Tesco Expected To Raise Profit Outlook After Strong Performance During Summer

Analysts anticipate that Tesco will upgrade its full-year profit guidance when it posts its first-half results on Thursday, having benefited from the good summer weather.

Industry data published by Worldpanel by Numerator (formerly Kantar) earlier this month showed Tesco winning more market share than any other major grocer in the UK. Its sales climbed 7.7% over the 12 weeks to 7th September, its strongest rate since December 2023, giving it a market share of 28.4%, up 0.8 percentage points compared to the same period last year.

In June, the group forecast adjusted operating profit for the year ending February 2026 of between £2.7bn and £3.0bn, down from the £3.13bn achieved in 2024/25.

“We expect a modest lift of the guidance range, perhaps to £2.8bn to £3.0bn, at FY reflecting the strong H1 performance, (and) reflecting a customarily cautious stance,” analysts at Jefferies said.

On average, analysts are forecasting £2.95bn for the full year and £1.56bn for the half year.

Tesco said in April that it expected profit to fall in its 2025/26 year as it set aside cash to deal with a step-up in “competitive intensity” – a reference to a pledge of sustained price cuts from Asda in an effort to win back market share.

However, Tesco’s strategy of price-matching Aldi on hundreds of key items, together with its Clubcard Prices promotion, has helped it maintain its momentum and see off competition from its rivals.

Shares in Tesco are up 20% so far this year, but analysts also noted concerns about the sector more broadly, including rising food inflation, the possibility of further tax rises in the government’s November budget, declining wage growth, and a weakening jobs market.

NamNews Implications:

• Given economic and political uncertainties, cautious optimism is understandable.
• The issue is how to preserve consumer perception of everything possible being done to manage on-shelf inflation.
• Meanwhile, Asda is surely proving to be less of a threat than anticipated.
• And there are limits to Aldi and Lidl’s capabilities in terms of depth of cuts.
• All making Tesco a safe bet for suppliers and the City…

Asda Reportedly Planning Another Range Overhaul

Asda has invited key suppliers to a ‘reset’ conference on 7th October, which is thought to be a precursor to a significant range overhaul as part of the struggling supermarket’s turnaround plans.

A report by The Grocer noted that Chairman Allan Leighton has already cut the number of brands in the Asda range and is now seeking to attract brands to become partners in the next phase of its range shake-up.

The meeting is expected to see the group’s returning Chief Commercial Officer, Darren Blackhurst, outline plans for a “commercial reset” of the business, sparking speculation that he is planning another review, similar to the one he carried out when he last held the role from 2006 to 2010.

The Grocer revealed that the invitation sent out to UK sales directors last week invites them to attend Asda’s Merchandising Centre of Excellence in Leeds, stating plans to “put customers at the heart of everything we do”.

A supplier source is quoted in the report as saying: “The speculation is that Blackhurst will be looking for suppliers to get on the bus. We think he will be looking to do exactly as he has done in the past with the infamous John West vs Princes Tuna, where one got delisted and the other got the whole pie.

“And the rumour is that it’s not just about 2026. There will be an ask for Q4 2025. This is where experience comes in handy: we have been on this merry-go-round a few times.”

The Grocer noted that despite Asda stressing it regularly holds supplier conferences at the venue, the fact that sales directors have been given only three weeks’ notice of the event has increased speculation about its intentions.

“They do have fairly regular conferences, but not at this short notice and not aimed specifically at sales directors,” said another supplier.

Meanwhile, Ged Futter, a former Asda buyer and founder of The Retail Mind, who previously worked under Blackhurst, commented: “We have seen Blackhurst do this before at Asda with the less is more strategy. Now he’s got his feet back under the table, this is clearly Asda making a call to arms for suppliers for the next financial year, and suppliers will be expecting more of the same.

“The trouble for Asda is that the retail world is in a very different place to what it was in 2006. Just look at the share Aldi and Lidl had then. Back then, Asda owned price.

“Leighton has already tried to a certain extent to do this already this year. It makes sense for them, now they’ve hired people like Blackhurst and Eyre to be putting them out in front of suppliers. But I fear that Asda will be out to achieve the impossible.”

NamNews Implications:

• You have to admit, Asda keep trying…
• Given Asda’s race against the clock, most things have to be at short notice…
• This is really about brands’ willingness to compete i.e. a probable ‘one in, one out’ policy…
• …with a brand coming on board, wondering how a rival brand will retaliate elsewhere.

Chinese Retail Giant Preparing For Full Launch Of Online Store In The UK

JD.com, one of China’s largest retailers, is recruiting for more than 150 jobs in the UK in preparation for a full commercial launch of its online store Joybuy, which sells a wide selection of both grocery and general merchandise products.

The company unveiled a beta of the site in April. Initially, the website took orders from consumers in select London postcodes, offering a range of ambient and frozen foods, household products, baby items, beverages, personal care, beauty, health, pet supplies, and nicotine products from major brands. Hundreds of Morrisons own-label food and drink lines are also available. Other categories added since include electronics, home appliances, and home & living.

To help establish the UK operation, JD.com assembled an experienced team of UK grocery buyers and category executives who had previously worked for retailers such as Sainsbury’s, Asda, Tesco, Ocado, and Amazon.

According to The Grocer, JD.com is hiring for roles covering multiple functions, including its growing network of UK warehouses and distribution centres as well as head office roles such as category manager, data analyst, accountant, developer, and user experience designer.

This will increase JD.com’s current UK 250 full-time headcount by 60%, + more employed on a contract basis.

JD.com in The Grocer said: “Joybuy is JD.com’s online retail business in Europe, dedicated to creating a more joyful shopping experience for our customers.

“Our service in the UK is currently in the beta testing phase, but we’re continuing to recruit great people to create an amazing customer journey, as we build towards our full commercial launch later this year.”

JD.com has been in inconclusive talks to acquire Sainsbury’s Argos, suggesting they have big plans for the UK.

JD.com were online-only but now has over 10,000 retail outlets and an annual turnover of more $150bn. It has also diversified into sectors such as technology, logistics, and healthcare.

In recent years, they have been expanding outside China, establishing operations in several EU countries and across Asia. The Joybuy brand has already been rolled out in Belgium, France, Germany, and Luxembourg.

In July, JD.com launched a €2.2bn offer for German electronics retailer Ceconomy, which runs more than 1,000 MediaMarkt and Saturn stores across Europe. The deal is expected to be completed in early 2026.

JD.com previously weighed a bid for UK-based consumer electricals chain Currys but withdrew its interest in March last year.

NamNews Implications:

• A new kid (with significant potential) is arriving on the block…
• (Hint, hint: ‘one of China’s largest retailers’)
• Suppliers getting in early may find it fractionally easier than playing catch-up later.
• Your colleagues in the EU and China should be able to add substance to your case for action
• ...inside and outside your company...
• Over to you…

Tesco Wins Most Market Share; Battle Between Own-Label And Brands Continues

Latest figures from Worldpanel by Numerator show take-home sales at UK grocers grew by 4.8% over the four weeks to 7 September versus last year, with like-for-like grocery price inflation nudging down from 5.0% to 4.9%.

“Prices might not be climbing quite as quickly, but they’re still on the rise and the battle between own-label lines and brands continues as household finances remain tight,” said Fraser McKevitt, head of retail and consumer insight at Worldpanel.

Supermarket own lines now make up 51.2% of all sales, up from 50.9% a year ago. Sales of these products grew by 5.9% during this period, just ahead of brands at 5.3%. However, premium own-label goods remained the real standout performers, with sales increasing by 10.3% – making it six months in a row that they’ve risen by double digits.

McKevitt noted that brands are holding ground in some categories, including toothbrushes, frozen chicken and baby toiletries, showing that “consumers still value well-known names across some very different parts of the store.”

Autumn signalled a return to work and school for many households, impacting what people bought at the supermarket. In the two weeks to 7 September, sales of lunchbox staples shot up among families with children compared to the previous fortnight. Spending on yogurt rose by 26%, sliced cooked meats by 17% and cheddar cheese by 24%. McKevitt highlighted that while sandwiches remain a popular lunch option, featuring in over half of kids’ lunchboxes, they are disappearing from some school bags as alternatives like cooked poultry become more popular.

Looking at individual retailers, Tesco gained more market share than any other grocer in the 12 weeks to 7 September, now accounting for 28.4% of all sales, up 0.8 percentage points compared to the same period last year. The UK’s largest grocer saw growth across all channels, with spending up 7.7% – its highest rate since December 2023.

Ocado was once again the fastest-growing retailer, with sales rising by 11.9%. It outpaced the wider online market, which was up by 8.2% over the 12 weeks.

Spending through the tills at Sainsbury’s increased by 5.4%, taking its portion of the market up to 15.1%. Asda continued to lose share after recording a 2.7% drop in sales, while Morrisons recorded growth of just 1.4%.

Lidl was the fastest-growing bricks & mortar retailer, with sales up 11.0%, increasing its share from 7.8% to 8.2%. Aldi held its 10.7% share with a sales uplift of 4.7%.

Spending at Waitrose grew 4.3%, while sales of groceries at M&S increased 5.9%.

NamNews Implications:

• Food price inflation remains high, with more Autumn taxes in the pipeline…
• The resulting drift from brands continues…
• …affecting the size of brand premia and thereby the high cost to brands of winning back former loyals.
• Premium own-label sales increasing by 10.3% has to be a major concern to brand leaders in this regard.
• Meanwhile, the combined discounter share of 18.9% has to be of concern to those affected by the drift from mults to Aldi & Lidl.
• While Asda is still in a race against the clock…

Hundreds of Jobs At Risk At B&Q

B&Q has placed more than 670 roles across its business into consultation as part of streamlining efforts.
According to trade publication Retail Week, the business is seeking to reduce the number of deputy manager, trading manager, and team leader positions across its 318 stores and head office.

If the DIY retailer’s plans are approved, 672 roles will be cut, mainly across its stores, while a further 65 will be from its head office.

The report noted that B&Q is consulting with workers impacted by the cuts and is set to offer alternative roles or support packages to staff who cannot be provided with a new position.

B&Q CEO Graham Bell is quoted as saying: “Over the last few years, we’ve evolved at pace to ensure that we can give our customers the very best retail experience. We’ve physically changed our operations so that our stores, apps and online are fully integrated, helping home improvers by giving them more choice, speed and convenience. And we need to keep changing.

“In this dynamic world of retail, we are very much in control of shaping our future. Today’s news would ensure that we continue to evolve and grow market share, by prioritising our resources where we can help our customers most.”

He continued: “The proposals shared with colleagues today – to simplify our retail leadership structure and reallocate time to customer service roles on the shop floor, and to change some head office teams – have meant some difficult choices.

“They impact our dedicated colleagues in retail leadership across all of our stores and in head office functions, and we’ll be doing everything we can to support them.

“Ultimately, it is about setting our business up in the right way so that our colleagues are equipped to give our customers consistently exceptional customer service now and in the future, so that we give home improvers the choice and convenience they deserve.”

B&Q saw its sales increase by 0.4% on a like-for-like basis during its second quarter, which ended on 30 April, supported by a strong performance in e-commerce and the trade segment.

The business experienced improved volume trends in its core categories, particularly tools & hardware, as well as building & joinery. However, this was partially offset by weak sales performance in ‘big-ticket’ categories as consumers remained reluctant to fork out on expensive products amid cost-of-living pressures.

NamNews Implications:

• When demand falls, retailers have to cut to fit profitable opportunity.
• Meaning reduction in staff numbers or sale of outlets.
• Each of which reduces the investment appeal of the retailer to branded suppliers.
• Lower staff numbers can mean lower service level.
• Whilst fewer outlets can mean less access to markets.
• What really matters is perceived impact on shopper loyalty.
• Ask again in six months…

WH Smith Media Fees Of Up To £125k Branded ‘Astronomical’ By Retail Experts

WH Smith is charging brands “astronomical” amounts of money to advertise in its travel stores that they will never see a return on, according to retail experts.

After challenger brands spoke out about the high cost of ‘media packages’ pitched to them by WH Smith last week, a sales deck for 2025 shared with

The Grocer shows the retailer is demanding as much as £125k for two weeks of advertising in a single store location.
 
NamNews Implications:

• Retail is regarded as a ‘try it and see’ environment.
• But this is meant to refer to selling to consumers.
• Successful suppliers are long accustomed to fact-based selling…
• (and subjecting any investment to strict ROI criteria)
• Only natural for them to use the same criteria in moving from a selling…
• …to a buying role in the case of purchasing Retail Media.
• So, back to the price drawing board for WH Smith…
• …or suffer the inevitable consequences.

M&S Food Appoints Blakemore As New Wholesale Partner To Help Improve Availability

M&S Food has appointed A.F. Blakemore & Son as its new primary wholesale partner for third-party branded products.

The move brings to an end M&S’s 15-year+ branded supply deal with Tesco-owned Booker.

M&S stated that the partnership with the SPAR wholesaler will help deliver a “more consistent and reliable shopping experience for customers as M&S continues its journey to become a shopping list retailer”.

Blakemore will deliver directly to M&S’ regional distribution network with a new seven-day-a-week service “ensuring freshness and exceptional quality”.

Under the multi-year agreement, the West Midlands-based family-owned business will supply a selection of branded goods to complement M&S’s own label offer. The retailer noted that the new daily delivery service, with consolidated chilled and ambient supply, will improve product availability and increase operational efficiency.

M&S highlighted that the move underlined its food division’s long-standing commitment to family-owned businesses. Around 20% of its suppliers are family-owned and operated.

Alex Freudmann, Managing Director at M&S Food, commented: “We are thrilled to be backing another British family business, working with A.F Blakemore & Son as our new, trusted wholesale partner.

“Blakemore will be providing an improved wholesale solution with a full seven-day-a-week service that will increase availability for our stores and customers. As we reshape our business for growth and focus on improving availability and efficiency, choosing the right, trusted partners who can deliver on that is key.”

Carol Welch, the wholesaler’s CEO, added: “At A.F. Blakemore & Son we are committed to delivering consistent quality, agility, and service, and it’s a privilege to partner with M&S to help accelerate growth of their Food business.

“This partnership reflects the advances made in our wholesale and food service capabilities and the significant investment in our infrastructure and product ranging.”

NamNews Implications:

• In unprecedented times, ‘outsource to experts, who can perform at less cost’.
• Allowing the business to focus on strengths…
• Meanwhile, the Blakemore service will focus on improving product availability and increasing operational efficiency…
• …by way of justifying the move from Booker.

Aldi Takes Back ‘Cheapest Supermarket’ Crown From Lidl

The latest price comparison by consumer watchdog Which? shows Aldi was the cheapest supermarket in the UK in August, regaining the top spot from its key rival.

Last month, Lidl claimed the coveted ‘cheapest supermarket’ crown after narrowly beating Aldi for the first time since October 2023.

The new data for August shows that the total price of a basket of 75 everyday grocery items came to £127.92 at Aldi, which is 38p cheaper than fellow discounter Lidl, even when deals on its loyalty scheme are included.

Julie Ashfield, Chief Commercial Officer at Aldi UK, commented: “We’re delighted to once again be recognised by Which? as the UK’s cheapest supermarket.

We are committed to providing shoppers with the best possible value, but not only that, we’ve gained this title while always ensuring our product quality remains consistently high.”

Asda was the cheapest of the traditional supermarkets, with the same list of groceries costing £139.42, even though it doesn’t offer loyalty discounts in the same way as its rivals.

NamNews Implications:

• What is really at issue here is that discounters continue to be significantly cheaper than the mults….
• …and are growing share…
• …despite loyalty cards.
• Raising the question re how long shoppers will be willing to pay 35% more for Waitrose quality?

hashtag