Tesco, Britain's biggest retailer, has started a programme to buy back shares with a value of up to £500 million ($686 million).
When it published half year results on 6 October, Tesco said that it could afford to start a multi-year share buyback.
At the time Tesco CEO Ken Murphy denied the buyback was a tactic to ward off private equity bidders.
Rivals Asda and Morrisons have both succumbed to private equity bids this year.
Tesco said Citigroup will repurchase shares on its behalf.
On 6 October, the retailer raised its full-year earnings forecast after the unmatched scale of its store and online operations helped it outperform rivals in the first half and deliver a better-than-expected 16.6% increase in profit.
British retailers are battling supply chain disruptions and labour shortages. Supermarkets also face tough comparisons against record sales during COVID-19 lockdowns.
Tesco, however, increased sales in the period.
"We've had a strong six months; sales and profit have grown ahead of expectations, and we've outperformed the market," said chief executive Ken Murphy.
"With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset."
The group said that the strong performance had enabled it to cut net debt by £1.7 billion ($2.3 billion) since February, so it could afford to buy back shares, with the first £500 million to be bought by October 2022.