UK roundup: latest retailer results

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 2025/26 sales driven by grocery, UK generational tobacco ban becomes law, Dhamecha opens depot 14, and M&S adds to low-emission fleet

• Sainsbury’s results: grocery sales the highlight of 2025/26 performance

• Generational tobacco ban to become law in UK

• Dhamecha goes west for depot number 14

• M&S expands its low-emission truck fleet

Sainsbury’s results: grocery sales the highlight of 2025/26 performance

Sainsbury's 2025/26 financial results covering the 52 weeks to 28 February 2026 show the retailer’s total retail sales grew 4.3% (exc. fuel). The retailer’s grocery business grew 5.2%, Sainsbury’s general merchandise & clothing grew 1.3%, and Argos sales grew 0.7%. Argos’ performance reflected an increase in volumes undermined by a fall in the average selling price of goods. Sainsbury’s online sales grew 13.0% boosted by quick commerce sales growing 69% to more than £700 million.

Senior Insight Analyst, Alex Rowberry’s view: Sainsbury’s results were once again a mixed bag. Grocery sales remain the strongest area of the retailer’s business, while Argos’ performance will once again raises questions on whether the retailer will seek to sell off the general merchandise specialist, possibly once its current three-year ‘Next Level Sainsbury’s’ strategy ends in February 2027.

Generational tobacco ban to become law in UK

The proposed Tobacco and Vapes Bill which stipulates that no one born after 2008 will be allowed to legally purchase tobacco products has now passed through both houses of the UK parliament and will be signed into law. Following the formality of royal assent, it is expected that legislation will come into force from 1 January 2027. As well as seeking to establish wholly smoke-free generations amongst all people who will be 18 or under at that date, the legislation all adds new restrictions to the locations where people can vape going forward. The new law means that from 2027 some 22% of the UK population will never legally be allowed to purchase tobacco a proportion estimated to increase by about 0.8 percentage points each year thereafter. This means that it will take almost 50 years before half the UK population is affected.

Insight Partner, Patrick Mitchell-Fox’s view: legitimate tobacco sales are already declining sharply in the UK, impacted by a combination of falling consumption and a highly active illicit trade. Clearly the imposition of the generational tobacco ban will further intensify the pressure on the on the market and it seems likely that there will come a tipping point at which legitimate operators seek to exit the category at some time in the next decade, or even sooner. Meanwhile it will be a question of cracking down on illegal supply that will determine whether future generations really do become smoke-free.

Dhamecha goes west for depot number 14

Quick-growing cash & carry wholesaler, Dhamecha has announced that it will open its fourteenth trading site in Bristol later this year, bringing its competitive offer to the independent retailers of south-west England for the first time.  Having established itself as a key player in the highly competitive wholesale market within the M25, Dhamecha began to expand beyond the capital in 2015, opening its first Midlands depot in Leicester. In the following years further sites were added in Birmingham, Nottingham, West Bromwich and Liverpool. In its latest reported year to March 2025, Dhamecha recorded sales of £1,4 billion.

Insight Partner, Patrick Mitchell-Fox’s view: the addition of its Bristol depot will confirm Dhamecha as the third largest wholesaler to the independent retail sector by sales, after Booker and Bestway, having overtaken Co-op Wholesale (Nisa) in 2024.  In a market where other operators have struggled for growth in recent years as traditional sales categories such as tobacco have shrunk, Dhamecha has successfully expanded its trading footprint with a dedicated focus on cash & carry service. In contrast, other traditional cash & carry players have moved towards a mixed model by increasingly offering delivery service. The advantage to Dhamecha against this background is the ability to control operating costs more readily especially when fuel costs are elevated. In turn this can be leveraged to sustain its strong value proposition.

M&S expands its low-emission truck fleet 

M&S plans to further reduce transport emissions by expanding its fleet of biomethane-powered trucks. Bio-CNG, a renewable fuel made from waste materials such as food waste and agricultural by-products, produces up to 85% less CO2 emissions than diesel vehicles. M&S already operates more than 210 bio-CNG trucks and aims to grow this to over 300 by March 2027, as part of its goal to become net-zero across its value chain by 2040. To support the rollout, the retailer has signed a long-term agreement with CNG fuels, whose national network of public-access stations is expanding rapidly.

Supply Chain Analyst, Soline Duriez’ view: M&S’s investment in biomethane is a practical way to cut transport emissions and reduce reliance on diesel. Turning waste into fuel adds value across the chain, while a larger biomethane fleet improves reliance for the retailer. As pressure to decarbonise grows, these near-term scalable solutions will matter commercially. However, biomethane won’t meet all long-term freight demand, so this shift should be seen as strong interim steps alongside future moves towards alternative zero-emission technologies.

What to read next: Sainsbury's signals priorities for the year ahead

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