Asda Outlines Plans For Range Reset

Asda told suppliers at its annual conference in Leeds this week that it was launching a reset of its product offer “bay by bay” as it looks to accelerate its turnaround plan, which its Chairman, Allan Leighton, said was “30% complete”.

According to trade publication The Grocer, the struggling supermarket’s recently returned Chief Commercial Officer, Darren Blackhurst, announced an overhaul of its commercial strategy at the event, with suppliers being told the reset would be based around SKU duplication removal, rather than a range cull, with a focus on core lines, more space and better buying.

In addition to a drive for greater simplicity, Blackhurst is reported to have said that Asda’s buyers would seek to reset the relationship with suppliers by focusing less on its troubles and spending more time building partnerships.

Meanwhile, Leighton reiterated Asda’s drive to become up to 10% cheaper than its traditional supermarket rivals, arguing that growth in the discount channel was limited for brands, given that Aldi and Lidl were continuing to prioritise own label.

Speaking to The Grocer after the event, Blackhurst said: “As we shared at the event, a strong Asda benefits everyone, and there is a big opportunity to build the right customer proposition together and unlock profitable growth.

“We’re focused on simplifying how we work by reducing duplication, making better use of space to sell more volume and improving choice by strengthening our own-brand and premium ranges. As we start to buy better and build better relationships with key suppliers, we can maximise efficiencies, reinvest in price, drive volume, and ultimately grow market share.

“We want to work with our suppliers constructively and in a collaborative way to improve the offer for the 20m customers who shop with us every week. Our buying teams are looking forward to getting out to meet our suppliers in the coming weeks to build on their plans.”

NamNews Implications:

• SKU duplication removal, rather than a range cull…
• …a focus on core lines, more space and better buying…
• …more time building partnerships…
• …to build the right customer proposition together.
• And all against the clock.
• Over to you…

Aldi Rolling Out Reduction Zones

Aldi is rolling out dedicated reduction zones across its stores in the UK to make it “even easier for shoppers to find fresh food bargains”.

The marked areas will feature discounted bread, fresh produce, and other perishable items nearing their use-by date. Items are discounted throughout the day, allowing shoppers to save on products that might otherwise go unsold.

The discounter stated the move was part of its commitment to making food more affordable, while tackling waste in its operations.
“Our customers already know they can rely on us to provide unbeatable value, but our new reduction areas will make it even easier to pick up a last-minute bargain,” said Luke Emery, National Sustainability Director at Aldi UK.

“By creating dedicated reduction zones in store, we’re helping point shoppers towards quality food at cheaper prices, all while cutting down on food waste.”

NamNews Implications:

• Using food waste prevention is a clever way of discounting within a ‘best price’ model.
• i.e. Aldi can thus maintain the integrity of their main offering:
• - they launch at their best value price, not possible to go lower...
• …whilst doing good for customers in need.

Asda Rolling Out ESLs Across Express Stores

Asda has announced that it is rolling out electronic shelf labels (ESLs) across its largest and busiest Express convenience stores as part of its efforts to simplify operations.

Working with VusionGroup and its partners, Renovotec and HL Display, the rollout to 250 sites follows a three-month trial at Asda’s Oxford Road Store in Manchester. The trial found that the technology freed up staff time, allowing them to focus on customer service, managing deliveries, and replenishing shelves.

Approximately 2,800 separate electronic shelf labels (over 700,000 across the entire rollout) will be added to each store, meaning Asda’s staff will no longer need to manually update pricing in-store. The technology can also display allergen information at shelf edge through QR codes, in addition to displaying the cost, weight and unit price of products.

Asda recently announced that it was resuming its Express store opening programme after a pause to focus on converting the 469 sites it acquired from the Co-op and EG Group. Up to 20 of the convenience stores are due to open before the end of the year, starting with Castleford on Wednesday of next week. Each new Express site will feature the ESLs from day one.

“We’re continuing to invest in enhancing our stores, and the launch of cutting-edge technology across our Express estate is proof of this,” said Joseph Sutton, VP Asda Express, foodservice and fuel.

“By streamlining our in-store operations, we can free up our colleagues to focus on what they do best – serving our customers. With the first of 20 new Express sites set to open next, we’re excited to build on this momentum and to bring Asda’s trusted value to even more communities across the UK.”

Roy Horgan, CEO UK & Ireland – VusionGroup, added: “We are proud to be extending our partnership with Asda as they accelerate their digital transformation. This next phase is a testament to both Asda’s digital ambition and the strength of VusionGroup’s market-leading technologies. By combining ESLs with IoT innovation and data-rich insight, we are helping to transform the in-store experience for Asda customers and colleagues.”

NamNews Implications:

• Key benefits in practice:
• Free up existing staff to improve in-store service level (rather than cut staff numbers per store)
• Add unit pricing (hopefully enabling true like-with-like price comparison)
• Error reduction in on-shelf pricing (either via delays in adding updates or genuine errors)
• Given those conditions, the ESL rollout should make a difference…

Tesco Sees Consumers Sticking With Cost-Of-Living Crisis Habits

After posting robust half-year results yesterday, Tesco highlighted that consumers were sticking with behaviours that emerged at the start of the cost-of-living crisis in 2022, such as eating more at home.

“When we had the first cost of living crisis three years ago, there was quite an adjustment in shopping habits at that stage, and those habits have stuck,” said the group’s Chief Executive, Ken Murphy.

Tesco noted that it was continuing to see a strengthening of the ‘dining in’ trend, with consumers opting for premium supermarket products over a trip to a restaurant, partly to save money.

Murphy said this was evidenced by year-on-year sales growth of 16% for its premium own-brand Finest in the first half, marking a third consecutive year of double-digit sales growth.

“It might be kind of a Covid hangover, it might be part of the Netflix phenomenon of dine in, watch a movie, have a bottle of wine, and (Finest’s) a great proposition at great value, it could be a money-saving exercise,” he said.

“It’s hard to put your finger on what the single reason for the trend is, but it is definitely a trend.”

Murphy also pointed to a recent trend of people buying more fresh food to cook more from scratch. Tesco’s food like-for-like sales in its domestic market rose by 5.7% during the six-month period to 23rd August, with a “strong volume performance” from fresh food, driven by “ongoing range development, focused on product quality and innovation”.

Meanwhile, Murphy noted that consumers were also concerned about the upcoming government budget, which is expected to include tax increases, as well as the economic outlook for the UK. He urged the Chancellor Rachel Reeves to deliver a “pro-growth and pro-jobs” budget on 26th November.
“In the last budget, the industry and the sector incurred substantial additional operating costs, we’re doing our best to deal with them, but enough is enough,” he added.

NamNews Implications:

• For anyone who’s been ‘abroad’ for the past couple of years, this means:
• Switching from brands to premium own label…
• …and finding the ‘compromise’ less than expected
• (Witness the difficulties experienced by brands in winning them back).
• Seeking true like-for-like price comparison (time for unit pricing to live up to its promise).
• Willingness to shop around for value (in part to Aldi & Lidl advantage…)
• ‘Sticking with cost-of-living crisis habits’ means sticking with cost-of-living crisis habits.

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…