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:  

• Waitrose use AI to optimise delivery routes 

• Major retailers review mackerel sourcing after Waitrose suspends sourcing 

• Tesco Media appoints former Walmart Connect Chief Operating Officer 

• Aldi improves support for UK farmers and communities 

Waitrose use AI to optimise delivery routes   

Waitrose has partnered with AI company Satalia to enhance its delivery services. This involves using the AI to predict the fastest travel routes both to cut down on delivery times and minimise fuel consumption, lowering cost of delivery services for Waitrose. The AI platform is designed to offer real-time information on traffic, weather, vehicle capability, and delivery time windows. This will not only improve the process for delivery drivers but also improve the speed of delivery for shoppers. It will also decrease the carbon footprint of the delivery fleet. The solution has rolled out across 170 stores and two fulfilment centres, reportedly supporting around 160,000 home deliveries each week with a fleet of 1,400 vans. This comes alongside other retailers moving towards AI-driven optimisation of home delivery to improve the economics of grocery delivery, attempting to make it a less complex and costly operation in the grocery supply chain.  

Analyst, Seth Russell’s view: The benefits of using AI optimisation in grocery delivery laid out in the article can contribute to a wider improvement in efficiencies in grocery delivery for Waitrose, who, like other retailers who offer grocery delivery, are looking to widen the slim margins found in the channel. These margins are slim due to overwhelming operational, labour, and transport costs when it comes to delivery, alongside product margins being relatively small themselves. While AI route optimisation may seem like a small fix to a wider issue, it signals a shift towards improving operations and cutting costs to drive growth through grocery delivery and could prove to be a cog in the machine that turns grocery delivery into a profitable enterprise.  

Major retailers review mackerel sourcing after Waitrose suspends sourcing 

Last week Waitrose announced its decision to suspend sourcing and selling of mackerel due to mounting concerns put forward by scientific bodies that mackerel is being overfished in the North-east Atlantic and has reached unsustainable stock levels. Environmental groups praised the move, but Waitrose were under fire from fishing groups, with the Scottish government calling into question the standards of other fish’s sourcing. This week, M&S have confirned its decision to also suspend sourcing of mackerel for the time being, following the Fisheries Improvement Project guidance, starting in April. Elsewhere, Sainsbury’s and Morrisons have confirmed that they will be reviewing their sourcing and supplies of mackerel, with Sainsbury’s stating it will diversify its stock away from mackerel to allow the stock to recover. Morrisons said it will move ll its tinned mackerel to Chilean jack mackerel, sourced from a Marine Stewardship Council certified fishery, as well as this, Morrisons said it will continue to stock North-east Atlantic mackerel but only if it’s not classified as ‘avoid’ by the Good Fish Guide.  

Analyst, Seth Russell‘s view: Waitrose’s strong stance on responsible fishing has put a spotlight on the importance of sustainable sourcing, leading other retailers to follow suit. It is this kind of trailblazing from Waitrose and transparency from environmental organisations that allows major retailers to call into question the sustainability of suppliers sourcing methods. Multiple retailers suspending sourcing from unsustainable suppliers can instigate a real change in fishing methods shifting towards more sustainable practices to protect the future of mackerel stock. Our recent article discusses the AI journey to transparency in the seafood industry. 

Tesco Media appoints former Walmart Connect Chief Operating Officer  

Tesco’s retail media business, Tesco Media, has appointed Lauren Bolles as its newly created Chief Operations Officer. Bolles joins from Walmart Connect, the US retailer’s retail media advertising platform, where she served as Chief Operating Officer for the past four years. Bolles will be tasked with delivering Tesco Media’s goals of moving faster, greater operational efficiency and delivering work with greater impact for its customers and partners. 

Senior Insight Analyst, Alex Rowberry‘s view: the appointment of Bolles, a key figure in the development of Walmart Connect which generated revenue of $6.4 billion in its last financial year, is a significant development in the UK’s retail media landscape. At a time when private label is growing its share of the market, the appointment signals Tesco’s ambition to brands that it is the retailer most capable of delivering growth, forcing rivals to demonstrate how their own retail media propositions will remain competitive. 

Aldi improves support for UK farmers and communities  

The discounter will be adding over 1,000 new jobs to the UK economy through its expansion plans and is committed to being the nation’s highest-paying supermarket, with highly competitive hourly rates being introduced from April 1^st. It is also further supporting the local economy by expanding its plans to offer long-term agreements to its fresh suppliers. The plan is for over 50% of its produce to come through long-term contracts by 2027, helping suppliers unlock investment opportunity to build more resilient and sustainable supply chains. 

Senior Insight Analyst, Michela Peason’s view: Aldi is continuing to invest in its UK operations via its network, its staff, and its suppliers. Having cemented its position as the UK’s 4^th supermarket in terms of share, it is aiming to further grow by perfecting its offer and creating resilience via a robust local supply chain and workforce, all underpinning its ambitions of reaching 1,500 stores in the market. The discounter also want to become the nation’s leading retailer for health, with a target of 85% of sales coming from healthy products by 2027, further helping it stand out from the competition.  

What to read next: Tesco Media’s new COO: five implications for brands

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