Everything you need to know from the UK grocery retail market this week.
In this instalment, our UK analysts offer their take on some of the market’s latest developments and initiatives. Here’s what you need to know about:
Sainsbury’s agrees deal to sell Argos
Morrisons Daily expands Snappy Shopper partnership
Morrisons reports £926m pre-tax loss despite sales growth
Waitrose extending 24/7 delivery and rolling out heatwave ready fridges
Aldi announces new round of price cuts
The Range invests in expansion
Sainsbury’s agrees deal to sell Argos
Sainsbury’s has agreed to sell Argos to Swift Partners for at least £120 million. While ownership of Argos will transfer, the retailer will remain embedded in Sainsbury’s ecosystem through in-store concessions, collection points, Nectar, and retail media partnerships. The transaction is expected to complete in February 2027, with the two businesses fully separated by February 2029. Swift Partners is a newly formed investment vehicle specifically formed to acquire Argos. It is led by former Co-op CEO Richard Pennycook, ex-Sainsbury’s CFO Trevor Strain, Ocado Technology founder Matt Truman and private equity firm True Capital.
Senior Insight Analyst, Alex Rowberry’s view: Sainsbury’s decision to sell Argos has been widely anticipated given the stronger performance of its core grocery business in recent years. It marks a key step in Sainsbury’s ongoing simplification strategy as the retailer doubles down on the areas where it sees the greatest long-term growth potential: food, convenience, and loyalty. Crucially, the deal allows Sainsbury’s to retain many of the customer and ecosystem benefits of Argos, while giving the brand dedicated ownership to pursue investment and growth opportunities independently.
Morrisons Daily expands Snappy Shopper partnership
Morrisons and quick commerce operator Snappy Shopper are expanding their partnership in Morrisons Daily convenience stores. Hundreds of stores are set to join the quick commerce platform by the close of 2026. The collaboration began in 2025 with a five-store trial, which delivered an average basket value of £31, highlighting the commercial potential for both businesses. Following the successful pilot, Morrisons confirmed plans to add 300 stores across England and Wales, with 100 stores due to join by the end of the year and 200 more in early 2027.
Insight Analyst, Linda Haden’s view: Strategically, the move turns Morrisons Daily stores into micro-fulfilment hubs, enabling the retailer to capture more immediate shopping missions while enhancing its online reach with minimal capital outlay. With rivals accelerating investment in rapid delivery, the partnership represents a deliberate effort to defend share on a local level. The extension comes as Morrisons seeks to strengthen its position following its slide to sixth place in terms of market share after being overtaken by Lidl.
Morrisons reports £926m pre-tax loss despite sales growth
Accounts for Morrisons holding company, Market Topco, reveal the retailer saw a a pre-tax loss of £926 million for its financial year to 26 October 2025. The loss is despite revenue growing from £15.4 billion to £15.8 billion. Morrisons said profitability was impacted by around £200 million of additional costs linked to higher National Insurance contributions and wage increases, as well as disruption caused by a cyberattack that affected its supply chain ahead of Christmas 2024. Underlying EBITDA remained flat at £835 million, while one-off costs increased by £297 million, with Morrisons also citing impairment charges related to its acquired McColl's business. Despite the headline loss, the retailer continued to reduce debt, lowering total borrowings to £3.2 billion, down 46% since its 2021 acquisition by Clayton, Dubilier & Rice.
Senior Insight Analyst, Alex Rowberry’s view: While higher employment costs, cyber disruption and impairment charges all contributed to the result, the scale of Morrisons' £926m pre-tax loss is also a reminder of the financial burden that servicing its debt has placed on the business. These pressures contributed to Morrisons losing its position as the UK's fourth-largest grocer to Lidl during the year. Recent trading suggests sales momentum is improving, but with inflation expected to accelerate again towards year-end, Morrisons may once more find itself under pressure to balance profitability with maintaining competitive pricing against both the discounters and larger full-line rivals.
Waitrose extending 24/7 delivery and rolling out heatwave ready fridges
For the World Cup 2026, Waitrose extended its quick commerce delivery hours to accommodate the late timings of fixtures. This was such a success the retailer has decided to continue the extended hours in 35 stores across the UK. Waitrose saw that even after games shoppers were still ordering, driving the change to extend operating hours permanently. As well as this, the retailer is responding to current extreme weather conditions in the UK, by preparing to introduce refrigeration systems designed to operate in temperatures up to 48C.
Analyst, Seth Russell‘s view: By making the extended delivery hours permanent in areas of high demand, Waitrose is improving its positioning in the quick commerce space, making it more visible and available particularly at times when rivals are closed. Flexibility in this area allows it to reach more people more often and drive growth for the business. Installing fridges that can withstand 48C is unfortunately a necessary change, as many retailers saw fridges and freezers struggling during the recent heatwaves across the UK. The ability to keep products cool during these heatwaves will increase Waitrose’s appeal to shoppers trying to find a way to cool down. This follows other retailers making refrigeration upgrades such as M&S and Sainsbury's to prepare for a hotter future.
Aldi announces new round of price cuts
Aldi is investing £100 million in lowering the price of everyday essentials including fresh, frozen and cupboard staples. Aldi has invested £300 million in prices this year alone, lowering the price of over 1,000 products as the battle for value continues. It is also focusing on expanding its estate to bring its low prices to more shoppers around the country.
Senior Insight Analyst, Michela Pearson’s view: Leading on value continues to be Aldi’s key priority; an additional investment in keeping prices low when shoppers continue to feel the pinch is unsurprising. Aldi prides itself on achieving the cheapest shopping basket despite the lack of a loyalty scheme (with a recent trial ending in Scotland), although the lack of personalisation and engagement may be a hinderance in the long run.
The Range invests in expansion
The Range and Wilko owner CDS Superstores has secured financing for a £190 million investment programme to support further growth. The financing, which is more than double the size of its previous arrangement, will provide for new store openings and the conversion of former Homebase sites. The retailer also plans to invest in its digital capabilities, technology infrastructure and supply chain, with the new facility providing greater financial flexibility to support its multi-brand expansion strategy.
Senior Insight Analyst, Michela Pearson’s view: CDS Superstores has been growing strongly over the last few years, strengthened by the acquisitions of Wilko and Homebase. The new financing secured is larger than previous rounds and will allow the business to continue its strong growth course. Suppliers, especially in non-food categories, should explore opportunities with this retailer for medium and long-term opportunities.
Read all about the UK’s variety discount channel in our upcoming report, The new era of UK variety discount.
What to read next: Why Sainsbury’s is selling Argos now
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