UK roundup: developments to retailer strategies

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 pulls out of talks to sell Argos to JD.com

• Waitrose sees record half-year sales

• Morrisons reveals new top tier private label range

• M&S appoints AF Blakemore as primary wholesale partner for premium brands

• Ocado Retail opens new spoke to scale delivery operations

• Aldi accelerates UK investment and expansion

• Ocado Retail maintains position as UK’s fastest growing retailer

Sainsbury’s pulls out of talks to sell Argos to JD.com

Sainsbury’s has reaffirmed its commitment to Argos after it was revealed the retailer had been in talks with JD.com to sell the general merchandise business. Sainsbury's pulled out of the talks after JD.com said it would “only be prepared to engage on a materially revised set of terms and commitments”, something Sainsbury’s decided was not in the best interests of its shareholders, colleagues and broader stakeholders.

Senior Insight Analyst, Alex Rowberry‘s view: Sainsbury’s change of heart on Argos came less than 24 hours after the news broke it was in talks to sell the business. Although Argos struggled for growth for much of 2024, selling the business would have been a surprise, coming 18 months after it was made one of Sainsbury’s key strategic pillars, and a positive sales performance in first quarter results. It hints at the pressure to grow profits many retailers currently face at a time when inflation is driving market growth, and legislative costs are increasing.

Waitrose sees record half-year sales

Waitrose achieved record half-year sales, surpassing £4 bn for the first time. Sales were up 6% to £4.1 bn, with volumes rising by 3%. The retailer also saw a 9% increase in customer numbers compared to two years ago. This strong performance was driven by investment in food quality, stores, and technology, with the supermarket winning The Grocer Gold Award for Customer Service for the fourth year in a row.

Insight Manager, Sneha Haria‘s view: despite challenging economic times, this premium grocer has successfully grown its customer base, alongside volume growth. Waitrose's focus on customer service and product innovation, including new products and refurbishments, has created a solid foundation, positioning them well for the crucial second half of the financial year. Read more about the Waitrose store refurbishments in our new report “The Waitrose upgrade: building for tomorrow” out next week.

Morrisons reveals new top tier private label range

Morrisons has launched a new premium private label range ‘The Best Signature Collection’ which will sit above its main premium private label range, ‘The Best’. The new range is launching with 400 products, with Morrisons describing it as the biggest fresh food range reset for a decade. Products will feature in ready meals, desserts, meat, and festive items with a distinctive gold packaging.

Senior Insight Analyst, Alex Rowberry‘s view: the move by Morrisons is reminiscent of Asda’s ‘Exceptional’ range of premium plus private label products launched last year. It comes as private label products are seeing sustained double-digit growth in a market that is primarily being driven by inflation. The growth being driven by shoppers trading down from brands as they seek to manage household budgets.

M&S appoints AF Blakemore as primary wholesale partner for premium brands

M&S announced last week a major change to its supply chain for branded products, switching to AF Blakemore. The move ends a long-standing supply agreement with Booker. The change will be highly beneficial for M&S, introducing a full 7-day delivery schedule for ambient and chilled goods across its store estate. Improved freshness and quality of products remain a key focus for the retailer. The change to the West Midlands wholesaler means 20% of M&S’s business is supplied by British, Family-owned firms.

Head of Supply Chain Insights, James Rothwell's view: the move will bring great rewards to M&S' supply chain with improved availability and potentially reduced wastage in expirations from the increased number of delivery opportunities. The transition fits well into Alex Freudmann's plans to modernise the retailer into a full shopping list destination. Given the growth of M&S and its investment in their distribution network over the next few years, there is more capacity to go direct to branded suppliers over the long-term.

Ocado Retail opens new spoke to scale delivery operations

Ocado Retail has opened a new regional distribution spoke in Nottingham to support growing demand and expand its infrastructure. The site is intended to increase operational efficiency and improve customer service through closer proximity to consumers. Once fully functional, the site is expected to create over 400 new jobs. Ocado Retail is continually seeking similar distribution properties across the UK to boost its infrastructure portfolio and support its growth ambitions.

Supply Chain Analyst, Soline Duriez’s view: this move signals how central proximity logistics are to meeting rising shopper expectations in online grocery. By building urban spokes, Ocado is reducing last-mile inefficiencies, improving order fulfilment speed, and supporting its growth trajectory.

Aldi UK&I announces 2024 results and accelerates investment

Aldi has announced it will be investing £1.6bn in the UK over the next two years, opening 80 additional stores. The news comes after the German discounter stated that it profits dropped over 20% last year, due to continued investment in price, infrastructure, and staff pay. Overall sales for the UK and Ireland grew only 1.1% to £18.1 bn in 2024. CEO Giles Hurley has also warned that the Autumn Budget may further negatively affect consumer spending and confidence.

Insight Analyst, Michela Pearson’s view: Aldi is continuing to expand aggressively in the UK, alongside highlighting its commitment to “never be beaten on pay”. Despite a drop in profits and muted like-for-like sales in 2024, 2025 is looking more promising for the discounter, as shoppers continue to search for value. Shopper confidence has dropped over the summer, with factors such as rising energy bills and food price inflation contributing to the fall. Bringing more stores to area like central London will likely see Aldi’s sales grow further over the next few years.

Ocado Retail maintains position as UK’s fastest growing retailer

The latest grocery market performance data from Numerator by Worldpanel, covering the 12 weeks to 7 September 2025, has Ocado Retail leading the market with growth of 11.9%. Lidl (11.0%), Tesco (7.7%), M&S (5.9%) and Sainsbury’s (5.4%) all outperformed the total market which grew at 4.7%. Iceland (4.7%) and Aldi (4.7%) performed inline with the market, while Waitrose (4.3%) and Morrisons (1.4%) underperformed. Co-op (-2.0%) and Asda (-2.7%) saw sales decline.

Senior Insight Analyst, Alex Rowberry‘s view: the latest figures from Numerator by Worldpanel tell a familiar story, with Ocado Retail and Lidl noticeably growing ahead of the wider grocery market. The result is both retailers see year-on-year market share gains, Ocado growing from 1.8% to 1.9% and Lidl growing from 7.8% to 8.2%. Tesco is the biggest winner, with its share growing from 27.6% to 28.4%. Asda and Co-op’s decline continues, although Asda’s recent second quarter results paint a more positive picture for the retailer.  

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