What a difference a year makes! In early 2023, inflation in the UK peaked at its highest level for more than four decades, however as 2024 progresses, there are definitive signs that the cost of living situation is easing for shoppers.
In June 2024, the UK's headline inflation remained at 2.0%, with food inflation falling by 0.2 percentage points to 1.5%, signalling the end of a two-year period of high inflation. This stability in inflation figures is likely to pressure the Bank of England to cut interest rates in the coming weeks.
Despite this apparent stability, caution is advised. Kris Hamer, Director of Insight at the British Retail Consortium, noted that many underlying factors contributing to high inflation persist.
"Energy prices have fallen from peak, but the UK's reliance on imported energy remains a vulnerability," he said. "Similarly, the impact of climate change on harvests at home and abroad, as well as rising geopolitical tensions, could increase commodity prices and translate into higher inflation in the future."
In the grocery sector, data from Kantar showed that grocery price inflation fell to 1.6% in the four weeks leading up to 7 July, the lowest level since September 2021.
This decrease in inflation coincided with the fastest rise in monthly footfall this year, with UK shoppers making 2% more trips to the supermarket compared to the same period last year, partly driven by the Euro 2024 football tournament. Notably, sales of branded products rose by 3.6%, outpacing private label sales, which grew by 2.7%.
However, overall British consumer spending contracted in June, impacted by adverse weather conditions. Barclays reported a 0.6% decline in spending on its credit and debit cards in annual terms, marking the first drop since February 2021.
KPMG has acknowledged an improving economic environment but highlighted ongoing struggles for many retailers. Official data indicated that retail sales volumes, excluding petrol, remain slightly below their pre-pandemic levels.
There is a glimmer of optimism with the appointment of a new prime minister, following Keir Starmer's Labour Party's landslide victory in the parliamentary elections on 4 July.
Welcoming the new prime minister, Helen Dickinson, chief executive of the British Retail Consortium, noted in July that Labour's manifesto made some crucial commitments for retail, from reforming business rates, planning and the apprenticeship levy, "and we now await the details of how these will be taken forward".
Here's an overview of the top ten supermarket retail chains in the UK, according to their most recently-available full-year turnover. All data is supplied by Retail-Index.
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1. Tesco
Turnover: €58.13 billion (2022)
Tesco is at the top of the list with an annual turnover for 2022 that amounted to €58.13 billion, according to Retail-Index.
Founded in 1919, the retailer operates 2,853 stores, as of 2023. Tesco's chief executive is Ken Murphy, who recently saw his pay package more than double to almost £10 million (€11.6 million). Elsewhere, the group has reiterated its commitment to its Central and Eastern Europe operations, despite seeing a recent drop in profits there.
2. Sainsbury's
Turnover: €33.79 billion (2021)
Sainsbury’s ranks in second place, reporting a turnover of €33.79 billion in 2021.
Sainsbury's chief executive is Simon Roberts. It was founded in 1869 and boasts some 2,623 outlets.
The retailer recently announce plans to cut its workforce by around 1,500 as it seeks to streamline operations. It added that it is confident of achieving solid profit growth in the coming year.
3. Asda
Turnover: €23.32 billion (2022)
In third place, with a turnover of €23.66 billion, is Asda. Asda was founded in 1949. The retailer operates 633 stores (as of 2022), and is majority owned by Zuber and Mohsin Issa (EG Group) and private equity firm TDR Capital.
Asda recently announced a deal to refinance some £3.2 billion (€3.7 billion) of its debt, while on the consumer side, the retailer has rolled out a new online prescription service.
4. Morrisons
Turnover: €20.98 billion (2022)
Morrisons is in fourth place, having reported a turnover of €20.98 billion in 2022, according to Retail-Index. It has 504 stores across the UK.
In September 2023, Morrisons announced the appointment of Rami Baitiéh, who formerly headed up Carrefour France, as its new chief executive. Elsewhere, the retailer recently announced the acquisition of 38 stores in the Channel Islands, from its partner SandpiperCI.
5. Aldi
Turnover: €17.8 billion (2022)
Ranking in fifth place, Aldi UK recorded revenue of €17.8 billion in 2022. The discounter operates a network of 935 stores across the UK (as of 2022) and has more than 43,000 employees.
As IGD put it in a recent editorial, Aldi's blend of a low-price proposition, differentiated offer and flexible store models is attracting increased numbers of shoppers to its UK stores.
6. Co-op
Turnover: €13.11 billion (2022)
The Co-operative 's food and wholesale business reported revenue of €13.11 billion in 2022, according to Retail-Index, putting it in sixth place in our list.
Co-op has more than 2,500 local, convenience and medium-sized stores in its network. It sold its petrol forecourt business to Asda in 2022, which has impacted its full-year profits, while also recently announcing an expanded partnership with Just Eat.
7. Lidl
Turnover: €10.6 billion (2022)
Lidl GB recorded annual turnover of €10.6 billion in 2022, according to Retail-Index putting it in seventh position.
The first Lidl GB store opened its doors in 1994, with the retailer now operating more than 800 stores, and boasting a workforce of more than 22,000 people. In April 2024, it achieved its highest market share in the UK to date, of 8.1%, according to Kantar.
8. Waitrose & Partners
Turnover: €8.12 billion (2022)
Waitrose & Partners reported sales of €8.12 billion in 2022, putting it in eighth position in our list. The group is part of the John Lewis Partnership, and operates 360 stores across the UK (as of 2022).
While it is considered a 'higher-end' supermarket chain than its rivals, Waitrose hasn't been immune to the cost of living crisis, recently announcing a further range of price cuts on everyday essentials such as chicken breasts, potatoes, butter and cream. It is also taking steps to improve the sustainability of its farmer supply chain.
9. Iceland
Turnover: €4.135 billion (2022)
Iceland operates under the Iceland and The Food Warehouse banners. Known for its frozen food offerings, Iceland reported a turnover of €4.135 billion in 2022, according to Retail-Index. It operates 991 outlets across the UK, and boasts more than 28,000 employees.
Last summer, Iceland announced it was shuttering its convenience banner, Swift, while elsewhere, it has sought to ease the cost burden on shoppers with regular price pledges.
10. SPAR
Turnover: €3.69 billion (2021)
SPAR is a well-established convenience store chain with more than 2,600 outlets across the UK. It reported a turnover of €3.69 billion in 2021, according to Retail-Index.
About Retail-Index
Retail-Index is a specialist supplier of management information on consumer retail markets, provided by Veraart Research Group in the Netherlands. Its mission is to supply managers with up-to-date key information on retail markets in Europe and support them in their international expansion.
The company dates back to 1964, when it started as a market research and marketing consulting company for consumer products and services. In 1989, it started publishing written reports on various retail sectors in Europe. As of 2005, it publishes its information on retailers through the online database and curated datasheet exports available on www.retail-index.com. A team of researchers manages the data to reflect upon current developments in the markets, collected from an extensive number of sources.
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