UK roundup: Tesco annual results, expansion plans, and loyalty upgrades

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 annual results: new strategic ambitions unveiled 

• Waitrose expands with new stores in Heathrow Terminal 2

• Aldi announces new London stores 

• M&S introduces “Sparks wallet” to its loyalty scheme 

• Tesco elevates agentic AI to a core growth lever 

Tesco annual results: new strategic ambitions unveiled 

Tesco used the release of its annual results to unveil new strategic ambitions. An evolution of its existing strategies, the five new ambitions are: Winning in food, Meeting more everyday customer needs, Being the most strategic partner for suppliers, To be connected, personalised and loved by customers, All underpinned by long-term sustainability. Performance wise, excluding VAT and fuel, Tesco’s sales reached £66.6 billion an increase of 4.6%. UK sales increased 4.9% to £49.8 billion, Republic of Ireland sales increased 8.9% to reach £3.2 billion, Booker sales increased 0.6% to £9.0 billion and Central Europe sales increased 7.2% to reach £4.5 billion 

Senior Insight Analyst, Alex Rowberry’s view: with Tesco long expected to deliver another strong set of results, the reveal of new strategic ambitions was the most eye-catching news to emerge at the results announcement. The commitment to being the most strategic partner for suppliers the most significant of all, directly linked to the promise of helping brands grow through the power of shopper insight, built through AI-powered tools and delivered via Tesco Media’s growing capabilities. 

Waitrose expands with new stores in Heathrow Terminal 2  

Waitrose is gearing up to enter airport retail for the first time through a partnership with Lagardère Travel Retail, with Waitrose products set to be stocked in four RELAY stores at Heathrow Terminal 2. This is a new channel for Waitrose set to open in May 2026. Waitrose products will be stocked across three airside stores and one landside store. All four are planned to be open by the end of the year. The stores will offer a tailored food-to-go range including No.1 premium private label items. Terminal 2 handles around 20 million passengers per year, giving Waitrose access to an incredibly high traffic area and a new shopper base. Lagardère Travel Retail are hoping the partnership will strengthen RELAY’s food-to-go proposition.  

Analyst, Seth Russell’s view: Waitrose’s expansion into the airport retail market signals that the retailer is acting on plans to diversify its portfolio to reach a wider base of shoppers, targeting a high traffic airport terminal is a smart choice as it can test whether the investment is a successful profit driver with the potential to be expanded into further, allowing the retailer to establish a presence outside of its core supermarket estate and online proposition. The partnership allows both Waitrose to get its brand into the public eye more often while also providing RELAY with improve quality and variety in its airport food offering. With the initial store opening in May, it will be peak time for those travelling on summer holidays, therefore putting the Waitrose brand in front of a wider shopper base, and debuting a potentially fruitful channel for the retailer.  

Aldi announces new London stores 

The discounter will invest £40m to open eight new stores in and around the capital, bringing stores to Hanworth (Twickenham Road), Willesden (High Road), Watford, Marble Arch, Hoxton, Orpington West, Epsom and Stepney Green. This is part of Aldi’s £370m investment in new store openings this year, aimed at bringing Aldi prices to even more households. 

Senior Insight Analyst, Michela Pearson’s view: London has long been in Aldi’s sights for expansion, and it has slowly but surely been solidifying its footprint in the city. These new stores will help Aldi get closer to its long-term goal of having 1,500 stores in the UK. Having also recently invest £122m in price cuts, and pledged an additional £300m for store upgrades, Aldi is demonstrating how committed it is to continuously improving the shopping experience and bringing value to UK families during uncertain financial times. 

M&S introduces “Sparks wallet” to its loyalty scheme   

M&S have announced the introduction of a new digital “Sparks wallet” designed to deliver personalised rewards to shoppers. M&S state it is using a new suite of AI and machine learning, with advanced generative AI models on the way, providing more personalised offers and rewards. Like other retailers’ loyalty apps with personalisation, the more you use the Sparks wallet, the better the personalisation becomes. Rewards that have been announced vary between different M&S departments. There will also be rewards for specific bundles of products, and for shoppers discovering new parts of M&S they don’t normally shop in. The app will function by showing users what rewards are available to them each time they open the app, as well as this there will be an included section of the app for M&S’ first loyalty partnership. The partnership is with Virgin Red, Virgin’s Rewards Club, providing an alternative way for users to boost their Sparks wallet, with the ability to earn rewards by purchasing Virgin products and experiences.  

Analyst, Seth Russell’s view: Two weeks ago, we saw M&S scrap its Sparks Delivery Pass subscription service. This move suggested that the retailer was taking a closer look at its loyalty offering and may be looking to shake things up, and here is the shift. The new Sparks Wallet leans into more recent loyalty trends of personalisation of offers and experiences. The new section of the app will provide shoppers with offers unique to them, making it a big driver for traffic into stores while simultaneously providing shoppers with an improved experience. The team at M&S have clearly seen the demand for an improved loyalty offering, cut off the fat (Sparks Delivery Pass), and produced a shiny new product with integrated AI to minimise the cost of personalisation features. This is a strong step forward for M&S’ growth plan, playing into both its expansion and renewal plans across the UK and into the strategy being put in place to gain more family shoppers.  

Tesco elevates agentic AI to a core growth lever 

Tesco has entered a strategic AI partnership with Adobe aimed at better anticipating shopper needs and converting loyalty engagement into more relevant, personalised interactions across the shopping journey. To accelerate the introduction of AI-driven personalisation at scale, the partnership will see Tesco combine its in-house data expertise with Adobe’s agentic AI and Adobe Firefly Foundry tools to create the new Tesco x Adobe Innovation Lab. 

Senior Insight Analyst, Alex Rowberry’s view: the partnership with Adobe marks a step-change towards Tesco’s ambition of providing shoppers the truly personalised shopping experience the retailer has been highlighting over the past 12 months. It will be a key element of achieving the retailer’s new strategic ambitions of ‘Being the most strategic partner for suppliers’ and ‘To be connected, personalised and loved by customers’.  

What to read next: Tesco resets strategic direction for future growth 

 

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