{"id":496057,"date":"2025-10-13T11:54:13","date_gmt":"2025-10-13T11:54:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/496057\/"},"modified":"2025-10-13T11:54:13","modified_gmt":"2025-10-13T11:54:13","slug":"mark-ritson-an-almighty-shitstorm-is-coming-for-uk-supermarkets-this-christmas","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/496057\/","title":{"rendered":"Mark Ritson: An almighty shitstorm is coming for UK supermarkets this Christmas"},"content":{"rendered":"

Prices need to rise but supermarkets are doing everything possible to push them down. Something has to give. Mark Ritson warns it\u2019s time to batten down the hatches for the retail reckoning on its way to the UK.<\/strong><\/p>\n

You aren\u2019t really allowed to write cliches like \u201cperfect storm\u201d in a column. It\u2019s like pasting stuff from Wikipedia, starting with a dictionary definition, or using a fancy foreign word when simple English would suffice: verboten.<\/p>\n

So I\u2019m going to call it something else. But trust me, when it comes to the current state of the British high street, the metaphorical meteorological conditions are unprecedentedly shithouse. Two competing weather systems are heading for the UK coastline, each raging with Force 10 gales, and each blowing in exactly the opposite direction from the other.<\/p>\n

\n Want to go deeper? Ask The Drum<\/p>\n

To the west, a high-pressure system containing extended inflation approaches. Check any economics textbook for the list of inflationary precursors and you have an accurate summation of the current UK economy: rising energy costs, supply chain disruption, labor shortages, increased legislation, higher wages, softer socialist fiscal policy, climate-related shocks, global commodity spikes, Brexit-related trade frictions and a host of geopolitical aftershocks.<\/p>\n

Add all this together, and it\u2019s apparent that prices will need to go up, especially in the grocery sector. Current forecasts grimly predict UK food prices surging another 5.7% by year\u2019s end.<\/p>\n

But to the south, another imminent storm \u2013 this time a low-pressure system \u2013 barrels ominously into sight. Britain\u2019s supermarket sector has always been a fiercely competitive arena, but the intensity of current trading has even hardened retail veterans wincing. We are in a fervent price war, and every price is being pushed down.<\/p>\n

As we approach Christmas, Asda has slashed the prices of 956 everyday items in a major bid to win back cost-conscious shoppers, covering everything from pasta and tea to its Free From products for those with dietary needs. Lidl isn\u2019t to be outdone \u2013 a \u00a3250m commitment to price cuts across more than a thousand items is complemented by its Lidl Plus loyalty scheme that offers weekly rewards to regular shoppers. Aldi, meanwhile, continues to invest in cost deflation for consumers and claims the title as the nation\u2019s cheapest supermarket by a whisker, fueling competitive rhetoric and aggressive basket pricing.<\/p>\n

Tesco, the sector\u2019s anchor, promises \u201cstrong deals\u201d and is marching into the festive season boasting its largest market share and a formidable Clubcard loyalty programme. Sainsbury\u2019s’s is price-matching Aldi and implementing a three-year plan to deliver \u00a31bn in savings. Morrisons has reduced prices an average of 18% on more than 650 essential products, including fresh meat, pasta, rice, olive oil and laundry detergent, while increasing in-store promotions.<\/p>\n

The outlook is tempestuous with these conflicting weather systems thundering overhead.<\/p>\n

Prices need to rise, while retailers will do everything possible to push them down.<\/p>\n

Something has to give. As we enter 2026 expect a combination of tactics from British supermarkets intent not only on surviving, but thriving, in the inflationary environment ahead.<\/p>\n

Private label expansion<\/strong><\/p>\n

When premium branded goods seem out of reach, supermarkets push their own-label options, often now positioned as premium, healthy, or restaurant-quality alternatives. Private labels typically allow more price flexibility, less supplier negotiation, and larger margins, while simultaneously offering the shopper \u201ctrade down\u201d options that sidestep the stigma of buying cheap but deliver the emotional reward of saving money. Just over half of all UK grocery sales are now private label. Many will tell you that 50% is the threshold for own-brand sales that cannot be exceeded.<\/p>\n

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Bullshit.<\/p>\n

Expect 2026 to prove the point.<\/p>\n

Supplier squeeze<\/strong><\/p>\n

Suppliers get squeezed whatever the situation, but with chains such as Asda now convening annual supplier summits to demand fresh price concessions, things are about to get even more pressurized. Brands, especially those reliant on shelf space or exposure above the discounters\u2019 formidable private labels, will find themselves asked to take margin cuts or offer aggressive promotional support. For as long as I have been writing about marketing, suppliers have claimed, in private, that they cannot give up any more margin… before subsequently giving up more margin. With consumers tightening belts and turning to private labels, there really isn\u2019t much suppliers can do except survive and take it in the pants. I accept that\u2019s not an official Michael Porter strategy, but it doesn\u2019t stop it from being the best option in the shitty, shitty months ahead.<\/p>\n

Profit sacrifice<\/strong><\/p>\n

That\u2019s not to say the retailers are having a fun time either. All British supermarkets run lean, but some have more fat than others to burn. Tesco\u2019s 3.9% margin looks tight but is actually the best in the category. This, combined with its sheer scale, gives Tesco the most room to sacrifice profits to outlast rivals and steal share. In contrast, Lidl GB runs on the fumes of less than 1% gross margin, but they, like German cousins Aldi, operate adroitly at this level. It\u2019s Asda (2.4%) that probably has the least fat to survive a long and engaged price war, whatever its current promotions might communicate to shoppers.<\/p>\n

Card playing<\/strong><\/p>\n

The recent moves by Tesco, Lidl, Sky, and British Airways to boost rewards and perks show that supermarkets see value schemes as both shield and sword. They offer discounts and exclusive prices to build emotional connections while deepening data capture and targeting capabilities. Clubcard, Lidl Plus, and Nectar programs will become more sophisticated in 2026, pushing weekly rewards, dynamic pricing, and tailored offers at unprecedented frequency.<\/p>\n

Behavioural economics<\/strong><\/p>\n

Despite the titanic efforts of Rory Sutherland, who pops up on my TikTok feed more often than Selena Gomez, I still regard behavioral economics as relatively weak fare. In marketing terms it\u2019s hand trickery, counter-intuitive tactical stuff that entertains but rarely delivers. The exception comes with pricing, where the way a price is presented, communicated, anchored or framed is usually more important than the price itself.<\/p>\n

Apply that to British supermarkets, which control the products, prices and the presentation of everything in store, and you have the potential for pricing subterfuge worth many millions. Not through reducing prices, but reducing the ability of consumers to assess and react to them. Expect more \u2018Pick of the Week,\u2019 \u2018Rollback,\u2019 and time-limited promotions designed to drive purchase urgency and maximize perceived savings, even as average prices creep slowly upward.<\/p>\n

Less for more<\/strong><\/p>\n

Shrinkflation will persist and escalate.<\/p>\n

Rather than overt hikes, supermarkets and brands will quietly reduce pack sizes, demanding lower prices from suppliers while asking for the same price from consumers. Your box of Kellogg\u2019s Corn Flakes is 50g lighter than it was last year but still priced the same. Mull that over a cup of PG Tips if you have any left, given you are 40 bags lighter per box than 2024.<\/p>\n

While the risks of alienating loyal customers are real, data suggests most notice a price jump more than a weight reduction; as long as trust isn\u2019t irreparably breached, the strategy remains hotly deployed throughout the sector.<\/p>\n

Can tech save the day?<\/strong><\/p>\n

Finally, a quiet technological revolution will take hold. It may not be even noticeable from a shopper perspective, but behind the scenes, British retailers are hell-bent on using higher tech to cut costs. Robots are taking over warehousing, shelves will be automatically scanned allowing AI shelf replenishment and prediction, and price labels will be electronically presented allowing for dynamic pricing.<\/p>\n

It might sound like one of those bullshit talks from a tech bro high on the pornography of change, but these projects are already underway and set to increase as each proves itself as a method for operational efficiency and fixed cost cutting.<\/p>\n

The Christmas feels<\/strong><\/p>\n

All these spiky commercial incentives need to be wrapped up in a warm coat of nostalgia and seasonal super-consumption, which is why, of course, our Lord Jesus was born. British retailers have been following the John Lewis playbook with ever greater media spend over the past decade. As the price war sharpens and margins creak under the weight of another round of Aldi-matching discounts, Britain\u2019s supermarkets will turn to a sugar-laden arsenal of Christmas TV ads for salvation. From late October expect a sleigh-bell symphony of jingles, perfectly cast crumbly grandads and snow-dusted slow-motion food-porn cutaways.<\/p>\n

These annual cinematic hugs are designed to drive seasonal salience during the most important trading month while adding the all-important Yuletide power to drive basket size up and price sensitivity down. It\u2019s going to get pretty sticky out there over the next few months.<\/p>\n

So, there we have it. It\u2019s going to be one hell of a marketing run-in. Consumers will win. Suppliers will lose (again). And the big supermarkets will go head-to-head in one of the most competitive categories on the planet.<\/p>\n

Mark Ritson is inviting entrants to his MiniMBA in Brand Management<\/a> for the class of April 2026.<\/strong><\/p>\n

Get in touch with Mark on LinkedIn<\/a><\/strong><\/p>\n

Read more opinion on The Drum<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Prices need to rise but supermarkets are doing everything possible to push them down. Something has to give.…\n","protected":false},"author":2,"featured_media":496058,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[748,393,4884,1144,363,712,16,15,1764],"class_list":{"0":"post-496057","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"category-united-kingdom","9":"tag-britain","10":"tag-england","11":"tag-great-britain","12":"tag-northern-ireland","13":"tag-retail","14":"tag-scotland","15":"tag-uk","16":"tag-united-kingdom","17":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115366727980372045","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/496057","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=496057"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/496057\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/496058"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=496057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=496057"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=496057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}