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 boosts loyalty scheme with produce bonus

• Morrisons considering £1bn property deal to support growth strategy

• Lidl introduces Valentine’s Day meal deal

• Focus on convenience leads Tesco’s 2026 store development programme

• AF Blakemore recorded sales down 8.1% in 2024/25

Asda boosts loyalty scheme with produce bonus   

Asda has quietly rolled out a smart enhancement to its Asda Rewards loyalty app. Since the start of the year, Asda Rewards members have been able to generate a 10% bonus for their Cashpots on instore purchases of fresh fruit and vegetables. This echoes similar schemes in markets like Denmark and Norway where retailers like REMA 1000 and KIWI have offered customers decent loyalty bonuses on fresh produce. REMA shoppers also get an extra 25% bonus on eight different produce items each week.

Retail Futures Senior Partner Bryan Roberts’ view: As highlighted in our Next Level Loyalty report, this is a successful mechanic on a number of levels: it’s a more democratic approach to loyalty for an EDLP retailer (it doesn’t penalise non-members); it incentivises the purchase and consumption of fresh produce; and it will generate loyalty (the bonuses have to be redeemed within the retailer in the future). Morrisons had a similar mechanic or the month of January, while Southern Co-op has been offering a 15% discount on produce for members for a while now. It will be interesting to see if any other retailers in the UK pursue a similar route, perhaps even adding a local or seasonal angle. Either way, good stuff from Asda.

Morrisons considering £1bn property deal to support growth strategy   

Morrisons is considering a £1 bn property deal to unlock investment for its growth strategy. As reported by Sky News, Morrisons has appointed real estate advisory firm CBRE to assess options for raising finance against its freehold store portfolio. The process is believed to be at an early stage and could take the form of a medium to long-term borrowing deal secured against its supermarket sites, rather than a sale and leaseback transaction generally preferred by retailers. 

Senior insight Analyst, Alex Rowberry’s view:  with its market share stabilised, Morrisons will be looking to improve its sales performance, which despite being in growth has been underperforming the market, to fend off the challenge from Lidl. Unlocking a potential £1 bn will allow the retailer to invest in prices and stores while also servicing its debt burden. 

Lidl introduces Valentine’s Day meal deal  

The discounter has launched a meal deal offering shoppers a side, main, dessert and Prosecco for £12.95. The product selection is made up of its premium Deluxe private label range, with NPD aligned to the occasion. 

Insight Partner, Dan Butler’s view: Lidl is stepping up its occasion’s activation, with a deal that undercuts competitors and appeals to the growing demand for restaurant-at-home experiences. It has made good use of ESLs to help shoppers navigate the promotion, but I would have liked to see more signage around the fixture to highlight the total price and what is included in the deal. 

Focus on convenience leads 2026 Tesco store development programme

Market leader Tesco has revealed its plan to accelerate the growth of its Express format in 2026, aiming to add 70 new stores by March 2027.  The new store pipeline has been notably boosted by the acquisition of five former Amazon Fresh sites in London, following Amazon’s decision to exit the channel last year with the closure of all 19 of its ‘Fresh’ stores.  Alongside this focus on convenience Tesco will also open two new large stores in 2026, both in Scotland, at Pitlochry and Heartlands.

Insight Partner, Patrick Mitchell-Fox’s view: the acquisition and conversion of the Amazon Fresh sites at Kensington High Street, Moorgate, Hounslow, Aldgate East and Wembley is a great opportunity for Tesco to further extend its presence in high traffic locations around the capital.  While Amazon Fresh failed to gain significant traction in the convenience sector, the willingness of Tesco to take on these stores suggests that it believes these locations have significant performance potential for its well-honed model on convenience.   As well as this expansion in London Tesco will be adding new Express stores in locations right across the UK including neighbourhood sites from Bickington in Devon to Willyford in Scotland. 

AF Blakemore recorded sales down 8.1% in 2024/25

Multi-channel wholesaler and SPAR retailer, AF Blakemore suffered an 8.1% fall in turnover in its financial year 2024/25 as recorded in accounts filed with Companies House.  Impacted by weak demand in the convenience channel, especially in traditional categories such as tobacco, vapes and alcohol, the group saw sales down in its company-owned stores division, Blakemore Retail as well as Blakemore Trade Partners supplying independent SPAR stores.  In addition, the business also saw year-on-year declines in its Wholesale and Foodservice divisions.  Overall turnover dropped to £1,088m from £1,184m in the prior year.

Insight Partner, Patrick Mitchell-Fox’s view: the company recognises that it will continue to face headwinds in categories like tobacco ongoing, however it has set out a concerted strategy for future growth looking especially to driving opportunities in fresh foods above all.  In the current year Blakemore reports improving grocery retail sales, boosted by investment in store refreshes and proposition changes to support shopper missions focused on ‘food for now, food for soon and food for later’.  Positive impacts are also now being felt from the new contract to supply brands to M&S and the expansion of major forecourt customers such as EG On The Move.

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