Asda Closing In On Major Property Deal That Will Boost Recovery Funds

Asda is reported to be in advanced talks about a £400m deal to offload some of its real estate assets to an investment house to help fund its turnaround plans.

According to Sky News, Blue Owl Capital, a New York-listed asset management group, has emerged as the frontrunner to buy roughly 20 Asda supermarkets and lease them back to the struggling retailer. Sources indicated that a deal could be formally agreed upon within weeks.

Asda has undertaken sale & leaseback deals in the past, notably in 2023 when it struck a £650m deal with US-based Realty Inc.

A spokesperson for the retailer declined to comment on the talks with Blue Owl Capital but said: “Sale & leaseback [transactions] have been a feature of the retail industry for many years.

“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

While sales at Asda are still in decline, recent industry data suggests that there are signs of recovery after significant investment in cutting prices and improving its offering.

NamNews Implications:

• Sale & leaseback represents a capital gain for a struggling business.
• But it can add an additional rent burden…
• Asda need the money but is obviously intent on keeping sale & leaseback to a minimum.
• (keeping in mind an exit strategy that will optimise the ‘eventual’ sale/refloat of the business)
• Meanwhile, fingers crossed…

Supermarket Price War Impacting Profits At Iceland

Intense price competition in the supermarket sector is impacting profit growth at frozen food specialist Iceland.

According to The Telegraph, the retailer has recently informed bondholders that its underlying profits increased by only 0.6% to £317.6m in the year to the end of March 2025, compared to a 24% rise in the prior year.

Revenues were largely flat at £4.2bn, although its previous financial year – when sales rose 6.6% – was boosted by an additional trading week. On a comparative 52-week basis, sales were up 3% this year.

The report noted that the profit slowdown follows Iceland pushing to keep prices lower as supermarkets battle to attract cash-strapped shoppers.
Iceland has been stepping up its programme of multibuy promotions.

This meant that while the number of items it sold last year increased by 5.3%, it did not see a rise in value sales.

Credit rating agency Fitch said shoppers continued to turn to Iceland for value “despite heightened competition”. However, its market share has remained relatively flat in recent years at around 2.3%, with latest industry data from Worldpanel by Numerator showing the group’s sales grew only 2.8% over the 12 weeks to 13 June, well behind the leading supermarket multiples and discounters.

Fitch added: “We expect Iceland’s product offering to remain competitive for UK food consumers with weaker spending power.”

However, the credit ratings agency raised concerns over Iceland’s profitability, suggesting the chain would have to continue investing in price cuts at a time when it is battling higher costs. Fitch said: “The company, along with other UK-based retailers, will be hit by the rise in National Insurance and minimum living wage contributions from [this year], which we estimate will result in an additional cost of £50m.”

Iceland’s Chairman, Richard Walker, said earlier this year the National Insurance hike had “added greatly to the cost of business”.

Meanwhile, Iceland’s Chief Executive, Tarsem Dhaliwal, said in April that the company was bracing for surging food costs. Speaking to trade publication The Grocer, he noted that the biggest concern was rising prices being imposed by its suppliers.

He said: “The reality is that we have to be conscious of the fact our suppliers are going to pass the costs onto us, literally straight away. We can’t absorb all that, I don’t think any retailer can, so there’s going to be food inflation.”

NamNews Implications:

• Consumers are shopping around for value via a combination of promos and own-label ‘equivalents’.
• i.e. business is there for the asking…
• …meaning Iceland have had to take a hit on profits to attract their fair share.
• With more cost increases in the pipeline…
• …Iceland are signalling the inevitability of having to raise shelf prices.

Asda Planning Major Upgrade To Stores In Yorkshire

Asda has marked Yorkshire Day (1st August) by unveiling a major store investment programme in its home county as part of its drive to improve the in-store experience for its customers.

The struggling supermarket is investing £7.2m to upgrade stores in Kingswood, Harrogate, York, Pudsey, and Keighley by the end of 2025.

Each store included in the programme will benefit from full shop floor refurbishments, including a “simpler and more intuitive” layout, as well as new lighting and signage – all designed to modernise the shopping space.

An additional £4.6m will be invested in two stores in the surrounding area – Grimsby and Stockton – with the retailer aiming to extend the programme to more UK locations next year.

Work will begin in most stores in September and is expected to take around seven weeks per store.

“We’re proud to continue investing in the communities we serve – especially in Yorkshire, where our story began 60 years ago,” said Liz Evans, Chief Commercial Officer – Retail and Non-Food.

“Following the successful refurbishment of our Pilsworth store earlier this year, we’re pleased to share our plans to modernise these Yorkshire stores and further enhance the shopping experience.”

While sales at Asda are still in decline, recent industry data suggests that there are signs of recovery after significant investment in cutting prices and improving its offering.

NamNews Implications:

• Logical for Asda to invest in its stronghold.
•  And if they can make it work there, they can make it work anywhere…’
• Hopefully....
• But the real issue is Asda’s fight against the clock…
• …as stakeholders await the EBITDA 'bottom line' impact.

Lidl Overtakes Morrisons In Food & Drink Share Ranking

Lidl is now the UK’s fifth-biggest supermarket in terms of food and drink sales, overtaking Morrisons.

According to Worldpanel data seen by trade publication The Grocer, the discounter’s share of sales of fresh, chilled and ambient groceries, but excluding alcohol, household, toiletries and healthcare, was 7.7% over the year to 13 July, compared with Morrisons’ 7.6%.

The report said that Lidl’s food and drink share had risen from 7.3% in the previous 52 weeks, after its sales grew by 10.1%. In contrast, Morrisons’ food and drink share has fallen from 7.8% after its sales only rose by 1.5%.

The Grocer noted that the food and drink figures are different to those included in Worldpanel’s monthly published market update, which covers all expenditure through store tills, excluding petrol and in-store concessions.

Those figures show Morrisons narrowly retaining its lead, with a market share of 8.4% over the 12 weeks to 13 July, compared with Lidl’s 8.3%, which was a record for the discounter after another strong period of growth.

The report said that Lidl is likely to overtake Morrisons in those numbers in the new year, given its expansion plans. The discounter recently revealed that it will open its 1,000th store in the UK this November, 31 years after making its market debut.

Responding to the figures published by The Grocer’s, a spokesperson for Morrisons is quoted as saying: “The numbers are partly a function of new supermarket openings, where we haven’t added new space for some time, and the survey doesn’t capture all of the growth we are seeing in convenience and wholesale, and our Myton manufacturing business.”

A spokesperson for Worldpanel added: “We do not publish retailer market share data for select categories. Our grocery market share release provides a full view of grocers’ performance, including all expenditure through store tills except petrol and in-store concessions.”

NamNews Implications:

• Overtaking Morrisons’ share of sales of fresh, chilled and ambient groceries will not go unnoticed where it matters.
• Especially in Lidl and Morrisons organisations.
• With the likelihood of Lidl overtaking in the headline market share numbers in 2026, Morrisons will have a cause of even greater concern.
• At which point, suppliers may begin to weigh their options regarding the relative levels of investment in either retailer.
• A pointer for all…

Supermarket Loyalty Waning

Reward, a customer engagement and commerce media specialist, has unveiled new consumer spending insights that confirm a continued decline in brand loyalty among UK grocery shoppers.

The data shows switching behaviour among shoppers has accelerated since 2023, with June this year marking a new high – 41% of consumers moved away from their primary grocer. Discounters are benefitting most from this shift as shoppers manage their budgets, claiming a market share of 20% in June, higher than their 2025 average of 19.3%.

Meanwhile, cross-shopping is now the norm, with 80% of consumers using two or more grocers in June and the average shopper visiting 3.2 different grocers.

Reward noted that these behaviours reflect the growing importance of price, availability, and perceived value in shaping grocery choices – key themes explored in its newly released report – The Trends Reshaping Grocery Spend – which analyses six years of evolving consumer behaviour.

The insights highlight a series of trends that have become firmly embedded in how UK consumers shop for groceries. Key takeaways include:

• Top-up shopping dominates: In 2025, 67% of grocery transactions were smaller, frequent shops – up from 61.5% in 2019. The big weekly trolley shop is increasingly being replaced by ‘little and often’ purchases that reflect immediate household needs.
• Online is embedded: Online grocery shopping accounted for 11.4% of spend in June, a figure that has remained stable post-pandemic, indicating online is now a standard channel for all types of shopping missions, not just a contingency.
• Value is more than price: While discounters gain ground, full-range grocers that invest in personalised supermarket loyalty schemes and convenient multichannel experiences have maintained around 42% of market share since 2019. Consumers are weighing price alongside quality, convenience, and the benefits offered through loyalty.

Paul Jones, SVP data & insights at Reward, commented: “Our insights confirm a key trend that’s been building: loyalty isn’t dead – it’s evolving, and it must be earned. Grocers can no longer depend on routine habits; today’s shoppers are selective, value-driven, and quick to switch.

“In this environment, deeply understanding customer behaviour and market dynamics is more critical than ever. Retailers that harness data-driven personalisation and activate contextual spend insights through commerce media strategies will be best placed to drive meaningful engagement, long-term loyalty, and sustained growth in an increasingly complex landscape.”

NamNews Implications:

• Worth keeping in mind that the same could be said of supplier branding.
• i.e. Brand loyals now prepared to ‘shop around’ for other brands and own-label equivalents in a search for real value, rather than ‘price’.
• More inclined to identify and criticise instances of shrinkflation and skimpflation.
• ‘paying more and more, for less and less)
• And prepared to ‘tell a friend’.
• Unprecedented change, indeed…

Pepco Hires Advisors To Oversee Poundland’s Transition To New Ownership

Weeks after striking a deal to sell Poundland to investment firm Gordon Brothers, Pepco Group has hired advisers to oversee the struggling discounter’s transition to its new owner through a court-sanctioned process that will involve store closures and job cuts.

According to Sky News, the company has drafted in FRP Advisory to act as an observer, with the High Court scheduled to sanction Poundland’s restructuring plan in the last week of August.

Under the proposed deal announced in June, 68 Poundland shops will close in the short term, along with two distribution centres. The retailer is also seeking rent reductions at other sites, ending its online operation, and reducing its food offer.

More shops are expected to be shut under Gordon Brothers over time, resulting in hundreds of job losses.

Barry Williams, Managing Director of Poundland, said at the time of the deal’s announcement: “It’s no secret that we have much work to do to get Poundland back on track.

“While Poundland remains a strong brand, serving 20 million-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth.

“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores.”

NamNews Implications:

• Poundland’s restructuring plan is both logical and essential…
• …the only realistic way of moving forward.
• i.e. Poundland has to be cut to fit available demand, as a basis for recovery and growth.
• Hopefully all stakeholders will share that view…

Private Label Seeing Strong Growth In The US Grocery Market

During the first half of 2025, private label value sales in the US increased 4.4% in all outlets vs the same period last year, compared to a 1.1% gain for national brands, according to Circana data provided to the Private Label Manufacturers Association (PLMA).

In unit sales, store brands posted a 0.4% increase, while national brands fell 0.6%.

“It’s exciting to see store brands continue on a strong trajectory this year,” said PLMA President Peggy Davies. “Shoppers are clearly recognising the unbeatable combination of quality, value, and innovation that store brands bring to the table.”

Overall, store brand market share for the first half of the year increased to 21.2% for dollars and 23.2% for units, both all-time highs.

Looking at departments, store brand dollar sales for the year to 15 June increased in seven of nine sections, led by Refrigerated, which was up 13%, followed by Beverages (+4.8%), Frozen (+3.8%), General Food (+2.5%), Pet Care (+2%), Home Care (+1.4%), and Beauty (+1.1%). General Merchandise (-0.4%) and Health (-0.1%) were down.

In unit sales, store brands were ahead in all but one department, with Beverages (+4.2%) showing the way, followed by Home Care (+3.4%), Pet Care (+3.3%), Frozen (+2.1%), Refrigerated (+1.3%), General Food (+1.2%), Beauty (+0.4%), and Health (+0.3%). Only General Merchandise (-2.5%) was off.

PLMA projects total store brand sales for 2025 will approach $277bn, compared to a record $271bn in 2024.

“Now is the time to lean in,” Davies said, pointing to the importance of retailer and supplier collaboration in fueling further growth.

She urged industry stakeholders to participate in PLMA’s upcoming educational and networking programs, including the annual Private Label Trade Show in November and various executive development initiatives.

NamNews Implications:

• Evidence of a slow but definite switch from brand to own label.
• And if macroeconomic/business trends continue ‘as usual’…
• …stakeholders might anticipate the current US brand/own-label volume split of 77/23…
• …could approach UK volume 40/60, eventually.
• (Meanwhile, worth considering the UK’s possible settling point?)

Grocery Price Inflation Continues To Accelerate; Lidl Reaches Record Market Share

Latest figures from Worldpanel by Numerator: UK take-home sales up 5.4% during the 4 weeks to 13 July compared to 2024 (accelerating price inflation, with the highest level since January 2024 at 5.2%).

The average household spends £5,283 each year at supermarkets, which means the latest rise could add £275 to people’s grocery bills if their shopping habits stay the same.

Fraser McKevitt, head of retail and consumer insight: “Own label products, which are often cheaper, continue to be some of the big winners and, in fact, sales of these ranges are again outpacing brands, growing by 5.6% versus 4.9%."

Inflationary worries are not only changing what we buy food but also its preparation (simpler meals to save money, almost seven in ten dinner plates include fewer than six components).

McKevitt said: “Innovation is absolutely vital to help grocers keep up with new trends and make sure they’re meeting shoppers’ needs as behaviours and priorities shift."

The drinks aisle:
Iced coffee has soared in popularity in recent years, and with summer temperatures rising, sales were up this month by 81%.

Kombucha drinks sales more than doubling over the latest four weeks vs 2024. 

No and low alcohol drinks continue their gradual march into the mainstream too, with nearly seven in every 100 households buying a product this month, pushing sales up by 21%.

Individual retailers:
Lidl reached a record high market share this period at 8.3%, gaining 0.5 percentage points as it attracted more than half a million new customers to its stores.

Aldi sales up 6.3%, share up to 10.9%.

Tesco share 28.3% after sales grew by 7.1%, the fastest rate since December 2023.

Sales at Sainsbury’s increased by 5.3%, raising its market share to 15.1%.

Matching its previous share high of 2.0%, Ocado was again the fastest-growing grocer in the UK. Its sales rose by 11.7%, exceeding the overall online market growth rate of 5.7%.

Over the past 12 weeks, online accounted for 12.0% of all sales at the grocers, with 23% of households making at least one virtual shopping trip.

Meanwhile, grocery sales at M&S were 6.5% higher than a year ago.

Spending through the tills at Morrisons nudged up just 1.0%, with its market share falling to 8.4%.

Despite its turnaround efforts, Asda’s share of the market slipped to 11.8% after a 3.0% fall in sales.

NamNews Implications:

• Consumers are patently being affected by the 5.2% inflation ‘peak’ (and more to come)…
• …in terms of more savvy food spending and eating carefully to conserve cash.
• Temporary moves (like brand to own label equivalents)…
• …may prove difficult/expensive for suppliers to reverse.
• Innovation in some categories may help.
• Lidl continues to find top of mind for retailers and suppliers (raising questions re their role in trade strategies?)
• Meanwhile, the discounters’ joint share of 19.2%…
• …if not raising concerns, should be.
• By the same token, the falling shares of Morrisons and Asda cast a shadow…