With newly appointed prime minister Liz Truss taking charge at a time when the economy is in a gloomy mood, the retail sector is pinning its hopes on this change in command.
When Truss took the oath of leadership and loyalty on September 6, just two days before the Queen’s death, a myriad of issues already needed her immediate attention, topmost among which were soaring energy costs and rising inflation.
Inflation unexpectedly cooled in August to 9.9 per cent although economists are still cautious of calling the peak. According to Bank of England, inflation will jump to 13 per cent as the energy crisis intensifies, while Citigroup estimates that inflation could even peak at 18 per cent in early 2023 – and Goldman Sachs forecasts it to breach 20 per cent if current natural gas prices remain on the rise.
Energy bill and Tax Cuts
Soon after taking charge, Truss capped soaring consumer power bills for two years. She told parliament on September 9 that average household bills would be held at around £2,500 a year for two years, sidestepping the expected 80 per cent leap that was due in October. Former Finance Minister Rishi Sunak’s energy rebate package for households will remain in force.
For businesses, the announcement came a couple of weeks later on September 21 when business secretary Jacob Rees-Mogg unveiled a raft of new support measures.
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Through a new Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers – including all UK businesses. This support will be the commercial and industrial equivalent to the Energy Price Guarantee put in place for households.
Under the new guidance, the government will provide a p/kWh discount on wholesale gas and electricity prices for all non-domestic customers. The government has set a Supported Wholesale Price, which is expected to be £211 per MWh for electricity and £75 per MWh for gas.
This represents less than half of the wholesale prices anticipated for the coming winter. Green levies paid by non-domestic customers have also been removed. Businesses do not need to apply to take any other action to access the Energy Bill Relief Scheme, with the discount automatically applied to bills.
Retailers’ bodies welcomed the move with Association of Convenience Stores (ACS) calling the government’s support package a “lifeline for the UK’s local shops that will enable them to keep trading and serving their communities”.
Retailers indeed have been struggling under increasingly crippling energy bills, with some fearing the very future of the business to be in danger. They are resorting to energy-saving tactics such as minimising the use of lights and chillers/freezers, and switching off the fridges altogether at night.
Pointing out that the recently-announced measures should prove more than “just a quick fix”, Federation of Independent Retailers (The Fed), has called on the government for firm assurance over the future course of policy and aid.
Jason Birks, National President of Fed
The Fed’s National President Jason Birks told Asian Trader that it is pleasing to see “our calls for a reduction in energy bills and a cap on tariffs have finally been answered”.
“However, it is vitally important that this is not just a quick fix. The government has said it will review the situation in three months, and we need firm assurances that ongoing financial support will be available as long as it is needed to see us through this crisis.
“It is about the survival of small businesses, helping them to remain at the heart of their local communities and continue to provide vital services,” he said.
Close on the heels of an energy relief scheme for businesses came the mini-budget. In delivering it, the new Chancellor of the Exchequer (and friend of Asian Trader) Kwasi Kwarteng said his statement will provide the “biggest package in generations” of tax cuts to send a clear signal that economic growth is the government’s priority. He announced the 45 per cent additional rate income tax band for those earning more than £150,000 will be scrapped entirely.
Kwarteng also added that next year’s increase in corporation tax from 19 per cent to 25 per cent will be jettisoned, and also confirmed the 1.25 percentage point National Insurance rise introduced earlier this year will be cancelled from November 6.
Birks from the Fed welcomed the mini-budget announcements, calling them a “lifeline” for local stores:
“By scrapping the increase in National Insurance contributions and the Social Care Levy, as well as reversing the proposed rise in Corporation Tax, the new Chancellor of the Exchequer has thrown us a lifeline,” he said.
HFSS and sugar tax
Apart from the announced measures, PM Truss is anticipated to have some game-changing moves in store that will have a direct impact on the grocery sector.
It is now being rumoured that Truss will scrap the government’s anti-obesity strategy after ministers reportedly ordered an official review of measures designed to deter people from eating junk food. The review could enable Truss to lift the upcoming ban on HFSS products being displayed at checkouts as well as re-enable “buy one get one free” multi-buy deals in shops. The restrictions on advertising certain products on TV before the 9pm watershed could also be ditched.
The reports of Truss’s alleged plans have created a stir in the sector, which was already marred with confusion over whether it will be applicable to smaller stores or not. The restrictions, set to come into force from October 1, will apply to medium and large retailers (with 50 or more employees) offering pre-packed food for sale in store and online, including franchises and “symbol group stores”. Micro or small businesses (businesses with fewer than 50 employees) are exempt from the volume price promotion and location restrictions, according to gov.uk.
Food and Convenience retail industry expert Scott Annan however believes that HFSS, if implemented, should be free from such discrepancies.
“If HFSS is part of a government strategy to improve the health of the nation then it should be universally implemented without retailer or hospitality exceptions,” Annan told Asian Trader.
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However, the reports of HFSS restrictions of being rolled back have been met with a predictable backlash from health authorities. Last week officials at the Office for Health Improvement and Disparities said they were “aghast” at the prospect of the new prime minister scrapping plans to battle junk food consumption.
Convenience and foodservice specialist Dev Dhillon echoed the opinions of health campaigners:
“I would like to see the government maintain its stance on regulation such as HFSS. I know that I may be going against the views of stakeholders in our industry, but I maintain that it’s not in our long-term interest to be damaging the health of our customers,” Dhillon told Asian Trader.
It is not only HFSS restrictions; Truss is also said to be preparing to scrap sugar taxes on soft drinks to ease the cost-of-living crisis in the country, The Times claimed, citing government sources.
However, there are still “question marks” over how the prime minister can overcome a number of legal and parliamentary procedural obstacles to scrap the soft drinks industry levy which was introduced in 2018 as a result of its inclusion in the Finance Act 2017.
Road Ahead
PM Truss is also reportedly mulling whether to launch a major review of Britain’s visa system, as the country faces acute labour shortages leading to major supply issues in the fresh produce and meat sectors.
The prime minister is set to defy some of her anti-immigration cabinet colleagues by making changes to the “shortage occupation list”, thereby lifting the cap on foreign labourers working in British seasonal agriculture.
The visa scheme, which was introduced to plug gaps in the agricultural workforce, has enabled 38,000 visas to be issued to farm workers — but the sector has warned that this is not generous enough to tackle severe ongoing labour shortages.
Business figures have welcomed the decision, with some described the move as a “real signal” that the government was serious about encouraging economic growth.
Going forward, the business rates is the next big area where Truss can make a difference.
Retail expert Dhillon also feels one of the areas where the government has an immediate and realistic ability to influence change is with business rates.
“Our business rates system is antiquated. It doesn't reflect the modern nature of commerce and is an outlier when compared to other developed economies. If radical change isn't implemented soon, we will continue to see a rise in vacant retail units and the associated impacts on communities,” he said.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium (BRC), agrees with Dhillon’s point of view regarding business rates.
Helen Dickinson, Chief Executive of the British Retail Consortium
“One immediate way the government can help retailers support their customers is to freeze the business rates multiplier for all retail businesses for the next financial year, protecting the industry from rates increases linked to inflation, and giving greater scope to hold down prices, protect jobs, and support the economy,” Dickinson told Asian Trader.
Truss is also considering cutting value-added tax (VAT) by five per cent across the board to help tackle the cost-of-living crisis. The last time the UK implemented a broad-brush cut to VAT was during the 2008 financial crisis.
A VAT cut can come in the form of such a broad-brush approach applicable to all sectors, or via a more targeted approach, resembling what is happening in many EU countries that are bringing-in VAT cuts in inflation-hit essentials like food, toiletries, cleaning products, and some categories of clothing.
Jason Birks emphasizes that more help and support is needed for the betterment of local stores.
“We will continue to push for more help on behalf of our members to ensure they have a viable and sustainable future,” Birks said.
BRC, meanwhile, feels that PM Truss will need to demonstrate “strong leadership” as the cost-of-living crisis deepens, saying retailers will continue to play their part, keeping prices “as low as possible” and helping households by offering discounts to vulnerable groups, expanding value ranges, raising staff pay, and offering reduced-cost or free children’s meals.
“The retail industry is ready to work with the new government to shore up consumer confidence and help deliver economic growth. Businesses need clarity on the government’s intentions as soon as possible so they can understand the inflationary impact of any policy decisions,” she concluded.
Snacking giant pladis has announced David Murray, currently leader of its UK and Ireland enterprise, will transition to the newly created position of global chief commercial officer.
After five years at the helm of pladis UK&I, Murray’s new role will see him take ownership of the company’s global platform and brand strategy along with its commercial transformation.
Mete Buyurgan will become the new managing director of pladis across Britain and Ireland effective 6 April.
Buyurgan, a pladis veteran of eight years, joins the Anglo-Irish division of the company from its Turkish, Eastern Europe and Central Asian operations which he ran since 2016.
Under his stewardship, pladis Türkiye, Eastern Europe and Central Asia grew revenue and profit despite significant headwinds and positioned itself at the forefront of the sustainability debate.
“While our brands like McVitie’s and Ülker have been part of peoples’ lives for decades, pladis is still a young business having started life nine years ago,” Geraldine Fraser, chief human resources officer, said.
“We have made tremendous progress together on our mission to build one of the world’s fastest growing snacks companies. Today, we take another step on that journey to evolve our business and position us for continued growth in an ever-changing retail and consumer landscape.”
Founded in 2016, pladis’ 16,000-strong team makes food across 27 bakeries and factories in 11 countries with its brands, like McVitie’s, Ülker and Flipz sold in more than 110 nations. pladis group revenue topped £2.7 billion in its most recent financial year ending 2023.
More than £20,000 worth of illicit tobacco and vapes were seized from multiple premises in an one-day operation in Meir by Trading Standards team along with officers from Stoke-on-Trent City Council and Staffordshire Police.
The operation is the latest across the city that resulted in 13 shops being closed in the last 12 months, and forms part of Operation Cece, which is a National Trading Standards initiative in Partnership with HMRC to tackle illegal tobacco.
Under the latest one day action, officers raided three shops in the area after reports of underage sales of illegal vapes and tobacco to children as young as 12.
The significant operation seized 1,084 packets of cigarettes, over 1,500 vapes and 165 large pouches of rolling tobacco.
The retail value was estimated at more than £20,000, plus more than £12,000 in evaded duty. Officers also seized 12 key rings that were either unsafe or had trademark issues.
Several people with no right to work in the UK, and other immigration issues, were found and their cases passed to the Home Office.
Councillor Amjid Wazir OBE, Stoke-on-Trent City Council’s cabinet member for city pride, enforcement and sustainability - said, “We will not tolerate the sale of illegal tobacco and vapes, which put residents at risk and cheat the taxpayer out of public money.
“Our Trading Standards teams are working round the clock to get illegal tobacco and vapes off the streets, and out of the hands of children. All forming part of corporate strategy and specifically helping to reclaim our streets.
Inspector Rebecca Price, from the Stoke South local policing team, said, “We’re working closely with the city council and wider partners in Stoke-on-Trent to tackle issues affecting local communities as part of our ongoing Making Great Places initiative.
“Retailers not complying with the law and putting local people at risk of harm are being targeted robustly on a proactive basis as part of this commitment, and I can assure local communities that similar enforcement alongside our colleagues will continue.”
The premises are now under investigation, and are facing possible criminal prosecutions including under the Licensing Act.
The Trading Standards work forms part of the city council mission to be a cleaner, greener and safer city for all who live, work and visit Stoke-on-Trent.
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Don Julio Tequila, owned by Diageo. The spirits giant sells billions of dollars worth of tequila and Canadian whisky in the US.
Photo by Anna Webber/Getty Images for Flipper's Boogie Palace
Spirits giant Diageo has suggested the US government consider tougher rules of origin requirements in trade agreements as an alternative to tariffs, a letter to the US Trade Representative showed.
In the March 11 letter, Diageo, the world's top spirits maker caught in the crossfire of US president Donald Trump's effort to remake global trade, argued that new rules of origin could support his aims and benefit the industry.
Such rules could give preference to goods, including alcoholic drinks, in which all ingredients and subcomponents are substantially sourced within the US or via its key trading partners, Alden Schacher, vice president of government relations at Diageo North America wrote.
This would deepen US supply chains, prevent "foreign adversaries" from using US trade partners to circumvent tariffs and support the administration's policy objectives such as growing the US economy, said the letter, one of hundreds published by the USTR from firms and trade associations about tariffs.
Diageo's proposed rules of origin would require that plants or grains used in the production of imported alcohol come from the US or the territory of a strategic trade partner - any country that has a trade agreement with the US, such as Mexico and Canada.
The company also suggested that the rules ensure the distillation also occurs in the US or the territory of the same partner, with any barrels used in ageing also sourced from one of those places.
Diageo sells billions of dollars worth of tequila and Canadian whisky in the United States. Executives have warned Trump's threatened 25 per cent tariffs on Mexico and Canada could deal a $200 million hit to operating profit in the company's second half alone, before mitigation measures.
In the letter, Schacher wrote that trade in distilled spirits is largely reciprocal and therefore actions to address imbalances are not necessary.
Schacher pointed out that Diageo employs thousands of US workers, has 11 US manufacturing sites, and spends $650 million every year on US inputs including barrels, glass and cans.
(Reuters)
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Asda Express stores offset sales dip at the supermarket
Asda on Friday reported a decline in its annual sales for the 2024 financial year, but the retailer has seen profits rising on margin gains.
The supermarket chain said its total revenue for the year to 31 December 2024 declined by 0.8 per cent to £21.7 billion, while like-for-like sales (excluding fuel) were lower by 3.4 per cent.
Asda grew adjusted EBITDA after rent by 5.8 per cent to £1.14bn during the year, driven by improved gross margins, particularly in non-food reflecting the strength and scale of its George business, as well as a full year of profit from the 356 Asda Express convenience stores and forecourt sites acquired from EG Group.
“Everyone is focused on making Asda the number one choice again for busy hard-working families who demand value. This is what’s driving all of our actions across pricing, ranging, merchandising and every part of the business,” Allan Leighton, Asda’s executive chairman, said.
Since the year end, Asda stepped up its investment in value by bringing back its Rollback to Asda Price proposition. Launched at the end of January, with an average reduction of 25 per cent across 4,000 popular products, Rollback has now been expanded to roughly a quarter of Asda’s entire range.
Asda said it will add thousands more products to Rollback at regular intervals during the year as part of its strategic shift to move its entire product range to a new low ‘Asda Price’ by the end of 2026.
Asda delivered £0.6bn in free cashflow during FY24, which helped reduce net leverage to 2.9x (FY23: 3.0x). The retailer said this enables it to invest in new value propositions like Rollback and Asda Price.
During the year Asda refinanced the vast majority of its 2025 and 2026 maturities of £3.2bn, including paying down £0.3bn from cash. This pushed out all the remaining maturities into the next decade.
“Looking ahead we still have plenty of work to get our business firing on all cylinders again,” Leighton said.
“While regaining customers’ trust will take time, we will undertake a substantive and well backed programme of investment in price, availability and the shopping experience to deliver this. This will materially reduce our profitability this year, which we expect to reverse as our market share recovers and improves over time.”
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Henry Westons Vintage 500ml is the number one cider SKU in the convenience channel
The unstoppable rise of crafted apple cider is setting the benchmark for success in the UK’s £1.1 billion off-trade cider market, according to the latest Westons Cider Report.
The leading cider producer advises that convenience retailers who prioritise premium products and strategic ranging will be best placed to drive sales in 2025.
Despite crafted cider thriving across the broader market, its share in convenience still lags slightly behind (20% vs. 24%). This gap presents an exciting opportunity for convenience retailers to tap into the premium crafted cider trend and unlock significant revenue.
Westons Cider’s milestone report reveals that, while total cider sales have edged up by just 0.1 per cent YOY, crafted cider is experiencing remarkable growth with a significant 14.6 per cent surge in convenience alone.
As consumers increasingly seek authenticity, quality, and heritage, premium crafted ciders are becoming essential for retailers eager to drive long-term success.
A decade of transformation in cider
Westons Cider predicted the rise of crafted cider in 2018 and, seven years on, the numbers prove just how transformative this shift has been. Back then, crafted cider made up just 9 per cent of apple cider sales — today, it accounts for nearly a quarter of the total cider market, adding an impressive £26.3 million to the category in the past year alone.
While the overall cider category has edged forward (+0.1%), crafted cider has surged ahead, growing at ten times (11.1%) the rate of the total market. This unwavering momentum cements crafted cider’s place as the fastest-growing segment in the industry.
This shift reflects a fundamental change in consumer preferences. A decade ago, cider was a broader, more fragmented category, featuring more brands and greater variety. Today, the focus has shifted — fewer brands, stronger premium offerings, and an emphasis on quality over quantity.
Crafted cider: A major untapped opportunity in convenience
Despite commanding a premium price of £4.32 per litre in convenience, compared to £2.76 for the total category, crafted cider remains underrepresented in this channel, with distribution at 95.4 per cent compared to 98.4 per cent across the total market. Bridging this gap could unlock an impressive £3.7m in value sales.
Even with limited shelf space, crafted cider continues to show a solid 5.8 per cent YOY growth, highlighting a strong and growing consumer appetite for high-quality options.
“Shoppers are looking for premium cider options in convenience, and retailers who give crafted cider the prominence it deserves will reap the rewards,” said Tim Williams, insight and innovation manager at Westons Cider.
“With crafted cider delivering strong margins and demonstrating double-digit growth, giving it prime position in chillers and on shelves will drive greater profits. The demand is already there – retailers just need to back the right brands.”
Key growth opportunities for 2025
The opportunity to recruit younger drinkers is ripe for the taking. While cider remains a household staple, penetration has slipped to 40.9 per cent, down from 43.9 per cent in 2022, showing that the category must evolve to stay relevant.
However, younger shoppers, particularly those under 45, are actively trading up to premium drinks, making crafted cider an aspirational yet accessible choice. Crafted cider is already gaining traction with affluent consumers, with ABC1 shoppers now accounting for 65.8 per cent of spend — up from 61 per cent last year.
Notably, crafted cider has the highest proportion of younger shoppers, with under-45s making up a larger share of spend compared to any other cider segment. This clear shift towards quality and authenticity presents a huge opportunity for convenience retailers to refresh their cider range and attract a new wave of consumers.
Apple cider remains the core of the category
Apple cider remains the core of the category. Accounting for nearly two-thirds (63.7%) of market value, apple cider continues to dominate. While pear cider’s overall share remains small at 4 per cent, premium crafted pear ciders are seeing renewed interest. Henry Westons Vintage Pear has added £550,000 in sales over the last year, alongside growth in other premium pear offerings. This suggests a clear opportunity for retailers to premiumise the pear cider segment, tapping into the same consumer demand that has propelled crafted apple ciders to success.
With limited chiller space in convenience, ensuring crafted apple cider has adequate facings is crucial to maximising sales. Stocking the right mix of single-serve formats for impulse purchases and larger multipacks for planned consumption will help capitalise on both shopper missions.
Shoppers are trading up across the drinks aisle, and cider is no exception. The crafted cider segment’s growth of over 10 per cent highlights the increasing willingness of consumers to pay more for quality, taste, and heritage. Convenience retailers who prioritise premium SKUs stand to gain the most from this trend.
Convenience category spotlights:
Crafted cider’s Southern stronghold: Crafted cider is particularly strong in the South, accounting for 73 per cent of volume in the five most southern TV regions. Convenience retailers in these areas should allocate more shelf space to premium crafted options to maximise sales.
British weather may be unpredictable, but cider sales don’t have to be: While summer remains cider’s peak season, unpredictable British weather has led to inconsistent sales patterns in recent years. June 2024 was unseasonably cool, leading to a 20.5 per cent drop in cider volume sales YOY, while August saw more rainfall than previous years, pushing volume down 12.5 per cent versus 2022. However, sales rebounded slightly compared to August 2023, which had particularly poor weather. Given this volatility, retailers should double down on major selling moments — like bank holidays and sporting events — where demand remains strong regardless of weather conditions.
No & low is pouring into the mainstream: The segment has grown 8.4 per cent YOY, highlighting increasing moderation trends. Stocking low/no alcohol apple and fruit ciders ensures a complete range to meet evolving consumer needs.
Independent retailers are outperforming the market: While total convenience cider value is up 2.1 per cent YOY, independent retailers are growing even faster, at 4.4 per cent YOY. This shows a particularly strong opportunity for crafted cider, which still holds only 17 per cent share in independents versus 20 per cent across total convenience. There is clear potential for independent retailers to expand their crafted cider offering and close this gap.
“As Westons celebrates 145 years of cider-making, it’s remarkable to reflect on how much the category has evolved,” Darryl Hinksman, head of business development at Westons Cider, said.
“What’s also clear is that authenticity and provenance matter more than ever. The past decade has seen major brewers attempt to capitalise on cider’s popularity with brand extensions, yet these failed to resonate with consumers in the long term. This reinforces a key lesson — shoppers are looking for genuine cider brands with real heritage, not just big names entering the category.
“Looking ahead to the next decade, we expect this refinement to continue, with cider becoming even more premium-driven. Shoppers are actively seeking authentic, high-quality options, and convenience retailers who align their ranges with these consumer trends and prioritise best-selling premium ciders, like Henry Westons and Stowford Press, will be the ones to unlock growth and maximise their cider sales.”
Top ten cider SKUs in the convenience channelWestons Cider Report
Henry Westons Vintage 500ml is the number one SKU in the convenience channel, more than twice the size of the second-placed product and in strong growth (+8.2%). Thatchers Gold 500mlx4 was ranked eighth last year and has risen to second. Inch’s is new to the top ten this year in eighth place.
Pack sizes are smaller in this channel with singles and four packs dominating the top ten. Larger packs have a role, however, as Strongbow Dark Fruit 10 pack is the third highest ranked pack.
The full report – including impartial stocking advice for retailers – is also available for digital download here.
All data Westons Cider Report 2025, Circana 52 w/e 28 December 2024 and Kantar, 24 December 2024.