Tesco Sees Jump In Market Share As Consumers Shop Little And Often Amid Rising Temperatures And Prices

Kantar Latest: Grocery footfall a five-year high (4 weeks to 15 June), take-home sales up 4.1% vs 2024, jump in shopping frequency despite grocery price inflation 4.7% highest since February 2024, vs previous month 4.1%

Fraser McKevitt, head of retail and consumer insight at Kantar: “Higher prices didn’t stop shoppers making 490 million trips to the supermarket over the latest month, averaging almost 17 per British household. That’s the highest we’ve recorded since March 2020.” 

However, the rise in frequency was balanced out by a drop in average trip spend (down by three pence to £23.89).

McKevitt added: “Consumer concerns over price are continuing, and this is reflected in the figures. Sales of own-label ranges grew at 4.2% this month, ahead of branded lines, as shoppers looked to balance their budgets. Deals also remain an important tool for retailers to offer value, and the proportion of spending on promotion stepped up to 28.8% this period.”

Overall grocery volumes fell 0.4% in the last 4 weeks, the first year-on-year decline this year. Kantar suggested that a small part of this fall could be down to changing health priorities, including growing use of GLP-1 weight loss drugs (4 in 100 UK households in Great Britain now include at least one GLP-1 user, almost twice vs 2024). Four in five of the users Kantar surveyed say they plan to eat fewer chocolates and crisps, nearly 3 in 4 intend to cut back on biscuits.

Ocado was the fastest-growing grocer again, sales up 12.2% in 12 weeks to 15 June 2025 (more frequent visits to its website, strong performance in London and Southern England, market share 1.9%).

Traditional grocers:
Lidl was fastest growing at 11.2% (3rd consecutive month double-digit) - share 8.1%
Aldi share 10.9%, sales up 6.5%.
Tesco sales up 7.0%, share 28.1%.
Sainsbury’s share 15.2%, sales up 5.7%.
Morrisons’ grocery share slipped to 8.4% after spending in its stores only up 2.2%.
Asda’s share fell to 11.9%, till-sales down 1.7% vs the same period 2024, albeit an improving trend with growth expected to return over the summer months.
Waitrose sales up 5.5% – its best result since March 2021.
M&S grocery sales up 12.0% (cyber attack recovery)

NamNews Implications:

• The jump in shopping frequency (‘highest Kantar recorded since March 2020’) could also be a reflection of the tendency to shop around.
• Switching to own-label equivalents (sales up 4.2%) continues…
• …carrying with it the risk that ‘satisfied’ switchers might stick with the habit…
• …given the smaller-than-expected compromise.
• Lidl (sales up 11.2%) and Aldi (sales up 6.5%) now have a combined share of 19.0% (!).
• Tesco powers on (sales up 7%, share 28.1%) and Sainsbury’s (sales up 5.7%, share 15.2%)
• i.e. Tesco-Sainsbury’s and Aldi-Lidl have a combined share of 62.3%…
• …surely representing a continuing threat to Morrisons and Asda’s recovery ambitions.
• Maybe time for suppliers to rebalance retailer trading priorities?

Sainsbury’s Hikes Cost Of Meal Deal Again

Sainsbury’s has increased the cost of its standard meal deal by 5% – the second hike in less than a year.

According to trade publication The Grocer, the price of a main product, a side, and a drink at the supermarket has risen this week from £3.75 to £3.95. This follows a 25p increase in July 2024, meaning the price of the Sainsbury’s meal deal has increased by 12.8% over the last year.

The cost of its premium meal deal has remained unchanged at £5 since it was introduced in 2022.

Sainsbury’s did not tell The Grocer what was driving the latest price increase. However, the report noted that the supermarket has recently expanded its food-to-go range, adding 35 new products.

The hike means Sainsbury’s meal deal is now priced significantly higher than its rivals. Tesco’s equivalent meal deal costs £3.60 for Clubcard members, whilst Morrisons charges £3.60 for More Card holders.

A Sainsbury’s spokesperson insisted that it “continued to offer one of the best value meal deals around”.

NamNews Implications:

• Consumers who benchmark inflation by the official stats…
• …will perceive a 12-month 12.8% increase in price of a Meal Deal as greater than inflation.
• Couple this with the fact that Sainsbury’s ‘meal deal is now priced significantly higher than its rivals’…
• …means that Sainsbury’s and rivals will watch consumer reaction with interest.

Retail Sales Tumble After ‘Dismal’ Month For Supermarkets

Retail sales in the UK suffered their steepest drop in 18 months last month as consumers cut back on purchases of food and household goods.

Figures from the Office for National Statistics (ONS) show sales volumes slid 2.7% month-on-month in May, a much worse result than the 0.5% decline forecast by economists.

After a 4.7% jump in April, food stores saw a drop of 5% in May. This was led mainly by reduced volumes in supermarkets as shoppers made cutbacks amid rising inflation in the sector, alongside reduced sales of alcohol and tobacco products.

In non-food stores, sales volumes slid 1.4% over the month, mainly because of falls in clothing (-1.8%) and household goods (-2.5%). The downturn was blamed on reduced footfall and consumers completing home projects earlier than usual this year because of good weather.

The monthly fall is the first this year and follows a 1.3% rise in April when unusually sunny weather boosted demand. On a year-on-year basis, retail sales volumes were down 1.3% in May.

The disappointing figures come amid growing evidence that the UK economy is cooling after a robust start to the year. The economy contracted in April by 0.3% (ONS) as businesses cut jobs and cancelled investment plans in response to higher taxes and the uncertainty created by Donald Trump’s tariff war.

Paul Dales, Chief UK Economist at Capital Economics, commented: “The sharp 2.7% m/m drop back in retail sales volumes in May adds to other evidence that the burst of economic growth in Q1 is over. That said, consumer spending may still outperform other areas of the economy this year.”

Meanwhile, Nicholas Found, Head of Commercial Content at Retail Economics, said: “May’s retail performance underlines a shift in consumer behaviour, with households putting value at the centre of spending decisions and pulling back on non-essential purchases. This follows a tough April that saw discretionary budgets squeezed by rising household bills.

“The cost of living remains the dominant concern for households. An uptick in food inflation is especially visible to shoppers, acting as a psychological anchor on confidence that hits non-essential retail spending.

“Households are deferring spending on full-price fashion, big ticket home items and other discretionary goods, instead prioritising travel and experiences into the summer.

“Retailers are now in the precarious position of needing to stimulate demand without eroding margins. But with a £6.5bn surge in operating costs this year, driven by increases in employment costs, business rates and utilities as our research with Barclays Corporate Banking shows, many are entering the summer trading period under significant pressure.”

NamNews Implications:

• Hopefully, only the authorities are surprised by these developments…
• i.e. any realistic business sees a market made up of uncertainties and inevitabilities…
• …where any real growth has to come at the expense of rivals.
• Deep down, people don’t trust what they are being told…
• …and are cutting back accordingly.

Waitrose Announces Plan To Open First New Supermarket In Seven Years

Waitrose has revealed plans to open its first new full-line supermarket in seven years. The 30,000 sq. ft. store will be built at Brabazon, a new town in North Bristol, and is expected to open in 2027.

The grocer signed a multi-million-pound agreement with developer YTL Developments to secure the site. The new supermarket will be located in a prime position on the A38 Gloucester Road at the gateway to Brabazon and 500m from a new train station, which is expected to open in 2026.

It will occupy the ground floor of a seven-storey office building, served by an adjacent multi-storey car park with space for over 1,500 vehicles.

Last year, Waitrose announced plans to inject £1bn over the next three years into new stores and improvements to 150 existing shops, almost half of its estate. Whilst it has opened several convenience stores in recent years, it hasn’t opened a new full-line supermarket since before the pandemic.

In May, Waitrose opened its first new store outside London in over six years, with a new convenience outlet in Southwick, West Sussex. Another Little Waitrose shop is due to open in St Andrews, Bristol, before the end of the summer. And later this summer, two more franchised stores will open at Welcome Break road service areas in Hickling, Leicestershire and Newark, Nottinghamshire.

Meanwhile, more than 20 Waitrose sites will undergo refurbishments this year, almost double the number year-on-year.

“We are moving up a gear in store investment as we open in new locations and modernise our existing estate to bring the quality, service and value that customers love about Waitrose closer to more people,” said James Bailey, Managing Director of Waitrose.

“Brabazon is one of the most exciting new city districts in the UK, driving the growth of one of the UK’s most vibrant and successful regional economies. Partnering with YTL Developments at Brabazon underlines our ambition and the opportunity we believe we have to grow our reach.”

NamNews Implications:

• Waitrose appears to be sufficiently confident in their turnaround…
• …that they are committing to new store investment and an upgrading of the current estate.
• With the plan for a new supermarket being an overt demonstration of their intent…
• …time for suppliers to reassess their Waitrose trade strategies in order to keep pace.

Tesco Sent Stock To Retailers Impacted By Cyber Attacks

Tesco’s CEO has revealed that the group’s wholesale arm stepped in to supply extra stock to Marks & Spencer and some Co-op societies when their operations were impacted by cyber attacks last month.

Speaking after posting robust first quarter results yesterday, Ken Murphy said that M&S and some of the Co-op’s independent societies asked Booker for support sourcing products while their supply systems were down.

“Over the period when they’ve been impacted, Booker has supplied both M&S and Co-op with products and supported them in any way they could,” he told The Times. “They asked us to supply products, and we said yes.”

In M&S’s case, Booker is understood to have increased deliveries of third-party branded items, such as Marmite and Coca-Cola, and shipped more items directly to shops.

The main Co-op Group did not request assistance for its stores, but the report by The Times said that some of its independent societies temporarily turned to Booker.

The support was short-term, and both companies have since restored their operations after the cyber attack.

Last week, Co-op said its recovery from the hacking incident was nearly complete.

M&S was arguably the worst affected, with it facing a hit of around £300m from the attack. Data released this week confirmed that sales in its food stores fell significantly during the period after it struggled to keep shelves stocked.

Tesco, which yesterday reported a better-than-expected 5.1% increase in like-for-like sales during its first quarter, insisted that this had not been because of the cyberattacks at M&S and Co-op. “We haven’t seen any uptick in activity or attacks since some of our competitors were attacked,” Murphy said. “We haven’t seen any material changes.”

He emphasised that cybersecurity was at the “top of my inbox on a daily, weekly basis”, adding: “We stay on top of cyber all the time. We have invested continuously in upgrading our cyber capabilities because this is a moving target all the time. As the sophistication of potential attackers improves, we have to keep investing behind it.

“We stay very vigilant. We invest substantially behind it. We seek to learn from what’s going on in the industry”.

NamNews Implications:

• This brought to mind an old comment picked up from a retailer in Tokyo about its rivals:
• “Of course we compete, but only on certain things”
• Tesco’s move will not be forgotten…

Poundland’s Sale Exposes Cracks In Value Retailer

Following yesterday’s news that Poundland has been sold for less than £1 to turnaround firm Gordon Brothers, Emily Scott, retail analyst at GlobalData, offers her view:

“Poundland’s sale comes amid mounting losses and declining revenue, as it has faced intense competition and the distraction of the failed introduction of its Pepco clothing and general merchandise range.

“Poundland’s appeal was rooted in its straightforward approach to value with a single price point. However, in recent years, the retailer has strayed far from this. The introduction of multiple price points has confused customers, while still not enabling shoppers to trade up within its ranges as it lacks the additional choice of mid to premium products. Poundland has lost out as consumers are becoming more discerning, seeking a better balance between quality and value for money, driving them to trade up.

“The British variety store chain has also faced increasing competition from the grocers, particularly as Tesco has leveraged its Clubcard loyalty scheme to offer customers exclusive discounts and enhanced value.

“GlobalData estimates that Home Bargains, B&M and The Range’s market shares in the UK discount market have increased by 7.2ppts, 6.2ppts and 1.3ppts, respectively, between 2019 and 2024, while Poundland’s share has fallen 2.3ppts. Poundland’s weak variety of branded goods at low prices has meant it has struggled to keep pace, damaging its brand perception amongst budget-conscious shoppers.”

NamNews Implications:

• Poundland’s success to date depended on decades of near-zero inflation.
• Meaning the £1 proposition was viable for much longer than normal.
• A return to ‘proper’ inflation rates undermined everything.
• With the inevitable result.
• Good while it lasted…

Sales Growth Accelerates At Tesco Despite ‘Intensely Competitive’ Market

Tesco has reported better-than-expected first-quarter sales growth as improvements in its product range and price competitiveness helped it win market share from rivals. However, the UK’s leading grocer left its annual profit guidance unchanged, with its CEO Ken Murphy noting that the market “remains intensely competitive”.

UK like-for-like sales up 5.1%, 13 weeks to 24th May vs 4.3% rise in previous quarter, 24 consecutive four-week periods of market share gains, now 28.0%, highest since 2021.

Tesco said its success was due to a 65bps YoY uplift in its brand perception (improvements in service, quality, and value). It price matches Aldi on 600 lines, 9,000 Clubcard Prices/week.

During the quarter, Tesco’s food sales were up 5.9% via fresh categories and 350 new Finest products, sales up 18% (home dining)

Non-food sales (excluding toys) up 6.2% via home and clothing.

Growth in all channels, (online sales up 11.5%, market share up 163bps).

Murphy: UK outcome reflected “our powerful value proposition, strong availability and focus on product quality and innovation”.

Republic of Ireland LFL sales up 5.5% (continued investment in fresh drove food sales up 5.8%).

Booker LFL sales up 2.0% (continued decline in tobacco and its Best Food Logistics unit) - catering sales up 7.3% and retail business up 5.4% (symbol brands).

Central Europe LFL sales up 4.1% (produce, dairy and bakery categories drove fresh food sales up 7.3%).

It still expects to report adjusted operating profit of £2.7bn to £3.0bn for year ending Feb 2026, vs £3.13bn 2024/25.

It had revealed in April that it expected profit to fall this year as it set aside cash to deal with a step-up in the “competitive intensity” of the British grocery market – (Asda pledge of sustained Asda price cuts to win back market share).

“We’re definitely seeing an intensification in competition, I think that broadly, though, it’s been a rational intensification, in the sense that everybody is kind of staying toe-to-toe with each other,” Murphy told reporters.

“So you’re not necessarily seeing massive movements in relative competitiveness, but everyone has, I think, upped their game a notch.”

He noted that price inflation at Tesco was running below the industry rate, which rose to 4.1% in May (Kantar).

Most analysts think Tesco’s strategy of price matching Aldi on key lines, together with its popular Clubcard Prices promotion, is working well. It is also becoming increasingly digital and developing growth avenues such as its online Marketplace and retail media unit.

“Tesco appears to be in a better position than many of its peers,” said John Moore, wealth manager at RBC Brewin Dolphin.

NamNews Implications:

• Tesco is patently firing on all cylinders…
• …and making it work, in unprecedented market conditions…
• …whilst determined to neutralise Aldi’s potential competitive edge.
• (It follows that they will increasingly require similar market fitness from its partner-suppliers)

Sainsbury’s Trialling ESLs

Sainsbury’s has become the latest supermarket to start testing electronic shelf labels (ESLs) that can offer significant efficiencies for store operations.

The retailer has installed the technology in three of its larger shops and has been trying it out across different sections, including alcohol, health, and general merchandise.

Replacing paper shelf edge labels with ESLs can offer retailers several advantages, including being able to display more product data and change prices instantly without the need for time-consuming manual updating by shop floor staff.

Price discounts and promotions can also be communicated more easily, whilst eliminating paper waste associated with traditional labels.

A spokesperson for Sainsbury’s said: “We are trialling electronic shelf-edge labels in a small number of our stores,” without providing any further details.

Last month, Co-op confirmed that it is working with VusionGroup to replace paper shelf edge labels with ESLs across all its 2,400 convenience stores.

Waitrose and Asda have also started trialling them in some of their convenience stores, whilst Lidl, Aldi, and several regional Co-operatives have been rolling out ESLs in recent years.

Despite the benefits, the leading multiples, including Tesco and Sainsbury’s, have been slow to adopt the technology.

NamNews Implications:

• Surprising it took so long…
• But now inevitable, in terms of adding some tweaks to on-shelf availability.
• (and providing another way to optimise Retail Media…)