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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"
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
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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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
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
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
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
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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