important.

This sector is highly competitive, and factors like consumer behavior, economic conditions, and technological advancements can impact Tesco’s performance.

Additionally, investors should consider Tesco’s strategic initiatives, such as its expansion into online retail and sustainability efforts. These strategies can influence the company’s long-term success.

Finally, aligning the investment with personal financial goals and risk tolerance is essential. Investors should weigh the potential risks and returns of investing in Tesco against their individual investment strategies.

How to buy Tesco shares UK for beginners?

  1. Choose a broker: Select a UK-based broker that offers access to the London Stock Exchange, where Tesco shares are listed.
  2. Open an account: Register for an account with the broker, providing necessary personal and financial details.
  3. Deposit funds: Add money to your brokerage account using accepted methods like bank transfer or debit/credit card.
  4. Research Tesco shares: Understand Tesco’s financial health, market position, and potential risks and opportunities.
  5. Place an order: Search for Tesco’s ticker symbol (TSCO) and buy the desired number of shares.
  6. Monitor your investment: Regularly track the performance of your Tesco shares and stay informed about market and company news.

What are the risks of investing in Tesco shares?

Investing in Tesco shares involves certain risks that need consideration. Firstly, market volatility affects Tesco’s stock prices, influenced by broader economic factors and stock market trends.

Secondly, Tesco operates in a highly competitive retail sector, where shifts in consumer preferences and market competition can impact its performance and profitability.

Another risk involves changes in economic conditions, such as inflation or recession, which can affect consumer spending and, consequently, Tesco’s revenue.

Additionally, Tesco’s global operations expose it to risks associated with currency fluctuations and international market dynamics.

Lastly, regulatory changes, especially in the retail and food industries, can pose challenges and impact Tesco’s business operations.

Investors should assess these risks in light of their personal investment goals and risk tolerance before investing in Tesco shares.

Is it worth buying one share of Tesco?

Deciding whether to buy a single share of Tesco depends on your investment goals and strategies. Purchasing one share can be a good starting point for beginners looking to enter the stock market with minimal risk.

It allows investors to gain experience in stock trading and understand market movements with a well-known company like Tesco.

However, it’s important to consider the transaction costs associated with buying a single share. These costs can sometimes outweigh the benefits if they constitute a large percentage of the investment, particularly for short-term investors.

On the other hand, for long-term investors, even one share can grow in value over time, contributing to a diversified investment portfolio.

What’s the best time to invest in Tesco stock?

Determining the best time to invest in Tesco stock requires considering several factors. First, keep an eye on Tesco’s financial performance, including earnings reports and growth projections.

Positive results and growth signals can indicate a good time to invest.

Market trends and economic conditions also play a crucial role. Periods of market downturns may offer buying opportunities at lower prices, whereas high market periods might mean higher stock prices.

It’s also important to consider Tesco’s business developments, such as new ventures or expansion plans, which could impact stock value.

Long-term investors might be less concerned with timing, focusing more on Tesco’s potential for steady growth over time.

What’s the minimum required investment for Tesco?

The minimum required investment for Tesco shares primarily depends on the share’s market price and the policies of the chosen brokerage platform.

If you’re buying whole shares, the minimum investment is equal to the price of one Tesco share, which fluctuates based on market conditions.

However, many brokers now offer the option to purchase fractional shares, allowing you to invest in Tesco with a smaller amount than the full share price.

With fractional shares, you can buy a part of a Tesco share for as low as a few pounds, depending on the minimum investment threshold set by the broker. This makes Tesco shares more accessible, especially for those with limited funds.

It’s also important to consider any additional fees or commissions that the brokerage might charge.

While some brokers offer commission-free trading, others may have transaction fees that could affect the overall cost of your investment, especially for small amounts.

Checking with your brokerage for specific details regarding minimum investments and associated costs is crucial before making an investment decision.

Final Thoughts

Buying Tesco shares in the UK can be a straightforward and potentially rewarding process for investors.

By choosing the right brokerage, understanding the minimum investment requirements, and considering the timing and risks involved with Tesco stock, you can make informed investment decisions.

Whether you are a seasoned investor or a beginner, Tesco shares offer an opportunity to invest in one of the UK’s leading retail companies.

Remember to align your investments with your financial goals and risk tolerance, and consider seeking professional advice for personalised guidance.

FAQs

Does Tesco pay dividends?

Yes, Tesco has historically paid dividends to its shareholders. However, the amount and frequency of dividend payments can vary based on the company’s financial performance and board decisions. It’s advisable for investors to check Tesco’s latest financial reports or investor relations website for up-to-date information on dividend policies and payouts.

What’s the cheapest way to buy Tesco stock?

The cheapest way to buy Tesco stock is through online trading platforms that offer commission-free trading, like eToro. On eToro, investors can purchase Tesco shares without incurring trading commissions, significantly reducing the cost of the transaction. Additionally, eToro supports fractional share purchasing, enabling investors to buy a portion of a Tesco share, which is ideal for those with limited funds. However, it’s important to be aware of any other potential fees, such as currency conversion charges, that may apply to the platform.

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Sources:

  1. https://www.finder.com/uk/investment-statistics ↩︎
  2. https://www.statista.com/statistics/490931/tesco-group-finance-revenue-united-kingdom-uk/ ↩︎

Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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