Grocery Insights - June 2025

 Source: Grocery Insights, Steve Dresser - 24/06/2025

It's a definite step change in the market with volumes falling, customers making more shopping trips and inflation touching 5%. Customers react to this, and the sentiment has been weak for some time. The recent NI changes have not been swallowed by the sector (my shock!) but instead are being passed on to customers. For people heavy sectors like hospitality, retail and food production, any cost increase is bad news but the NI changes feel like a spectacular own goal that is only going to hurt the average UK customer. Convenience stands to benefit; with customers making more shopping trips, little and often, to minimise food waste and maximise budgets. What's interesting with the Kantar set is that Asda are starting to recover, this is despite them deflating themselves. IE sales value is reported by Kantar and Asda were only -1.7% for the 12 weeks to 15 June. SKU rationalisation - lines cut in price and then out of the range. This is likely showing the Asda plans is working and starting to take hold, whilst they were "negative 6" for such a long time, the tide is starting to turn and this is good news. They have so much more to go at and the SKU rationalisation programme will only help things too (IE better availability, fewer lines, more space for said lines). Asda are being different enough, focusing on lower and more stable pricing, rather than hi/lo that we are seeing across the rest of the market. Almost a journey back to hi/lo pricing, seemingly "ok" because it's wrapped in a loyalty blanket. ​ Asda price. Tesco and Sainsbury's both performed well, with sales growth of 7% and 5.7% respectively. Few can argue with Tesco, and whether you think Sainsbury's are going too far with their retail media brand galleries (I do) the sales keep coming. Unclear who this helps.   3d signage attracts a bigger (£) seemingly. Tesco are a juggernaut and their 7% rise in sales is of little surprise to anyone who visits the stores and admires their commercial acumen. Stores are strong, product ranges are strong, value stands out ever so well and their Clubcard work is seamless. Price cuts have also started to land - a retaliation to Asda? Morrisons were just +2.2%; their quarterly sales were strong in the week but their Kantar has stuttered, in direct correlation with Asda showing a recovery. Cause and effect must be proven but they stand to lose a lot from a recovering Asda. They're 8 miles apart in terms of the central office and there's a lot of geographic overlap from a store perspective too, so a recovering Asda will mean Morrison are in the firing line. The "magic" campaign to focus on Market Street will help, but Cafe's are closing earlier (a couple recently have advertised 8-5 opening hours) which is hardly helpful for a late night customer. Is closing a Cafe at 5pm too early? Their reliance on retail media and changing promotional focus towards bigger deals, that are more expensive to access has been notable too. Whilst Morrisons customers "love a bargain" it does inadvertently make them the polar opposite of what Asda are trying to do. Buy 4, Save 25% is generous but can be expensive. The customer will then decide. In other news - the cyber attack impacted the Coop with -0.7% sales impact, but for M&S, their progress continued as they traded through the cyber attack with +12% sales growth. An excellent return despite huge availability issues caused by the cyber attack. The discounters continue to grow too, whilst new space skews the number, Lidl were +11.2% and Aldi were +6.5% in the 12 weeks. Both will continue to pick up customers as the market conditions continue unabated. Lidl are now just 0.3% away from Morrisons on a market share basis, Aldi are 1% away from Asda in 3rd place. Tesco are 28.1% of the market now; just 1.9% away from their target of 30% market share. It's all to play for!