UK roundup: latest retailer investments in technology and price-cuts

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: Tesco’s planned roll-out of ESLs to all stores, M&S’ latest round of price-cuts, Poundstretcher’s proposed re-structuring plan and how Sigma has stepped away from the deal to acquire Boots.

• Tesco strengthens pricing agility, accelerating shift to digital store platforms

• M&S invests in price-cuts across everyday essentials

• Poundstretcher restructuring plan approved

• Sigma drops Boots acquisition plan

Tesco strengthens pricing agility, accelerating shift to digital store platforms 

Tesco has confirmed electronic shelf labels (ESLs) will be installed across its supermarket and convenience estate over the next two years. First revealed in Retail Week, Tesco has entered a multi-year partnership with Chinese technology firm Hanshow to instal ESLs in around 3,000 stores, following trials in 2025. Tesco said ESLs will support its sustainability agenda by replacing paper labels and was an important step in modernising its store estate. The move follows Morrisons announcement last October to install 10.8 million VusionGroup ESLs across its 497 supermarkets.

Senior Insight Analyst, Alex Rowberry’s view:

Tesco is relatively late in the adoption of ESLs, with Aldi, Lidl, Asda, Morrisons and Waitrose all operating or installing the technology. However, given the scale of the rollout, likely to be in region of 55 to 65 million ESLs, it is understandable Tesco wanted to take the time to get the decision right. While sustainability is cited as a driver, the more material benefit is labour cost reduction, with Tesco facing around £235 million in additional annual National Insurance costs and sustained wage investment exceeding £1 billion over the past five years. Beyond cost, ESLs position Tesco to improve pricing agility, strengthen execution, and unlock future retail media and in-store data opportunities.

M&S invest in price-cuts across everyday essentials

M&S has invested £30m into slashing prices across everyday essentials in fresh, store cupboard, and freezer products. 65 products in total have been reduced in price, with the retailer insisting the price cut does not signify a reduction in quality, but instead a greater value offering across high protein items to help provide more options for healthy eating, particularly in the consumption of Omega 3 fatty acids. This investment also brings its Remarksable Value range to a total of 145 products. This investment follows a £2.1bn investment into sourcing British lamb and beef in April.

Analyst, Seth Russell’s view:

This investment to slash the prices on products typically associated with a higher price (salmon fillets, beef-mince, free-range eggs), particularly at M&S, shows the commitment M&S has to not only drive more weekly/family shoppers into stores to become a shopping list grocer but also its commitment to raising the health profile of its shoppers. With its health-centric ranges in place and packaging highlighting its own Eat Well seal of approval M&S has positioned itself as being a healthy place to shop. As well, the continuous and rapid expansion of its Remarksable Value range highlights the retailers main Food business target of doubling its Food sales by 2029 using value ranges, price cuts, and the expansion of its store footprint across the UK. The ambition of reaching family shoppers can be seen through the types of products these announced price cuts have encapsulated; cooking staples suitable for family shopping missions.

Poundstretcher restructuring plan approved

The variety discounter has been struggling for the past few years, and was acquired by investment company Fortress in 2024. It has recently asked for rent cuts across the ~300 store network and will aim to further reduce its overheads without closing stores or redundancies. With creditor backing, the restructuring plan will see it improve performance alongside efforts to boost in-store experience and perfect the assortment.

Senior Insight Analyst, Michela Pearson’s view:

The variety discount channel continues to experience difficulties, and Poundstretcher has been among those struggling the most. With stores and staff a core driver of cost, it will be interesting to see where it will make cuts instead, and whether it will be a sustainable strategy in the long run.

Poundstretcher’s annual results for FY25 will be published by the end of the month – keep an eye out for our coverage.

Sigma drops Boots acquisition plan

Sigma Healthcare, the owner of Chemist Warehouse, has withdrawn from discussions to acquire Boots just days after confirming its interest in this UK pharmacy chain. The company said that the acquisition did not align with its current strategic and capital priorities. While abandoning the bid, Sigma will continue with its UK expansion through Chemist Warehouse and a smaller partnership with Greenlight Healthcare. For Boots, this likely means continuing preparations for either a future sale or its planned London IPO.

Insight Analyst, Ziwei Huang ‘s view:

Sigma’s withdrawal suggests that large-scale international expansion must still be balanced against capital discipline and strategic fit. For Boots, the exit reduces competitive tension in the sale process, potentially strengthening the case for an IPO or alternative buyers as uncertainty around its ownership continues.