UK round-up: retailer price rises and industry news

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 increases price of meal deals

• Lidl to introduce ‘Live Well’ label

• M&S invests £340m in new food distribution centre

• Co-op unveils sustainability showcase store

• Poundland restructuring plan approved

Tesco increases price of meal deals

Tesco has increased the price of its meal deals. Prices for standard meal deals have increased from £3.60 to £3.85 for Clubcard holders, and from £4.00 to £4.25 for non-Clubcard holders. Premium meal deal prices have increased by 50p, from £5.00 to £5.50 for Clubcard holders, and from £5.50 to £6.00 for non-Clubcard holders.

Senior Insight Analyst, Alex Rowberry’s view:  Tesco’s price hike follows Sainsbury’s increasing the cost of its meal deals in June and comes as inflation in the grocery market continues to increase. IGD expects food inflation will peak at 5.1% this year before gradually reducing in 2026.

Lidl to introduce ‘Live Well’ label

As part of the discounter's alignment with the planetary health diet, it is introducing a new logo to private label products that meet specific nutritional and environmental requirements. The move comes after research showed that shoppers consider a healthy diet important but need guidance when choosing healthy products.

Senior Insight Analyst, Dan Butler’s, view: Lidl is being very transparent in its approach, publishing the specific requirements for products to receive the ‘Live Well’ tag. This will support the shopper journey, allowing quicker healthier and environmentally conscious choices.

M&S invests £340m in new food distribution centre

M&S has announced a £340m investment in a new state-of-the-art food distribution centre, the largest supply chain investment in its history. This 1.3m sq ft National Distribution Centre will be located at the Daventry International Rail Freight Terminal and is scheduled to open in 2029. The facility will use advanced automation, including automated pallet cranes and hands-free picking, to improve efficiency, availability, and reduce cost-to-serve. Sustainability will also be central to the project, with the site expected to achieve a BREEAM Outstanding rating, placing it among the top 1% of sustainable buildings worldwide.

Insight Manager, Sneha Haria’s view: This investment highlights M&S’s strategic commitment to modernising its supply chain to underpin food sector growth. By leveraging advanced automation and centralising distribution, the company aims to enhance operational efficiency, improve product availability, and lower long-term costs. This move solidifies its proposition as a serious contender for the weekly shop.

Co-op unveils sustainability showcase store

Co-op has unveiled its new ‘sustainability showcase’ store, in Soham, East Cambridgeshire, following an eight week, £1m refresh to the site. The store now features motion-activated chiller lights, roof-top solar panels, digital screens displaying real-time energy consumption, and measures to help local biodiversity. The store will act as a test and learn site for the retailer.

Senior Insight Analyst, Alex Rowberry’s view:  Operating sustainably is an important aspect of Co-op’s approach to retailing. The test and learn approach of the Soham store will help the retailer understand which aspects bring the most benefit to its wider store estate, with these elements likely to be rolled out in future store renewals and new store openings.

Poundland restructuring plan approved

Poundland has secured high court approval for its restructuring plans, paving the way for a business turnaround. As part of the strategy, 68 stores will close this year, while the company also streamlines its distribution network and support functions.

Michela Pearson, Insight Analyst’s view: the approval has saved Poundland from going into administration and will now see investment into its operations to improve its outlook. I expect the assortment will be reviewed to consolidate its SKU count and investment into pricing and promotions to reinforce its value credentials with shoppers.

See more on the outlook for UK variety discounters in our latest report, the variety discounters' new playbook.

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