2025
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UK Supermarkets Market Report 2025
2025-12-04T12:00:56+00:00
REP5B894718_71F0_4B9D_AE57_D20EA7CC7DC9
2195
189354
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Report
en_GB
The supermarket channel is estimated to grow by 2.1% in 2025 in value terms. However, adjusted for inflation, volume sales fell and the channel continued to lose share of the…
UK
Food and Drink Retail
simple

UK Supermarkets Market Report 2025

"Value-for-money remains top of the consumer agenda, but moving forward large-format stores have to lead more on the healthy eating revolution"

Michael Oliver, Senior Retail Analyst

Michael Oliver, Senior Retail Analyst

UK Supermarkets Industry – Trends and Insights

  • The supermarket channel is estimated to grow by 2.1% in 2025 in value terms. However, adjusted for inflation, volume sales fell and the channel continued to lose share of the wider market.
  • Volume decline is not a trend unique to large-format stores, with 47% of shoppers actively cutting grocery spend, but a growing need for convenience better insulated rival channels, namely discounters and online, from volume decline.
  • In a high inflationary market, margins in the sector have been squeezed both due to external factors and the growing price-war, as leading players react to shoppers’ demands for value.
  • The biggest threat to large-format stores is complacency, failure to sharpen value perception and differentiate in a crowded market.
  • The biggest opportunity lies in bold repositioning: using tech and consumer demands for wellness and experiential formats to redefine the role of the physical store. The largest players are uniquely positioned to leverage data, technology and store space to move beyond simply price leadership, to experience-rich, health-centric destinations.

Key Issues Covered in the Report:

  • The size of the UK grocery and supermarket sector, and the continued evolution in channel use
  • How consumers are balancing need for value with rising interest in health, wellness and transparency
  • Key drivers of retailer choice, including the impact of price, store design and technology
  • The evolving role and expectations of loyalty schemes in driving patronage
  • Attitudes towards shopping for groceries, including impact of retail media and use of AI
Report AttributesDetails
Published DateNovember 2025
Report AuthorMichael Oliver, Senior Retail Analyst
Market Size Data2019-2025(est)
Market Forecast Data2026-2030
Measurement MetricsRetail Sales (inc VAT) in £
Consumer Data2,000 internet users aged 16+, August 2025
Leading UK RetailersTesco, Sainsbury’s, Asda, Aldi, Lidl, Morrisons, M&S, Co-op, Waitrose, Iceland

Report Scope

The main focus of this Report is the supermarkets of the market leaders – those stores in which people have historically done their main shop.

The term ‘supermarket’ takes in a very broad selection of store sizes. Tesco, for example, has stores ranging from 10,000 sq ft, small high-street supermarkets to over 100,000 sq ft hypermarkets, with an average supermarket size of around 39,000 sq ft. Broadly speaking, the unifier between these stores is the ability to serve, first and foremost, a shopper’s main shop, or primary grocery needs. As size increases, the range of non-foods and other services accommodated also increases, with the trade-off being that the largest stores are usually located outside of urban areas and often need a dedicated trip to visit.

While touched upon in this report, discounters are excluded from our definition of supermarkets as, while often similar in size to the supermarkets of the leading players, in reality they fall between the supermarket and convenience sectors.

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  1. EXECUTIVE SUMMARY

    • What you need to know
    • Outlook for the UK supermarket sector
    • Opportunities
    • Become a ‘health partner’ to counter volume decline
    • Use health and wellness support as a USP in loyalty
    • As stores get smarter, ensure they don’t add friction and remain human
  2. THE MARKET

    • Snapshot – market size and forecast
    • The UK’s economic outlook remains challenging
    • Graph 1: British household financial confidence, 2019-25
    • Inflation remains at the forefront of consumers’ thoughts
    • Shoppers are prioritising spending in other areas
    • Interest in weight-loss medicines to squeeze volumes
    • Grocery retail in a more-regulated HFSS landscape
    • Grocery retail sales reflect population growth, inflation and consumer choice
    • Grocery sector to see steady growth through to 2025
    • Graph 2: market value forecast for all grocery retail sales (inc. VAT), 2019-30
    • Supermarket sales to climb in 2025, but growth driven by inflation
    • Supermarkets have been ceding share to discounters and online
    • Growth forecast to slow in the supermarket channel
    • Graph 3: market value forecast for supermarket retail sales (inc. VAT), 2019-30
    • Supermarkets remain the largest channel, but are under pressure
    • Online and discount channels gaining greater share
    • Graph 4: estimated share of total grocery sales, by format/channel, 2015-25
  3. THE CONSUMER

    • How and where consumers shop for groceries
    • Shoppers are happy to use various formats to meet needs
    • Tesco dominates and has widened the gap with rivals
    • Tesco’s market leadership results from strong appeal across the age spectrum
    • Graph 5: leading grocery retailers, shopper demographics (main and top-up shoppers combined), 2025
    • Responding to consumer needs in health and wellness
    • Consumers are hungry for information about healthy eating
    • Enabling healthier eating
    • Shoppers want to make their own choices
    • Subtle strategies for healthier swaps
    • Physical stores are underutilised for personalised health engagement
    • Graph 6: interest in diet-related in-store initiatives, by generation, 2025
    • Turn the store into a supportive health environment
    • Elevating loyalty to meet future needs
    • Loyalty schemes remain a core driver of patronage
    • Price-focused loyalty is still a key footfall driver…
    • …but consumers will increasingly demand more
    • Reframing own-label
    • Own-label is a key driver of choice of retailer
    • Private-label innovation is critical to stand out in the market
    • Graph 7: launches by the top ten leading grocery retailers carrying the claim ‘premium’, 2020-25
    • Drive in-store traffic with private label buzz
    • Position a private label as an everyday wellness partner
    • Enhancing the in-store experience
    • Store enhancements must complement the core motivators of value and convenience
    • Create reasons to visit by investing in the experience
    • Convenience-driven technology should also boost the in-store experience
    • Don’t forget the importance of the personal touch
  4. RETAILER ACTIVITY

    • Leading retailers
    • Tesco continues to stretch its lead over rivals
    • Graph 8: estimated market share of the top 10 grocery retailers, 2025
    • Discounters continue physical expansion and upgrades
    • Countering inflation and discounters: the return of the ‘price war’
    • Rapid delivery becomes a key battleground
    • Launch activity and innovation
    • Retailers switch focus of investment and innovation back to stores
    • Harnessing tech to enhance the in-store experience
    • ESLs become a more common sight in UK retail
    • Guiding consumers to make healthier choices
    • Innovation aims to boost the appeal of loyalty schemes
    • Tesco leads in ad spend, but discounters are growing their investments
    • Graph 9: top ten grocery retailers spending on above-the-line online display, direct mail and social media advertising expenditure, 2025
    • Waitrose puts a nostalgic spin on its premium range
    • Tesco’s Clubcard challenges look to nudge healthier eating
    • Sainsbury’s – Waynesbury’s Nectar Prices campaign emphasises personalisation
    • Lidl goes viral with AI-generated products
  5. APPENDIX

    • Market definition
    • The market
    • Forecast methodology
    • Forecast methodology – fan chart
    • Market size and forecast of all grocery retail sales
    • Market forecast and prediction intervals
    • Market size of supermarkets
    • Market forecast and prediction intervals
    • The consumer
    • Consumer research questions
    • Consumer research methodology – UK
    • UK generation groups
    • Retailer activity – supplementary data
    • Leading retailers: historic market shares
    • Leading retailers: revenue
    • Leading retailers: outlets
    • Leading retailers: sales per outlet
    • Leading retailers – sales area
    • Leading retailers: sales density
    • Leading retailers: operating profits
    • Leading retailers: operating margins
    • Advertising spend
    • Share of spending by advertising channel
    • Other data source methodologies
    • Mintel Spark
    • Nielsen Ad Intel coverage
    • Abbreviations and terms

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