UK roundup: AI partnership and sustainability news

Tesco announce partnership to boost use of AI within its operations

Tesco has announced a three-year partnership with French AI start-up Mistral AI. The partnership will see Tesco gain full access to Mistral AI’s commercial models, including future developments and support from its AI engineers, as the retailer seeks to increase the use of AI in its operations. The agreement also includes a commitment to work together through a joint AI lab to co-create new generative AI solutions for Tesco. These will support content development and document drafting, speeding up data analysis, and create new ways for staff to access information to support shoppers.

IGD Senior Insight Analyst, Alex Rowberry‘s view:

While delivering immediate benefits to operational efficiency, the most strategically important element of this partnership is Tesco’s access to new developments at Mistral AI. This helps ensure Tesco remains at the forefront of a fast-developing technology, with the potential to gain first-mover advantages from these innovations.

Asda removes thousands of SKUs as part of simplification strategy

Asda has reduced its SKU count by “north of 4,000” in 2025. As reported by The Grocer, the move follows comments made in March by Asda Chairman Allan Leighton, who said he wanted to see the retailer’s SKU count reduced by 5,000-6,000 over a 12 month period. Achieving this would take Asda’s total SKU count to around 24,000. The announcement follows news in October that Asda was undertaking a “bay-by-bay” reset aimed at removing product duplication.

IGD Senior Insight Analyst, Alex Rowberry‘s view:

Reducing SKU count forms an important part of Asda’s strategy to be 5-10% cheaper than full-line rivals. Removing slow selling products frees up space for lines delivering higher volumes, helping to ensure availability throughout the day and supporting greater operational efficiency. The news follows the £12m renewal of seven stores across Yorkshire, which has seen Asda bring its simpler shopping ethos beyond ranging by improving store layout, navigation and overall ease of shop.

Tesco expands Nature Programme with two new partnerships

Tesco has announced two new partnerships as part of its plans to enhance biodiversity on farmland and strengthen nature protection across key sourcing regions in its supply chain. The new initiatives include introducing regenerative agriculture practices in Côte d’Ivoire’s cocoa supply chain with the Earthworm Foundation, and a seagrass restoration project in the Northeast Atlantic with the social enterprise Sea Ranger Service. Launched in 2023, Tesco’s Nature Programme now includes five projects involving NGOs, over 30 suppliers, and 130 farms working on habitats, pollinators, soil health and water quality across 18 high-risk commodities.

IGD Supply Chain Analyst, Soline Duriez’s view:

Tesco’s expansion of its Nature Programme shows a clear commitment to tackling biodiversity loss within its own supply chains. Bringing specialist partners such as NGOs and suppliers into the work is a strategic move which will strengthen impact and accountability. 

Morrisons announces a new set of science-based emissions reduction targets

Morrisons has set a new near and long-term science-based emissions reduction targets, approved by the Science Based Targets initiative (SBTi) and aligned with Paris Agreement's 1.5°C pathway. Commitments include reducing Scope 1 and 2 emissions by 80%, Scope 3 energy and industrial emissions by 40%, and Scope 3 Forest, Land and Agriculture emissions by 48.5% by 2035. By 2050, the retailer targets net-zero across its value chain, including 90% reductions in Scope 1, 2 and 3 energy and industrial emissions. Morrisons explains progress will be driven by operational changes, energy-efficiency projects, lower-carbon logistics and collaboration with suppliers.

IGD Supply Chain Analyst, Soline Duriez’s view:

Morrisons’ new set of targets signals a stronger, more accountable sustainability commitment. Setting clear goals helps ensure tangible progress, and working closely with suppliers is key for meaningful, system-wide impact.

Waitrose shoppers embrace a luxurious Christmas

Waitrose has reported a significant surge in demand for luxury home and dining items in the run-up to Christmas, indicating that its customers are 'truly embracing the hosting role' this festive season. The supermarket saw substantial increases across its premium categories, including luxury toiletries, which were up by 48% year-on-year, and washing and bathing products, which grew by 68%. Furthermore, sales of dining décor soared by 54%, with patterned napkins, table linen, and glassware all registering growth of over 30%. This trend towards indulgence was also noted in food, where larger, matured items such as the 1.5kg No.1 Rich Fruit Cake saw a 33% uplift in purchases compared to the previous year.

IGD Insight Manager, Sneha Haria’s view:

Waitrose's strong results show the resilience of its affluent customers and its position as a premium grocer for special occasions. Increased home and décor sales indicate a shift toward higher-end holiday experiences at home. By focusing on quality and sophisticated hosting, Waitrose is protecting itself from discount competitors and achieving higher transaction values during the festive period.

Co-op and EG On The Move grow franchise links

Fast-growing forecourt retailer, EG On The Move has added two more Co-op franchise stores to its growing partnership the national co-operative society, taking the total of EG-operated Co-ops to 10. The locations are at Moston near Cheater and Buchandyke, East Kilbride (Scotland). Both sites feature a full Co-op convenience range for on-the-go and take-home needs, including hot coffee; bakery products; hot food; cold drinks, alongside fresh, chilled and healthy produce as well as meal deals; dairy; freshly prepared sandwiches; pizzas, ready meals; flowers; car care products and, everyday essentials.

IGD Insight Partner, Patrick Mitchell-Fox’s view:

With over 160 fuel forecourts EG On the Move offers one significant opportunity for Co-op to go on expanding its franchise presence in the UK convenience sector. As a business EG’s core capability is as a fuel retailer while it seeks to draw on the expertise of third-party retail partners to build and drive its complementary offer in grocery and foodservice. In addition to Co-op, EG also operates numerous sites in partnership with SPAR for grocery. It has a more extensive portfolio of foodservice partners which can be deployed according to available space and opportunity. The latest addition to its foodservice brands is SpudBros, offering a modern take on the traditional baked potato. The first two EG locations to include SpudBros will be at Wakefield and Blackburn.

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