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:

• Asda reports further sales decline in second quarter results

• Tesco to reward farmers meeting environmental and sustainability targets

• Lidl invests £435m in warehouses to support further growth

• Waitrose’s latest technology developments

• Iceland rebrands loyalty scheme

• Poundland introduces new pricing structure

• Boots spins off from Walgreens Boots Alliance to form The Boots Group

Asda reports further sales decline in second quarter results

Asda reported sales declined by 0.2% in its second quarter results compared to the same period in 2024. Like-for-like sales also declined by 0.2%. Sales in Asda Express convenience stores were in 8.6% like-for-like growth, and sales of its George fashion range were in 2.5% like-for-like growth.

IGD Senior Insight Analyst, Alex Rowberry’s view:

Asda has taken a positive view on its latest sales performance, which is a significant improvement from the 3.1% decline in like-for-like sales reported in its first quarter. The retailer faces softer annual comparisons in the second half of 2025, raising the possibility of sales returning to growth before the end of the year.

Tesco to reward farmers meeting environmental and sustainability targets

From September 2025, 260 UK dairy farmers who supply Tesco’s milk through Müller UK will earn an additional 2.5p per litre of milk if they meet key targets on emissions reduction, animal welfare, feed conversion efficiency and genetic improvements. The plan could help farmers earn an additional £9.5 million in the first year. Similar incentives will be offered to farmers in Tesco’s lamb, pig, and beef groups. These will be backed by a baseline assessment for soil, water, and biodiversity improvements.

IGD Supply Chain Analyst, Soline Duriez’s view:

Tesco’s new farmer incentives support the retailer’s ambition to reduce their Scope 3 emissions and target net-zero. Tesco’s commitment to supporting dairy, and soon to include livestock farmers, will encourage the industry to adopt more environmentally friendly agricultural practices. Asda recently launched their own sustainability-linked finance scheme where preferential terms will be awarded to suppliers who perform strongly in their sustainability practices.

Lidl invests £435m in warehouses to support further growth

Lidl invested £285 million to expand its London Belvedere warehouse, tripling capacity. The site is now 800,000 sq ft, 167% larger than when it opened in 2003. Once fully operational, it will serve 120 stores across London. In addition, Lidl has also begun construction of a new £150 million site in Leeds with a capacity of 580,000 sq ft.

IGD Supply Chain Analyst, Soline Duriez’s view:

Lidl’s latest investments reflect the continued growth of the discount retail segment in the UK and is driven by the retailer’s key milestone to have 1000 stores. However, this trend isn’t unique to discounters, as we have observed similar expansion among Tesco, M&S, and Waitrose, reflecting an overall trend for bigger and modernised warehouses.

Waitrose’s latest technology developments

Waitrose is trialling new technology at its Bracknell store, with the introduction of hands free scanners equipped with an AI computer vision system. The devices, a first for a UK supermarket, use a back-facing camera to identify products placed in the trolley, providing a real-time tally and enabling a frictionless shopping experience

This move comes as the retailer also enhances its My Waitrose app with an "in-store mode," using location data to offer features like store-specific shopping lists and easier access to ScanPayGo. Additionally, the supermarket has launched a "Little Treats" trial, offering loyalty members up to three free or money-off rewards each month once certain spending thresholds are met, which are tracked via the app.

IGD Insight Manager, Sneha Haria’s view:

These strategic innovations by Waitrose signal a clear intent to leverage technology to deepen customer loyalty and streamline the in-store journey using technology. Waitrose aims to retain its premium customers and attract new shoppers in a competitive market where tech-driven convenience and personalisation are key differentiators.

Iceland rebrands loyalty scheme

Iceland has changed the name of its loyalty scheme. The newly rebranded Iceland Bonus Club (previously Iceland Bonus Card) offers shoppers bigger monetary discounts, and better rewards. The scheme allows shoppers to preload money onto their loyalty account, which they can use for purchases both in-store and online. For every £20 spent, shoppers get £1 back. Members will also have access to free home delivery and to the Tuesday over-60s 10% discount.

IGD Insight Analyst, Michela Pearson’s view:

Retailers are continuously investing in their loyalty schemes, and this new initiative from Iceland will likely resonate with shoppers. In particular, the tangible rewards from third parties, such as chances to win holidays and memberships, will be a key driver of interest in the scheme.

Poundland introduces new pricing structure

Following the approval of its restructuring plan, Poundland is returning to its pricing roots and pricing products at £1, £2, and £3. The rollout will take place gradually over the course of September, following a trial in the West Midlands.  

IGD Insight Analyst, Michela Pearson’s view:

Poundland needs to return to a clear pricing structure to regain shopper’s trust. This is a move in the right direction, which, alongside a streamlined offering in store, may help the retailer get back on its feet. The variety discounter’s new playbook examines this and other priorities for the top players in this channel.

Boots spins off from Walgreens Boots Alliance to form The Boots Group

The move follows a private equity takeover, positioning Boots to operate independently as The Boots Group. The new business will include Boots UK and Ireland, Boots opticians, No7 Beauty company, and pharmacy operations in Thailand, Mexico and Germany. Ornella Barra, formerly COO of Walgreens Boots Alliance’s international division, will lead the new group.

IGD Insight Analyst, Stephanie Leung's view:

Boots’ move towards greater independence could prompt UK health and beauty retailers to re-evaluate their own strategic models, particularly those balancing global scale with local relevance. As Boots sharpens its focus on category innovation and elevating the in-store experience, suppliers may need to adapt to evolving sourcing priorities and new ways of collaborating.