The Union flag is as much Scottish as it is English. And Northern Irish. Only the Welsh could really say it wasn't that representative as it has none of the attributes of their home nation flag.
Wales has no representation in the Union Flag because Wales, having been annexed by Edward 1st in 1282 was recognised as a part of the Kingdom of England. The flag is made up of the St Andrews cross, St Georges cross and St Patricks cross.
Tesco are an English company, albeit one that bullied their way into every country they operate in by dubious means and hostile takeovers, so I suppose they have the right to sell 'England related' stuff if they so wish.