While UK inflation has remained high for most of 2023 – food and drink inflation peaked at 19.2% in March, the highest level for 45 years – as we look ahead to 2024, there are finally signs that the cost of living situation is easing for shoppers.
According to Office for National Statistics data, the price of food and non-alcoholic beverages rose by 10.1% in the year to October 2023, which was down from 12.2% in September. The biggest contributions came from milk, cheese and eggs, and vegetables, which were 7.9% higher in the year to October, compared to 12.3% in September.
In addition, the Bank of England, which had been increasing interest rates to combat inflation, paused its rate hikes in September after 14 consecutive increases.
Despite this more optimistic situation, some 43% of adults across the UK say that they have spent 'more than usual' on their household shopping in recent weeks, while close to hale (46%), said that they were buying less food when shopping. Rising food costs were cited by 52% of respondents as a reason for changing their shopping habits.
Separately, the British Retail Consortium recently noted that food inflation decelerated to 7.8% in November, down from 8.8% in October, according to NIQ data, which was the seventh consecutive monthly deceleration. However, the BRC warned that this easing of cost pressures may be only temporary, with a myriad of additional costs looming on the horizon for retailers.
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“Retailers are committed to delivering an affordable Christmas for their customers," Helen Dickinson, chief executive of the British Retail Consortium, commented in late November. "They face new headwinds in 2024 – from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations.
"Combining these with the biggest rise to the National Living Wage on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”
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 has 367,321 employees (as of 2021) and 4,673 stores (2021). Tesco's chief executive is Ken Murphy.
Recently, Tesco chief executive Ken Murphy noted that while the retailer continues to face external price pressures, it was doing "everything in [its] power" to make Christmas shopping affordable for consumers.
Read More: Matthew Barnes To Succeed Jason Tarry As Tesco UK CEO
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2. Sainsbury's
Turnover: €33.79 billion (2021)
Sainsbury’s is 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 has 189,000 employees, along with 1,400 outlets.
In November, Roberts said that changes to consumer behaviour that emerged during the cost-of-living crisis over the past year are likely to linger, including increased eating at home, and a surge in demand for private label and frozen products.
Read More: Sainsbury’s Half-Year Results – What The Analysts Said
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3. Asda
Turnover: €23.66 billion (2021)
In third place, with a turnover of €23.66 billion in 2021 is Asda. Asda was founded in 1949. The retailer operates 633 stores (as of 2021) and 145,000 employees (2022).
In October, Asda completed the acquisition of the majority of EG Group’s UK & Ireland business for an enterprise value of £2.07 billion (€2.4 billion), creating a forecourt and retail powerhouse with a combined revenue of nearly £28 billion (€32.1 billion).
Read More: UK Shoppers 'More Optimistic' About Festive Season, Asda Says
4. Morrisons
Turnover: €20.47 billion (2021)
Morrisons is in fourth place, having reported a turnover of €20.47 billion in 2021, according to Retail-Index.It has 497 stores and over 100,000 employees.
In September, Morrisons announced the appointment of Rami Baitiéh, who formerly headed up Carrefour France, as its new chief executive. He succeeds David Potts, who stepped down from the position after nine years.
Read More: Morrisons Invests £4m In Price Cuts
5. Aldi
Turnover: €15.87 billion (2021)
In fifth place,Aldi UK recorded revenue of €15.87 billion in 2021.
It has 39,234 employees in the UK, and its chief executive is Giles Hurley.
In September, Aldi announced plans to accelerate investment in the UK market in the period to end-2024, following an increase in profit in its 2022 financial year. It recently announced its 1,000th store opening in the UK, and is targeting 1,500 openings in the coming years.
Read More: Aldi’s UK Results Pave The Way For Further Expansion, Notes GlobalData
6. Co-op
Turnover: €12.99 billion (2021)
The Co-operative 's food and wholesale business reported revenue of €12.99 billion in 2021, according to Retail-Index, putting it in sixth place in our list.
Shirine Khoury-Haq is the group's retail chief executive. Co-op has more than 2,500 local, convenience and medium-sized stores in its network.
Last year, the group sold its petrol forecourt business to Asda in a move that bolstered the latter's advance into the convenience sector.
7. Lidl
Turnover: €9.05 billion (2021)
Lidl UK recorded annual turnover of €9.05 billion in 2021, putting it in seventh position.
The first Lidl GB store opened its doors in 1994, with the retailer now operating more than 950 stores and 13 regional distribution centres across Britain, employing over 23,000 people.
In September, Lidl GB said that its lower prices are attracting a growing number of shoppers – an additional 1.5 million customers in the 12 months to 28 February 2023. Elsewhere, the group recently announced that it had become the third largest supermarket in London, surpassing Asda.
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 331 stores across the UK.
While it is considered a 'higher-end' supermarket chain than its rivals, Waitrose hasn't been immune to the cost of living crisis, announcing in September that it was lowering the price of a range of household essentials.
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.
Earlier this year, Iceland pledged to invest £26 million (€30 million) annually to support shoppers as they navigate the cost-of-living crisis, announcing in September that the number of reduced price products in its range had grown to 1,000. Also, in July, the retailer said that it was discontinuing its convenience store brand, Swift.
10. SPAR
Turnover: €3.69 billion (2021)
SPAR is a well-established convenience store chain with over 2,600 outlets across the UK. It reported a turnover of €3.69 billion in 2021, according to Retail-Index.
As for the year ahead? The cost of living crisis will probably persist throughout most of 2023, and most UK retailers have already stepped up the range of promotions they offer to shoppers, particularly when it comes to private label.
The UK is renowned for being one of the most competitive European grocery markets – don't expect this to change any time soon.
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 onwww.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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