Sainsbury’s Completes First Conversion Of Sites Acquired Last Year As Part Of Accelerated Store Opening Programme

Sainsbury’s has launched the first of 14 retail sites that it recently acquired for conversion into supermarkets, kick-starting its biggest store opening programme in over a decade.

The new supermarket opened in Felixstowe yesterday and is part of Sainsbury’s ‘Next Level’ strategy to offer “more food choice to more customers in more locations” across England, Scotland, and Northern Ireland.

Last autumn, the company snapped up 14 sites, which were predominantly former Homebase stores, and two outlets from East of England Co-op. Since then, Sainsbury’s has been working to convert them into new supermarkets, with the first in Felixstowe to be followed by a second in Brightlingsea later this year.

Combined with its organic store opening programme, the group expects to open 15 supermarkets during its 2025/26 financial period, and over the next two years, new openings will add over 400,000 sq. ft. of new space to its estate. It also plans to add another 25 new convenience stores in each of the next two years.

The new 19,000 sq. ft. supermarket in Felixstowe is Sainsbury’s first in the East Suffolk town and represents a multimillion-pound investment by the retailer. Its arrival means almost 23,000 more people in the area now live within a 10-minute drive of a Sainsbury’s supermarket.

“We were delighted to open our fantastic supermarket in Felixstowe today, putting Sainsbury’s on the doorstep of customers in the town for the first time,” said Patrick Dunne, Sainsbury’s Chief Property and Procurement Officer.

“It was also an exciting moment for our business as today’s launch marks the first of many brilliant new supermarkets we plan to open over the next two years, following our strategic decision to acquire 14 new sites for conversion into Sainsbury’s last year. Our bold plan is driven by our belief in the strength of Sainsbury’s offer and our commitment to bringing more of our delicious, high-quality and great value food within easy reach of more customers.

“We’ve worked diligently to transform the Felixstowe site into a new Sainsbury’s store in just a few months, and we will continue to convert many more of the sites we’ve acquired for launch over the next two years, as well as opening more new stores from our existing pipeline of purpose-built supermarkets.”

NamNews Implications:

• And being retail, initial results will have begun to flow.
• Pointing to a direction forward.
• Retail rivals now need to factor in 14 new compete-points with Sainsbury’s…
• …and appropriate action required from suppliers.

hashtag

Couche-Tard Advances Takeover Talks With Owner Of 7-Eleven

Alimentation Couche-Tard has made a significant advance regarding Seven & i, owner of the 7-Eleven convenience store brand, following long-awaited access to critical financial data.

Couche-Tard, owner of Circle K, has entered into a non-disclosure agreement (NDA) with Seven & i to “progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators”.

Couche-Tard has publicly asked for this access since its unsolicited bid last year, saying enhanced visibility into Seven & i’s financials could justify an increased offer, approaching $50bn.

Privately, both parties have attributed delays in progress to the other’s lack of cooperation.

Seven & i confirmed today that the NDA includes a “standstill” clause, a standard provision in mergers and acquisitions that prevents a hostile bid while confidential data is being exchanged.

“We appreciate the special committee of Seven & i engaging in substantive discussions regarding our proposal and providing access to diligence,” said Alex Miller, Couche-Tard’s CEO. “We look forward to working collaboratively with Seven & i in the interests of all stakeholders.”

In late 2024, preliminary and limited discussions via respective advisors started and they signed NDAs (allows a search for potential buyers of US stores likely to be divested to address regulatory concerns if a deal went ahead).

Seven & i shares were up 3.5% in Tokyo today, but well below the offer price (investor scepticism).

Seven & i are “pursuing two parallel paths” to maximise value for shareholders and stakeholders, also also striving to enhance its standalone valuation by divesting non-core assets, planning a partial listing of its North American operations, and executing a share repurchase programme exceeding $13bn.

They recently appointed Stephen Dacus as Chief Executive Officer, who was previously the chair of their special committee evaluating Couche-Tard’s proposal.

In Tokyo last week, Dacus affirmed their focus on increasing US investments, strengthening supply chains, and expanding its fresh food offerings, but the ongoing acquisition talks could be a potential distraction.

“At some point, you’ve got to make a decision, one way or another,” he said. “There’s still a lot of hurdles to clear … I suspect it’s going to take a while still, because there’s still some really serious things that need to be worked out.”

NamNews Implications:

• In agreeing to an exchange of confidential financial information…
• …it could be said that both parties are taking the possibility of a takeover seriously.
• (Albeit within the protection of a ‘standstill’ position and NDA agreement)
• Therefore, if the price is right, all will proceed…
• Meanwhile, suppliers and retail rivals will benefit by treating this as a done deal…
• …and exploring options and acting accordingly.
• (unless they prefer to risk awaiting the inevitable…)

hashtag

Morrisons Testing Shelf-Scanning Robots

Morrisons is trialling robots that can check for out-of-stock items, pricing errors, and misplaced products.

According to trade magazine The Grocer, the supermarket is testing the ‘Tally’ robots from US tech company Simbe at three stores. They are claimed to be the world’s first autonomous inventory bot, which uses advanced AI and computer vision technology to collect comprehensive product data by roaming the aisles in stores.

The robots are being tested in Morrisons stores in Wetherby, Redcar and Stockton. Katherine Allanach, technology manager at the retailer, told The Grocer that they are being used to “check that the products on the shelves are being displayed correctly and are legally compliant.”

She added: “It is a crucial but time-consuming task, and so Tally aims to allow more time for colleagues to focus on customer service.”

The report stated that Morrisons is the first UK retailer to invest in Simbe’s Tally robot, which can capture 15,000 to 30,000 products an hour. It self-docks to a charging port when needed.

Morrisons noted that feedback from customers and staff had been positive, with a spokesperson saying: “They have been intrigued and curious but very positive and colleagues in particular can see how supportive Tally could be.”
The robots are currently being used by retailers around the world, including Carrefour, Albertsons, ShopRite and Kroger.

A spokesperson for Simbe told The Grocer that Morrisons’ adoption of Tally was a major step in its drive to expand its global footprint, but also “validation that retailers around the world are increasingly turning to autonomous solutions to gain unprecedented visibility and address key operational challenges.”

NamNews Implications:

• This says it all:
• “Tally aims to allow more time for colleagues to focus on customer service”
• Which has to have a payoff in repeat shopper visits…
• …where items required are found on-shelf.
• Simple but difficult...
• A no-brainer…

Spending On Promotions In Supermarkets Hits Highest Level This Year

Latest Kantar: Take-home UK grocers sales up 6.5% (4 weeks to 20 April) - Easter later + uptick in promotions.

Sales rise because of 3.8% grocery price inflation vs recent low of 1.4%, Oct 2024.

Easter eggs spending up 11% vs 2024. Fraser McKevitt, head of retail and consumer insight at Kantar: “Chocolate confectionery prices rose by 17.4% this period, the fastest of any category, but that didn’t stop the British public treating themselves this Easter. The volume of chocolate eggs sold through supermarket tills still grew by 0.4% on last year, while at the dinner table, lamb was the most popular fresh meat joint, followed by beef and pork.”

Spending on promotion reached 29.7%, its highest level this year.

“The grocers have been sharpening their pricing strategies to stay competitive in the fight for footfall."

Price cuts were the main driver of promotional growth. Often linked to loyalty cards, spending on these deals up £347m. (Tesco and Sainsbury’s nearly 20% of items sold on price match, in 2/3 of baskets.)

“However, not just re price perceptions. Shoppers want quality too, particularly on special occasions, and we can track that, for example, in the rapid growth of premium own label in the latest four weeks at 23.2%.

"Retailers need to be seen to be offering great value, but it’s a fine tightrope to walk, particularly as they manage their own business costs.”

Lidl had fastest rise in footfall (12 weeks to 20 April) shoppers visits average of 8.8 times resulting in sales up 10.1%, to a 8.0% market share.

Aldi’s above-the-market sales growth of 5.9%, an 11.0% share.

Ocado was the fastest-growing retailer – held continuously for nearly a year – after its sales grew by 11.8%.

Spending on groceries at M&S grew by 14.4%.

Tesco’s sales increased by 6.0%, lifting its market share to 27.8%, while sales at Sainsbury’s rose by 4.4%.

Meanwhile, early signs that Asda’s price rollback campaign might be having an impact on its performance. Its sales still fell by 3.8%, but this is an improvement on the declines of over 5% reported in recent months.

NamNews Implications:

• Key standout has to be that Asda is the only retailer showing a fall in 12-week YOY sales…
• …indicating the scale of the challenge facing the retailer.
• A key problem is the quality of rivals by comparison…
• …along with the discounters now powering ahead amidst continuing market uncertainty.
• And a return to higher inflation, certain for further increases when additional taxes are fully reflected in the stats.
• The heavy investment in price cuts by rivals will add further pressure on Asda.
• Meanwhile, the rapid growth in premium own label poses a continuing challenge for the size of brand premia.
• Meaning consumers are less willing to accept ‘excess’ prices for brands vs their own label equivalents…

Lidl GB To Spend £500m Opening New Stores Over The Next Year

hashtag

Lidl GB has revealed that it will invest half a billion pounds in its expansion during its current financial year, with plans to open more than 40 new stores.

The announcement came as the discounter published its 2025 site requirements brochure, outlining hundreds of potential locations for new stores, including high streets, retail parks, and mixed-use town centre sites.

The updated list features locations across England, Scotland and Wales. It includes 200 places in London where it is seeking sites, including Mayfair, Chelsea, Kensington, Notting Hill, Angel, Soho and Covent Garden, as well as more suburban areas such as Finchley, Colindale and Uxbridge.

“This level of investment is a clear sign of our ambition. As we enter our fourth decade in Great Britain and hurtle towards a thousand stores, there are still so many parts of the country crying out for convenient access to a Lidl store,” said Richard Taylor, chief real estate officer at Lidl GB.

“That’s why we welcome the measures proposed in the Government’s Planning and Infrastructure Bill – they recognise the urgent need to remove barriers to development and support the kind of growth we at Lidl are working towards.”

He added: “Our latest site requirements brochure reinforces the scale of our ambition for the future. New Lidl stores mean new jobs, new opportunities for British suppliers, and continued investment into local economies. We’re proud to be one of the fastest-growing supermarkets in the country, and with this investment, we’re taking another big step in our journey.”

This year, Lidl will also complete the expansion of its Belvedere Regional Distribution Centre, which has more than doubled in size. The discounter is also set to start construction on a new distribution centre in Leeds later in the year to support its growth plans.

NamNews Implications:

• There you have it from Lidl: 40 new stores in most-needed locations.
• And little reason for Lidl to compromise on plans given £500m set aside.
• Time for rivals and suppliers to reassess their discounter/Lidl strategies?

Chinese Retail Giant Launches Online Supermarket JoyBuy In The UK

China’s largest retailer by revenue, JD.com, has begun testing a new e-commerce grocery site in the UK called Joybuy.

Initially taking orders from consumers in select London postcodes, the website offers an extensive 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 lines are also available across several categories.

A spokesperson from JD.com told trade publication The Grocer that Joybuy was currently in a testing phase with plans for an official launch and wider rollout to other cities by the end of the year.

The UK Joybuy website says it offers same-day and next-day delivery, with a 30-day free return policy.

The report by The Grocer said the company has been quietly building a highly experienced team of UK grocery buyers and category execs in recent months.

This includes Matthew Nobbs, a former commercial director for rapid grocery player Gorillas, director of trading for Holland & Barrett, and senior buying director for Lidl UK. He was appointed JD.com UK chief merchandise officer in February and recently posted on LinkedIn: “Getting ready to rumble in the UK for one of China’s biggest success stories”.

Meanwhile, Richard Thorn, a former online trading manager at Sainsbury’s and Asda account lead for PepsiCo, was appointed senior category manager for food & beverage in January.

Buyers have also been recruited from Ocado Retail, Amazon and Tesco, with JD.com currently advertising for more than 40 London-based roles, including FMCG, baby, personal care and ambient category managers.

The report noted that, unlike other Chinese e-commerce companies such as Temu and Alibaba, which operate a marketplace model, JD.com functions as a retailer, holding stock in its own warehouses.

The company saw its turnover exceed $157bn last year and has been growing its presence outside of China in recent years. It has already established warehouses across Europe in the Netherlands, Poland, and France.

“JD.com’s operations in Europe are built on the same principles that define our success in China: delivering high-quality products at great prices, backed by fast and reliable delivery,” the company spokesperson told The Grocer.

NamNews Implications:

• JD.com is patently taking the UK market seriously.
• Staffing up.
• Starting in the UK’s biggest conurbation.
• Positioning: ‘delivering high-quality products at great prices, backed by fast and reliable delivery’.
• Categories: an extensive 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 lines available across several categories.
• Need any more details?

Sainsbury’s Extends Aldi Price Match Offer To Biggest In The Market

Amid talk of an Asda-led price war in the grocery sector, Sainsbury’s has boosted its commitment to value with an expansion of its Aldi Price Match range.

The supermarket has added over 100 products, including more fridge and cupboard essentials, household products, and summer lines. The expansion means Sainsbury’s will now offer 800 products price-matched to Aldi, more than any other retailer.

New own-label products added to the scheme include kitchen towels, handwash, shower gel, sausages, feta, prosecco, champagne, wine, quiche, and houmous.

“With household costs going up, we’re working tirelessly to keep prices low for customers when doing their big shop at Sainsbury’s,” said Richard Crampton, Sainsbury’s Commercial Director – Fresh and Convenience.

“With the biggest ever Aldi Price Match, we’re introducing hot weather favourites such as dips, ice cubes and fizz, as well as family staples such as shower gel, cotton wool and period care, ensuring shoppers’ budgets can go even further this summer.”

Last week, Sainsbury’s said it expects its earnings to flatline this year in order to remain competitive. The statement came days after Tesco forecast lower profits to give it the flexibility to reduce prices in response to Asda’s efforts to win back shoppers.

After posting robust annual results, Sainsbury’s Chief Executive Simon Roberts stressed the group was committed to sustaining its “strong competitive position” and ensuring customers get “great value”.

The pledge came weeks after Asda’s Chairman Allan Leighton said that his business was prepared to take a significant hit to its profit to finance a shift to a new ‘Asda Price’ that is 5% to 10% lower than its rivals in a bid to recover lost market share.

NamNews Implications:

• If 800, why not 1,000…?
• In fact, always a puzzle why the UK mults did not respond to the arrival of discounters with a couple of ‘Aldi-aisles’ offering a replication of the discounter’s then limited range offering…
• …and possibly halting them in their tracks…
• …or at least slowing their progress maybe?

Number Of Firms Preparing Offers For Poundland

Alteri, a private equity investor that owns Bensons for Beds, is reportedly among a pack of suitors circling struggling discount chain Poundland.

According to Sky News, Alteri, which recently missed out on a deal to buy the high street operation of WH Smith, is preparing to submit an offer for Poundland in the coming weeks. It is expected to be among a number of bidders for the 825-strong chain.

Last month, Pepco Group confirmed that it was evaluating all strategic options to separate off its UK business, including a sale. Its Chief Executive, Stephan Borchert, revealed at the time that it had already received interest from potential buyers.

He declined to comment on the type of interest, what stage talks had reached, or what Poundland was worth, but said he was confident its future would be decided by September this year.

Advisory firm Teneo has been appointed to oversee the process, with analysts suggesting that a deal could put scores of stores at risk of closure.

Despite efforts to return Poundland to its core £1 offering, the business suffered a slump in sales last year. Last month, Pepco highlighted that Poundland was operating in an increasingly challenging UK retail landscape that would intensify due to tax hikes, adding further pressure to the discounter’s cost base and impacting profitability.

Alteri, which is backed by the investment giant Apollo Global Management, has not commented on the Sky News report.

NamNews Implications:

• Key facts:
• Poundland is up for sale.
• Any attempt to return Poundland to its core £1 offering has been diluted via inflation (£1 at launch is now £3+).
• Anyone buying Poundland has to:
• Close unprofitable shops
• Sell remaining sites to the ‘highest bidder’
• Possibly optimise any residual brand value via online
• And that’s it, nice while it lasted!

Sainsbury’s Joins Tesco In Warning Price War Could Impact Profits But Ramping Up Store Expansion Programme

Days after Tesco forecast lower profits to give it the flexibility to reduce prices in response to Asda’s Rollback, Sainsbury’s expects its earnings to flatline in 2025.

Following today's robust annual results, they expected £1bn retail operating profit this fiscal, far below the Tesco's potential £400m hit.

CEO Simon Roberts stressed it will sustain its “strong competitive position” and ensure customers get “great value”.

The pledge comes weeks after Asda’s Chairman Allan Leighton said that his business was prepared to take a significant hit to its profit to finance a shift to a new ‘Asda Price’ that is 5% to 10% lower than its rivals to recover lost market share.

Richard Hunter, head of markets at Interactive Investor: “In market share, Sainsbury’s and Asda are more closely linked with numbers of 15% and 12.5% i.e. Sainsbury’s rather than Tesco who could be under most pressure."

In 12 months to 1 March 2025, Sainsbury’s group retail underlying operating profit was up 7.2% to £1.04bn, with double-digit grocery growth diluted by lower profits at Argos. Pre-tax profit up from £277m to £384m.

Total full-year retail sales up 3.1% to £31.56bn, like-for-like growth of 3.2% vs Q4 up 3.7% vs 2.8% Q3

Total grocery annual sales up 4.2% after Q4 up 4.1%.

Argos, annual sales down 2.7% vs Q4 1.9% rise.

Sainsbury’s price drops via Aldi Price Match and Nectar Prices, record levels of customer satisfaction re availability.

Plans for its biggest store opening programme “in over a decade”. They bought 14 new supermarket sites last fiscal Homebase and Co-op.

Including organic store openings, they plan 15 supermarkets in 2025/26, i.e. over 400,000 sq. ft. new space, plus 25 new convenience stores in 2026/27.

Roberts: “We’ve transformed our business in 4 years, a winning combination of value, quality and service that customers love, investing £1bn in lowering our prices.

“...Sainsbury’s as their main grocery shop, highest market share gains in over 10 years. We are committed, above all else, to sustaining our strong competitive position we have built and we expect to continue to outperform the market.

“...our largest investment in expanding our store space in over a decade via new supermarkets in key new locations and extend food space...”

NamNews Implications:

• The added uncertainties of Trump tariffs…
• …gives retailers the ’excuse’ to wait and see outcomes.
• i.e. postpone any plunge into a UK price war.
• But also manage stock market expectations, should Asda take an extra plunge.
• (Besides, whilst Asda management may have permission to make threats…
• …this may not include the funding of a prolonged price war)
• Meanwhile, retailers like Sainsbury’s and Tesco with strong balance sheets and considerable momentum…
• …may now want to preserve their ‘wealth’ following Trump’s announcements.
• And await an Asda blink…

B&M Taking Steps To Boost Performance After Another Tough Quarter

Discounter B&M is forecasting that its annual profit will now come in above the midpoint of its £605m-£625m guidance range, buoyed by sales from new stores and robust French operations, with cost cuts also helping it mitigate cautious demand from customers in the UK.

The retailer’s share price spiked as much as 7.5% in early trading as investors took solace in the upgrade after it cut its profit forecast in February, having already narrowed the range previously. B&M shares have plummeted over the last year after a series of profit warnings.

In a brief trading statement today, B&M revealed that its group revenues over the 12 months to 29th March had risen 3.7% to £5.6bn after a slightly stronger performance in the final weeks of the year.

In the fourth quarter, like-for-like sales at B&M UK fell 1.8% when the distorting effect from the Easter weekend falling in the final week of the previous year is removed. This was an improvement on the 2.8% decline recorded over the Christmas period.

The group noted that UK general merchandise sales values and unit volumes in the quarter increased on both a like-for-like and total basis, driven by garden, toys, paint and stationery. However, FMCG delivered negative like-for-likes with “actions” underway to improve performance.

B&M stated that gross margin was “robust” in the UK, helped by total volume growth and relatively stronger trading in general merchandise categories.

Operating costs increased by around 6% but were partly mitigated by productivity gains.

B&M opened 45 gross new stores in the UK during the year, driving the chain’s total annual revenues up 3.8% to £4.48bn. The group is planning 45 more openings in the year ahead.

At B&M France, fourth quarter like-for-like sales rose 3.2%, with total revenues across the year growing 7.8% to £543m after the addition of 11 new stores.

At Heron Foods, total sales rose 1.5% in the final quarter but were down 0.6% across the year despite the opening of 14 new stores.

Meanwhile, B&M stated that it was making progress on finding a new Chief Executive to replace Alex Russo, who will retire at the end of this month. An announcement is expected in the coming weeks, with David Potts, the former CEO of Morrisons, reported to be one of the frontrunners.

NamNews Implications:

• Given that market expectations will have been factored into its share price, today’s uptick patently reflects shareholder satisfaction with performance.
• The key will be B&M’s ability to maintain this momentum…
• …especially the like-for-like element.
• Opportunities for suppliers to help lift new store performance…
• …by better-than-average sales levels.

Booths Introducing Loyalty Pricing

Upmarket northern grocer Booths is set to become the latest retailer to introduce loyalty pricing.

According to trade publication The Grocer, members of the Booths rewards scheme will have access to discounted prices on around 300 of the chain’s own-label lines. Cardholders will also get access to “permanent” promotions and offers, including its ‘Three for £15’ meat deal and 10% off when purchasing four bottles of wine.

Booths’ Managing Director Nigel Murray told The Grocer that it had decided to introduce the “fairly fundamental changes” as it wanted to do more to reward its most loyal shoppers. Currently, cardholders are rewarded with 5% back on the purchase of selected items in the form of paper vouchers, which they can then redeem in stores.

He noted that the new mechanism would be more relevant to the millions of visitors to the Lake District who use its two stores in Windermere and Keswick.

“They are not frequent customers, but they are regular customers as they come to us every time they come to the Lake District,” he said. “So how do we reward those people instantly when they come to store?”

Murray highlighted that running a paper-based voucher system was also very expensive.

He told The Grocer that the loyalty pricing would be rolled out to Booths’ 26 stores “imminently”.

During its last financial year, Booths delivered improved results after recovering from the impact of high inflation and the cost of living crisis.

NamNews Implications:

• The key is ‘instant rewards’.
• (key to loyalty-data optimisation)
• Not because rivals are doing so…
• …but because customers respond to a felt need.
• With evidence in repeat purchase.

Tesco’s Whoosh Service Seeing Rapid Growth While Marketplace Expanding

After Tesco released strong annual results yesterday, its Chief Executive Ken Murphy noted that its rapid delivery venture Whoosh was a “real success story”, with basket sizes and sales soaring.

The group’s total online sales in the UK grew by 10.2% to £6.8bn last year, including a c.3ppts contribution from Whoosh. Overall sales growth was primarily driven by an increase in average online orders per week, which rose 10.8% to 1.3 million, with basket size (excluding Whoosh) up 3.6% to £109.

Meanwhile, Whoosh saw sales almost double in the year, with a further improvement in customer satisfaction and growth in average basket size as it expanded the depth of the product range. After launching in 2021, the rapid delivery service is now available in over 1,500 Tesco stores, including 42 large outlets, with active customers up 48%.

“What we’re seeing in our larger stores is that instead of 3,000 products, customers have access to nearly 15,000 products. We’re seeing bigger basket sizes, and I think it’s quite a valuable service for our customers,” Murphy explained.

It was revealed yesterday that Tesco Whoosh had become the first partner of Deliveroo Express, a new white label solution that enables grocers and other retailers to offer on-demand delivery directly through their own online channels.

Initially operating out of three stores in Ireland, the supermarket is leveraging Deliveroo’s infrastructure and network of around 2,500 riders to provide the on-demand service in the country.

Meanwhile, Tesco highlighted the progress it was making with its new Marketplace, which offers a broad range of non-food products online through third-party sellers.

Having launched in June last year, the operation now offers over 400,000 products, with more sellers and category launches planned for later this year. “We are encouraged with customer satisfaction scores, and trading through Black Friday was particularly successful,” Tesco said.

“Our priority has been laying the foundations for growth, adding, for instance, the capability to offer customers Clubcard Prices when they shop on Tesco Marketplace.”

NamNews Implications:

• ‘Online basket size (excluding Whoosh) up 3.6% to £109’…
• …is the way to make online fulfilment profitable…
• …at which point, all systems go.
• With Whoosh the icing on the online-cake!

Asda Names Creative And Media Agency Partners

 

Asda has appointed Lucky Generals and Spark Foundry as its creative and media agency partners following a pitch process.

Advertising firm Lucky Generals will be Asda’s new creative agency partner for both its supermarkets and its George fashion & home brand.

The struggling grocer noted that it had been impressed by the agency’s ideas to show how Asda can deliver on its key mission of “delivering uncompromised value for hard-working families”. Lucky Generals will begin transitioning into the role in May.

Meanwhile, Asda is retaining Spark Foundry as its media agency, continuing an eight-year partnership.
“We set off on this journey to ensure we have the right partners in place to support Asda’s objectives to offer uncompromising value to our customers and with a key focus on the ‘Asda DNA’ that really resonates with our customers,” said Adam Zavalis, VP of Marketing at Asda.

“We are really pleased to have identified Lucky Generals as our new creative partner whilst retaining Spark as our media partner and look forward to working together to bring Asda’s personality to life for our customers.”

Cressida Homes-Smith, the CEO at Lucky Generals, added: “This is a pivotal moment for two of Britain’s greatest consumer champion brands – brands that deserve to be right in the heart of the nation at a time when things in Britain are genuinely tough.

“We love the palpable sense of energy, enthusiasm and determination the Asda and George bring, and there has been a natural and positive relationship between us since the very first meeting. We’re genuinely grateful for the honour and opportunity and can’t wait to get our sleeves rolled up and put these brands back where they belong.”

NamNews Implications:

• Asda now needs to hit media hard & fast…
• …in what will hopefully be a ‘re-education’ of its public…
• …given that a ‘new-education’ message would probably take longer than Asda has available.
• Fingers crossed…

Aldi Surpasses Asda in Food And Drink Sales Amidst Turnaround Challenges

Asda’s turnaround has suffered a blow after new figures show that Aldi has overtaken the struggling supermarket in terms of food and drink sales.

Kantar data seen by The Telegraph shows Aldi accounted for 10.6% of food and drink sales across all supermarkets in the 12 weeks to 23 March – beating Asda’s market share, which slipped from 10.5% to 10.4%. Aldi had a 10.1% market share in the previous period, with its gains in recent weeks driven by higher sales of fresh poultry, fish, eggs and fruit.

The figures, which the newspaper said are distributed privately to supermarkets, do not include sales of alcohol, toiletries, household goods, and beauty items. Including these, Asda is still the third-largest grocer, with a share of 12.5%. However, this is down from the 14.8% share it held when it was acquired by TDR Capital and the Issa brothers in 2021.

Meanwhile, supported by its store expansion programme, Aldi has continued to make gains, with its overall share recently hitting 11.0% for the first time after growing at its fastest rate in over a year.

Aldi overtook Morrisons as the fourth-largest grocer in September 2022. In the unpublished figures from Kantar, The Telegraph noted that Morrisons had slipped further down the rankings on food and drink sales. It sold less food and drink than Lidl in the period, with the fast-growing discounter holding a 7.7% share compared to Morrisons’ 7.6%.

In March, Asda’s Allan Leighton: .. Asda prepared to take a significant hit to its profit to finance a shift to a new low ‘Asda Price’ by the end of 2026 in a bid to recover lost market share. Shares in Tesco, Sainsbury’s and M&S tumbled on fears of a major supermarket price war.

Leighton said Asda had a lot of ground to make up, i.e. turnaround efforts would take years.

Re share share data, an Asda spokesperson said the Kantar data was “highly selective and does not include key grocery categories such as alcoholic drinks, pet food, laundry, household products and toiletries”.

“We have a clear plan to deliver outstanding value for our customers, and since relaunching Rollback at the end of January, we have reduced prices on a third of our entire range.

“This focus on lowering prices for hard-working families is reflected in the latest and most widely followed Kantar data, as Asda inflated behind the discounters and clearly maintained its position as the third-largest supermarket in the UK.”

NamNews Implications:

• Aldi achieving a No.3 position in any part of the UK trade is a pivotal moment.
• And doing so in food & drinks makes it top-of-mind.
• These food & drinks stats present a dilemma for Asda:
• Fight it out with the discounters on food & drink.
• Or do battle where Asda are ahead: alcohol, toiletries, household goods, and beauty items. Morrisons’ slippage will not go unnoticed either…
• As always, suppliers will have to take a stance re where these changes are heading…
• …and adjust their trade strategies accordingly.

Tesco Expected To Post Strong Annual Results And Address Asda Price War Challenge

Tesco is set to reveal strong sales and profit figures when it releases its annual results on Thursday, with investors keen to hear how the UK’s leading grocer plans to respond to Asda’s drive to slash prices to become 5% to 10% cheaper than its rivals.

Last month, Asda’s Chairman Allan Leighton said that the business was prepared to take a significant hit to its profit to finance a shift to a new low ‘Asda Price’ by the end of 2026 in a bid to recover lost market share. The statement led to shares in Tesco, Sainsbury’s and M&S tumbling on fears of a major supermarket price war.

However, most analysts think that scenario is unlikely, noting the increasing cost pressures retailers and their suppliers face. Recent industry data from Kantar shows that grocery price inflation in the UK rose slightly to 3.5% last month, with shoppers turning to promotions to save money.

Market watchers have also questioned whether Asda has the financial firepower for a sustained price war, given that its majority owner, private equity group TDR Capital, is not putting additional equity into the business.

Meanwhile, Tesco and Sainsbury’s have stronger balance sheets than Asda.

Tesco’s results “will be an important staging post to test the mood music of the market leader on such matters, we sense a mature, resolute and professional approach will ensue,” said renowned Shore Capital analyst Clive Black.

Analysts at Bernstein looked at over 500 own-label products that Tesco price matches with Aldi and compared them with Asda. “Tesco and Aldi do not massively need to react. They are winning on price perception,” it found.

Tesco has guided for an annual retail adjusted operating profit of around £2.9bn, up from £2.76bn last year, supported by robust sales growth in its core business.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Growth in the UK and Europe helped to offset declines in its wholesale business, Booker. It’s a competitive space, but its improving proposition saw Tesco record its highest market share since 2016. Investors will be keen to see this trend continue when it reports full-year results.”

Analysts expect Tesco to flag further profit growth in next 12 months despite costs (higher national insurance contributions, national minimum wage, new packaging levy.

NamNews Implications:

• The added uncertainties of Trump tariffs…
• …gives retailers the ’excuse’ to wait and see outcomes.
• i.e. postpone any plunge into a UK price war, if intended.
• Besides, whilst Asda management may have permission to make threats…
• …this may not include the funding of a prolonged price war.
• Meanwhile, retailers with strong balance sheets may now want to preserve their ‘wealth’ following Trump’s announcements.
• This says a lot: “Tesco and Aldi do not massively need to react. They are winning on price perception”.

Rival Supermarkets Could Be Given Permission To Challenge Plans For New Aldi And Lidl Stores

The traditional supermarket multiples could be granted fresh powers to open more stores in areas dominated by Aldi and Lidl.

The Telegraph: The Competition and Markets Authority (CMA) is reviewing the rules that restrict major supermarkets from blocking their rivals from opening stores nearby.

To protect competition for shoppers, the regulator’s restrictive land clauses mean supermarkets must allow rival stores to open nearby without opposition.

However, this order only applies to Tesco, Sainsbury’s, Morrisons, Asda, Waitrose, Marks & Spencer and Co-op. Aldi and Lidl are exempt, meaning they have been able to grow their number of stores without having to comply with the rule.

Under the regs, the 7 UK supermarkets are blocked from having contractual clauses in their store deals, blocking rivals having stores in the same area. All of them have been forced to review contracts to comply with the order, which the CMA said is designed so that “shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices”.

Supermarket bosses have become increasingly frustrated over what they claim is an unfair playing field with Aldi and Lidl, not subject to the same restrictions based on 2010 legislation

Discounters hold nearly 20% of UK grocery market and both plan hundreds more stores.

The report said that Aldi and Lidl have been using the same restrictive clauses to block competitors from opening stores near them in retail parks.

Richard Walker, the Executive Chairman of Iceland, said last year that the discounters were using “legal tricks” to prevent rivals from moving into out-of-town shopping parks.

Officials have been asked to consider whether the rules should now include Aldi and Lidl or whether they should remove the bans for all supermarkets.

Supermarket insiders told the newspaper that they were hopeful that the competition regulator would decide to axe the restrictions altogether, given Labour’s push to cut red tape.

A CMA spokesperson is quoted as saying: “The Groceries Market Investigation (Controlled Land) Order plays an important role in maintaining competition between supermarkets, which is crucial to the finances of families across the country.

“We are aware of concerns that the Order should cover more supermarkets due to changes in the groceries sector, and we always keep this under review to ensure a level playing field.”

NamNews Implications:

• Inevitable that the government/legislation trails behind market realities.
• Inevitable that discounters’ growth in market share would reach this point.
• Inevitable that this planning clause includes discounter contracts…
• …to avoid the free-for-all that would inevitably result from removing the bans for all supermarkets.

Aldi Hits British Supplier Target Earlier Than Expected

Aldi has met its long-term commitment to increase spending with British suppliers.

In 2020, the discounter pledged to spend an additional £3.5bn a year with British suppliers by the end of 2025. However, it announced today that it has already surpassed this target, spending more than £14bn with UK businesses in 2024.

Giles Hurley, Chief Executive Officer of Aldi UK, commented: “British suppliers have always been at the heart of our business. From homegrown apples to Wagyu beef, and from crisps to cocktails – our range is full of incredible British products sourced from our amazing suppliers right here in the UK.

“We remain committed to buying British wherever we can, and surpassing our annual spending target ahead of schedule is a testament to that. By working closely with British businesses, we continue to champion local suppliers and support the UK economy.”

Last year, Aldi signed a 20-year agreement with family-owned fruit farm A C Goatham & Son in Kent to create a 200-acre Aldi Orchard to supply the chain’s entire core range of British apples. And last month, the discounter revealed that it had signed a new contract worth around £320m over the next five years with Yorkshire-based beef supplier Warrendale Wagyu.

Hurley concluded: “Hitting this milestone early is a proud moment for us and for the thousands of British suppliers we work with. Their hard work and dedication are what helps us deliver great quality and value to our customers every day.

“As we look ahead, our British suppliers can know that we’ll continue to stand alongside them – just as we have for the past 35 years.”

Aldi is celebrating its 35th year in the UK this weekend, having made its debut on 5th April 1990, opening a store in the Stechford area of Birmingham.

NamNews Implications:

• Given that the future of UK retail is much about Retail Media...
• ...in turn based mainly upon optimising the use of brands' First Party Data...
• ...brand suppliers should prepare now for Aldi’s inevitable move towards a 50/50 brand-surrogate label balance.
• As the discounter remodels its business to optimise the potential of Retail Media...

hashtag

Supermarkets Ramping Up Promotions; Aldi Achieves Record Market Share

According to the latest data from Kantar, take-home sales at UK grocers increased by 1.8% over the four weeks to 23 March compared with a year ago, marking the slowest rate since June 2024. Grocery price inflation rose slightly to 3.5% over the same period, with shoppers turning to promotions to save money.

“With prices continuing to rise, supermarkets are mindful of the need to invest to attract shoppers through their doors,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “Promotional sales ramped up this month to 28.2% of total grocery spending, the highest level we’ve seen in March for four years.”

The data shows that retailer price cuts were responsible for £2.6bn of promotional spending, 8.8% more than the same time last year and significantly higher than the £686m spent on multibuy deals and ‘extra free’ offers. McKevitt added: “Despite the recent surge, we’re still some way off the promotional records hit in the wake of the financial crisis. Average spending on deals in 2012 was 39.8%, meaning there could still be more headroom to go. However, the market has changed a lot in that time, with the discounters holding a far higher share today than they did 13 years ago.”

Kantar noted that retailers battling to deliver value will be welcome news for households who remain worried about their financial situation. A recent survey by the research firm found that while the number of people reported as financially struggling has fallen from its peak of 27% in October 2022, this still accounts for almost a quarter (22%) of the country. “The rising cost of groceries ranks third on the list of concerns keeping consumers awake at night, just behind energy bills and the country’s overall economic outlook,” said McKevitt.

Despite financial concerns, consumers are still finding ways to treat themselves. Last month, sales of chocolate eggs and seasonal confectionery reached £134m, and over a third of households bought hot cross buns, even though Easter isn’t until late April.

As Aldi prepares to celebrate the 35th anniversary of its first store opening in the UK on 5 April, its share of the grocery market hit 11.0% for the first time over the 12 weeks to 23 March. This was up 0.3 percentage points from last year after its sales grew by 5.6% – the fastest rate for the discounter since last January.

Lidl’s sales rose by 9.1%, taking its market share to 7.8%, 0.4 percentage points higher than a year ago. It attracted 385,000 more shoppers last month, more than any other grocer, and saw a double-digit rise in footfall.

Ocado was again the fastest-growing grocer, a position it has held for the last 11 months, after its sales increased by 11.2%. For the first time, the online retailer took a 2.0% portion of the market. Spending on groceries at M&S increased by 13.1%, on top of M&S goods sold through Ocado.

Tesco saw spending through its tills rise by 5.4%, nearly half a billion pounds more than the same period a year ago. The UK’s largest grocer made the biggest share gain, with its portion climbing from 27.3% to 27.9%. Sainsbury’s reached 35 consecutive periods of year-on-year growth, with sales up by 4.1% as it grew ahead of the market. Its share nudged up to 15.2%.

Despite its turnaround efforts, sales at Morrisons were up only 0.6%, and its market share slipped to 8.5%. Meanwhile, Asda’s price rollback campaign appears not to have yet had a significant impact on its performance, with its market share declining to 12.5% after a 5.6% fall in sales.

NamNews Implications:

• The key standout is the Tesco-Sainsbury’s-Aldi-Lidl growth in market share, largely at the expense of Asda and Morrisons.
• Moreover, increases in sales performance across the board is being ‘bought’ via price promotion.
• With possibly more of the same as Autumn Budget tax increases now begin to bite in April.
• Suppliers need to anticipate the probability that retailers will now want (need?) them to share some more of the promo-cost of encouraging uncertain shoppers to spend.
• Any reluctance by brand owners runs the risk of more consumers turning to own label alternatives…

Cost Of Asda’s IT Upgrade Set To Exceed £1bn; Looking At Moving Some Jobs Abroad

The cost of Asda’s troubled IT upgrade is set to surpass £1bn this year, adding more pressure to the business as it embarks on a turnaround plan that includes substantial investment in reducing its prices.

According to The Sunday Times, the troubled supermarket recently told bondholders that it was spending a further £175m on Project Future, a programme to separate its technology systems from its previous majority owner, Walmart. It told lenders this project had already cost £900m since 2021.

Disentangling Asda’s IT infrastructure from the US retail giant has been plagued by delays. Walmart recently agreed to push back its February 2025 deadline for the project, which prevented Asda from being hit with a multimillion-pound penalty.

Asda has said that the costs of Project Future would be significantly lower this year as the programme is finally concluded.

The retailer recently announced another round of price cuts as part of a move to shift its entire offering to a new low ‘Asda Price’ by the end of 2026, with the aim to be 5% to 10% cheaper than its rivals

Asda’s Chairman, Allan Leighton, said earlier this month that he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket. He also promised “a big investment” in the business even though it would “materially reduce our profitability this year”.

A separate report by The Telegraph over the weekend suggested that Asda is drawing up plans to shift some jobs abroad as part of moves to cut costs so it can invest in its price Rollback campaign and store improvements.

The retailer is said to have launched a consultation that could involve 26 jobs being cut across its customer service team and shifted overseas. Those affected are understood to be in Asda’s social media department, which is responsible for fielding questions from shoppers on sites such as X.

The newspaper noted that the proposal, which has not yet been finalised, echoes a similar move by Asda last year when it outsourced more than 100 IT staff to an Indian-based supplier.

An Asda spokesperson is quoted as saying: “As more customers choose to engage with us in different ways, we are proposing to make some changes to our online customer services team to support this changing dynamic.

“We have opened a consultation with a small number of colleagues affected should this proposal go ahead, and our priority is to do all we can to support them during this process.”

NamNews Implications:

• Asda management must sometimes refer to the old IBM maxim: ’It’s Better Manually’
• Seriously, £1bn added to their other issues must be a continuing distraction.
• Asda are taking all the obvious steps.
• And managing stakeholder expectations.
• With the best team possible.
• Fingers crossed…

Asda Chief Customer Officer Exiting After 18 Months

As Asda pushes forward with its turnaround strategy, David Hills is stepping down from his role as Chief Customer Officer.

He joined the business in September 2023 from Aldi, where he was Group Director of Marketing and Communications. At Asda, he was part of the team that revived the chain’s Rollback scheme, which is a key part of the ailing supermarket’s plan to win back shoppers from its rivals.

According to trade publication Retail Week, Hills is leaving to join airline and holiday company Jet2 amid a wider shake of senior staff members at Asda.

An Asda spokesperson is quoted as saying: “Earlier this year, David Hills informed us of his decision to join Jet2. David will remain with Asda until later this year and we will announce his replacement shortly.”

Last week, the retailer announced another round of price cuts as part of a move to shift its entire offering to a new low ‘Asda Price’ by the end of 2026, with the aim to be 5% to 10% cheaper than its rivals

Asda’s Chairman, Allan Leighton, said earlier this month that he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket. He also promised “a big investment” in the business even though it would “materially reduce our profitability this year”.

Meanwhile, Asda announced yesterday that its staff will receive an above-inflation pay increase of 4.7% in three phases, taking rates from £12.04 to £12.60 per hour. Hourly rates for workers inside the M25 will rise to £13.82.

Hayley Tatum, Chief People Officer at the supermarket, said: “We’re proud to have invested more than £500m in retail pay over the last four years. Our colleagues are what makes Asda special, and this latest pay investment, plus an increased colleague discount and enhanced family-friendly policies, recognises the key role they play in serving customers each day.”

NamNews Implications

• Worth assuming that a search for a replacement has been underway ’since early this year’.
• And it will probably take at three months to fill the role, at least!
• Meanwhile, Asda NAMs will have to find ways of covering the gap by adding more customer management rationale to their side of the interface.
• (i.e. driving customer loyalty, customer acquisition and customer retention).
• Unless they prefer to leave that opportunity for a rival…?

More Price Cuts At Asda

 Asda has announced another round of price cuts as it battles to win back shoppers after a prolonged run of dismal sales performance.

The latest reductions cover 1,500 “family favourite products” and means its renewed Rollback initiative launched in January has spread to 10,000 products – almost a third of Asda’s entire range.

The latest cuts are across multiple categories and include a 44% reduction in the price of Philadelphia Soft Cheese (165g), a 34% cut in Nestlé Munch Bunch (340g), and a 34% drop in the cost of Head and Shoulders (2 in 1 – 330ml). The reductions also include own-label lines such as Asda Little Angels Nappies, down 16%.

Earlier this week, the value of shares in Tesco, Sainsbury’s and Marks & Spencer fell by a total of around £4bn amid fears that Asda will sacrifice profit in a grocery price war to win back market share.

After announcing year-end results last Friday, Asda’s new Chairman, Allan Leighton, noted that he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket. He also promised “a big investment” in the business even though it would “materially reduce our profitability this year”.

The retailer plans to add thousands more products at regular intervals to its Rollback scheme in order to move its entire offering to a new low ‘Asda Price’ by the end of 2026. Leighton has said that the aim was for Asda to be 5% to 10% cheaper than its rivals, though regaining customers’ trust would take time.

Commenting on the latest round of cuts, he said: “Last week, we signalled again our absolute commitment to lowering prices for customers, and today, we’re further delivering on that promise. By rolling back prices on thousands more products, we’re making it even easier for our customers to save. Nearly 10,000 products have now been rolled back, and we will continue to invest in lowering prices across the rest of the year and beyond.”

NamNews Implications:

• For anyone harbouring any doubts re Asda intent
• “a pretty significant war chest”
• “a big investment”
• “materially reduce our profitability this year”.
• This says it all..
• i.e. Asda are going to the wire
• Be warned…

Morrisons Shaking Up Trading Team As Part Of Plan To Relaunch Market Street Concept

Morrisons is reported to be overhauling its trading team as it prepares to relaunch its Market Street proposition as part of its growth strategy.

According to trade publication The Grocer, the supermarket’s new Group Trading Director, Andrew Staniland, who joined from Iceland last month, is leading the shake-up.

This has involved a consolidation of its category buying teams, with five layers of reporting being reduced to three.

Morrisons stated that the move has led to the creation of more than 10 new roles, including three director roles. It is believed that some category director roles will be merged into heads of trading areas, while buyers will now also be known as traders.

The shake-up is also said to include the introduction of monthly virtual supplier updates.

The report by The Grocer noted that a key part of Morrisons’ turnaround plan is to create the ‘Market Street of tomorrow’, with its Chief Executive Rami Baitiéh having earmarked the concept as a point of difference to its rivals.

Staniland told The Grocer: “Since I stepped through the door a few weeks ago it was clear to me we have a very capable team and a golden opportunity to make some magic at Morrisons.

“I’ve been listening hard to our customers, colleagues and suppliers and learning a great deal about where we are and what we need to focus on – and the plans are coming together really well now.”

NamNews Implications:

• ‘Creation of more than 10 new roles, including three director roles’...
• ...means suppliers should reassess Morrisons’ account management structures to reflect probable changes in decision-making process.
• And deep down, attempting to assess the impact on individual supplier category mix.
• Meanwhile, their intent to create the ‘Market Street of tomorrow’ is worth attention…

Billions Wiped Off Value Of Leading Supermarkets Amid Fears Of Asda-Led Price War

The value of shares in Tesco, Sainsbury’s and Marks & Spencer has fallen by a total of around £3.5bn since Friday afternoon amid fears that Asda will sacrifice profit in a grocery price war to win back market share.

Tesco took the biggest hit; its share price was down 10% by lunchtime today, while Sainsbury’s slipped 8%, and Marks & Spencer’s fell 7%.

The drops came after Asda said its profits were likely to fall this year as it invested more in cutting prices and overhauling its operations to tempt shoppers back to its stores.

Analysts stated that it was likely that Tesco and Sainsbury’s profits would be squeezed by having to lower prices to compete.

Frederick Wild, a retail analyst at Jefferies, said it was clear that “market conditions are changing rapidly”, meaning the value of the listed grocers was likely to remain under pressure in the short term. “We would be more sceptical of any grocer found to be flat-footed in this changing environment,” he added.

However, Wild said it was “far from clear whether Asda has the ability to commit to the scale of cuts outlined on Friday if volume growth does not improve measurably in the coming weeks and months”.

Asda’s new Chairman, Allan Leighton, said on Friday he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket.

In January, he reintroduced the ‘Rollback’ promotion of the 1990s. With an average reduction of 25% across 4,000 products, Rollback has now been expanded to roughly a quarter of Asda’s entire range, with it planning to add thousands more products at regular intervals to move its entire offering to a new low ‘Asda Price’ by the end of 2026.

Leighton told reporters at the end of last week that the aim was for Asda to be 5% to 10% cheaper than its rivals, though regaining customers’ trust would take time.

Clive Black, the head of research at Shore Capital, said Asda had made a “clear and necessary indication of intent to invest in the price and proposition” but this was “set against a sceptical and reluctant supply chain”.

He said he was holding profit predictions for Tesco and Sainsbury’s at present. “Irrational contagion [on price cutting] lowering gross margin and earnings is the greatest concern, but we need to remember too that the listed players are better grocers than Asda with a broader customer set, stronger balance sheets and a will to remain competitive, too,” Black added.

NamNews Implications:

• We are now entering ‘who blinks first?’ territory…
• One consequence has to be consumer reaction:
• “How can they afford a 25% average price reduction (when operating at a loss)?”
• Moreover, retailers that follow Asda may be subject to similar accusations.
• All leading to distrust of the retail brand…
• …with a knock-on impact on share prices.
• ...as Asda could be entering the ‘last chance saloon’?

Aldi Voted ‘Supermarket Of The Year’ For Wine

Aldi has beaten off competition from Waitrose and Co-op to be named ‘Supermarket of the Year’ for wine at this year’s People’s Choice Drink Awards, which took place earlier this week.

The discounter won the gold medal after receiving the greatest number of public votes, with its own brand Pierre Jaurant Côtes De Gascogne white wine also recognised within the ‘Mindful Drinking: Light and Easy’ category, taking home a silver.

Aldi noted that success has been fuelled by its customer-centric approach and responsiveness to consumer trends, developed in direct response to shopper demand.

Julie Ashfield, Chief Commercial Officer at Aldi UK, commented: “We’re thrilled to receive this award for our wine range, showcasing our commitment to offering exceptional value without sacrificing quality. Thank you to our customers for recognising our dedication.”

NamNews Implications:

• Stakeholders might benefit from reminding themselves of how far this ‘impertinent discounter’ has come…
• …on its 35-year UK journey
• ...in this sophisticated UK market
•  (With you or without you?)

Unilever To Increase Spend On Social Media Marketing And Accelerate Pace Of Food Brand Disposals

Unilever’s new Chief Executive has revealed that the business is planning to recruit more social media influencers to market its products because consumers are “suspicious” of corporate branding.

According to the Financial Times, Fernando Fernandez told Barclays analyst Warren Ackerman in an interview last week: “Messages of brands coming from corporations are suspicious messages,” adding: “Creating marketing activity systems in which others can speak for your brand at scale is very important.”

He said Unilever was switching to a social media-first advertising model, increasing its investment on such platforms from 30 to 50% of its total advertising spend. The company has increased its overall marketing spend from 13% of turnover in 2022 to 15.5% in 2024.

In the past, Unilever has attracted the ire of investors for overemphasising brand “purpose”. Its marketing approach has typically associated its products with wider purposes, such as Hellman’s mayonnaise tackling food waste or Dove soap denouncing toxic beauty standards.

However, the FT noted that the tactic has lost traction i.e. consumers have increasingly turned to online influencers instead of corporations for recommendations.

“There are 19,000 zip codes in India. There are 5,764 municipalities in Brazil. I want one influencer in each of them,” Fernandez said. “That’s a significant change. It requires a machine of content creation, very different to the one we had in the past.”

Meanwhile, Fernandez told Ackerman they were sticking to his predecessor’s plan to only carry out bolt-on acquisitions and would accelerate the pace of disposals of smaller regional food brands.

“Every brand in our portfolio, every category has to earn the right to belong in our portfolio,” Fernandez said, adding: “Time will say what we do with our portfolio in the long run, but that’s the position at this stage.”

Analysts and investors have suggested that Unilever’s food business no longer fits with the rest of the company’s faster-growing product portfolio.

While Fernandez did not rule out a separation of the entire food portfolio, he said the division’s two leading brands – Knorr and Hellmann’s, 60% of the business – were accretive in margin and cash generation. “It’s a very attractive business, it gives us a lot of flexibility. And we are committed to grow that business. That’s what I can say about food now,” he said.

NamNews Implications:

• On this, the fifth anniversary, it could be said that trust was the biggest casualty of Lockdown…
• With consumer “suspicion” of corporate branding an example of the damage at brand level.
• Third-party recommendations patently can have more pulling power with consumers.
• And given its potential reach, in the right hands, social media is becoming more powerful.
• i.e. this Unilever change has to be a pointer for others...

Asda’s Chairman Pauses Search For CEO As He Makes Progress With Recovery Plan In A Race Against Time

Asda has “paused” its long-running search for a Chief Executive as new Chairman Allan Leighton implements his turnaround plan for the struggling supermarket.

Asda has now been without a permanent CEO since the abrupt departure of Roger Burnley in August 2021 and Mohsin Issa stepping back late 2024.

In an interview with The Times last week, Leighton said: “I’m going to take another couple of months to see what it is we need.

“It’s very important to get somebody, and to get a team, that is going to be here for the next 5, 7, 8 years".

He added: “It is about getting the range right, getting the price right and getting the availability right. And we’ve got to win the hearts and minds back of our people. Why we are where we are is largely self-inflicted.”

Key steps:

• Revival Asda’s Rollback price-cutting campaign
• Restore a price 5 -10% price gap
• Ban Red signage
• Restore 98.5% availability vs 90%

However, he warned that it will take three to five years to fully restore Asda

Re Asda Finances: “Last time we put out our numbers, we had a billion of cash on the balance sheet. The last two or three years, we have probably generated £600m to £700m of cash flow. I’m not at all worried about it. What is our leverage? Three times. We have got £8.5bn of assets.”

A separate report by the Telegraph suggested that Asda’s high level of debt is putting pressure on executives to consider cashing in on the company’s sprawling property portfolio. In 2023, the company’s owners started looking into the sale and leaseback of various properties to help combat soaring interest bills on the debt.

Newsteer, which has been advising Asda on the latest land sales, recently issued a note to potential developers saying the supermarket had identified “surplus space” at stores in Slough, Reading, Burgh Heath near Epsom, Tilbury in Essex and Cardiff. Newsteer stated that developers could convert the car park land into new homes or shops that would sit next to the existing Asda supermarket.

A spokesperson for Asda is quoted by The Telegraph as saying: “It’s common practice for national retailers with large property portfolios like Asda, Tesco and Sainsbury’s to explore how best to make use of surplus land in their property estate. Prospective parties interested in these sites are advised to contact Newsteer.”

NamNews Implications:

• Asda is in a race against time…
• And ‘cutting’ can be the fastest approach.
• Meaning selling least profitable stores until a profitable estate remains.
• Meaning the use of store sell-off proceeds to pay down debt, thereby cutting the interest burden. 
• Meanwhile, cutting prices to a point that restores Asda’s relative competitive appeal and encourages profitable repeat sales.
• (never forgetting the PE exit strategy…)
• i.e. back to a race against time…

Asda Axing Bonus Payouts For Managers

Asda is reported to have told thousands of senior staff they will not receive their bonuses after a year of declining sales and market share.

According to The Telegraph, more than 10,000 managers have been told that they will not be rewarded with payouts owing to the supermarket’s faltering performance. Typically, managers expect to receive bonuses in the first three months of each year.

The newspaper noted that the bonuses are being axed just months after Allan Leighton returned to the retailer as Chairman, pledging to restore what he calls the “Asda DNA”.

The Telegraph stated that while slashing the bonuses could help fund price cuts that are part of Leighton’s turnaround plan, it is likely to hit already low morale on the shop floor.

A former senior Asda employee said: “Morale will be rock bottom. Even Allan won’t be able to pick them up from this. This will mean some of the top talent looking elsewhere.”

Fewer than half of workers said they were confident in Asda’s strategy in the supermarket’s most recent staff survey. It has also recently faced criticism from union chiefs over how it was making job cuts at its head office without forewarning.

One recruiter told the newspaper that the move on bonuses could lead to “anarchy” within the company. Senior managers are eligible for Asda’s bonus scheme and around 10% of its 134,500 employees received the award last year.

News that they will miss out this year comes just weeks after Leighton unveiled his first round of job cuts as part of a restructuring of its senior teams.

Leighton has warned that it could take as long as five years to revive the supermarket.

Clive Black, an analyst at Shore Capital, noted the new Chairman had injected “new energy”, but said what Asda needed was “a proper overhaul of the group’s engine, not just a 12-month service”.

Leighton is also under pressure to improve performance at a time of looming cost increases across the industry. Black said: “Costs are about to go a whole lot higher, with EPR [Extended Producer Responsibility scheme, a recycling levy], National Insurance and the National Living Wage.”

NamNews Implications:

• Morale impact:
• Good guys leave
• And those that cannot…
• And with the big cost increases yet to hit…
• i.e. EPR, National Insurance, National Living Wage
• (Meanwhile, the good guys apply to Aldi/Lidl?)

Aldi Outsourcing Head Office Jobs To Lower Wage Countries

Days after it was reported that Aldi UK is consulting over proposals that could see up to 350 roles cut at its head office in Atherstone, it has been revealed that the move is linked to the discounter outsourcing roles to lower-wage countries, rather than as an immediate reaction to impending tax hikes.

According to sources quoted by trade magazine The Grocer, Aldi has been outsourcing jobs in finance, human resources and buying, with a focus on administrative roles. The report stated that the discounter had been planning to outsource the roles to lower-cost third-party companies in Eastern Europe and India for about two years before news of the restructuring at its head office broke at the end of last month.

Commenting on the 350 job cuts last week, a spokesperson for Aldi said: “To support our continued growth and to offer the best experience to our customers, we are consulting over proposals to restructure some Head Office teams.

“No customer-facing roles are affected, and no final decisions will be made until the consultation process is complete. We are committed to supporting our colleagues throughout this process. Wherever possible, we will seek to redeploy affected colleagues within the business.”

Yesterday’s report by The Grocer said Aldi has not commented on outsourcing the roles.

In recent weeks, Sainsbury’s, Tesco, and Morrisons have all announced job cuts in the wake of the government’s decision to increase employer national insurance contributions and the minimum wage from April.

NamNews Implications:

• As anticipated, Aldi are cutting costs.
• And outsourcing, where practicable, has to be an option…
• …especially for a global organisation.
• With any savings reflected in shelf prices….
• …which means increased appeal of the Aldi offering.
• Unless we are missing something?