UK grocery: on underlying profits, Tesco out-earns the rest of the supermarket industry combined

Britain buys its food from an industry that keeps about tuppence in the pound. Tesco Stores — the company that actually runs the UK supermarkets, beneath the listed group — took £50.84bn through the tills and kept £1.66bn before tax, a 3.3% margin that counts as dominance here: it is more than Sainsbury’s, Aldi, Morrisons, Lidl, Waitrose, Iceland and Ocado Retail made put together on underlying trading (about £1.05bn, once Iceland’s and Ocado Retail’s losses are netted in — and setting aside Morrisons’ one-off £2.6bn gain on selling its petrol forecourts, which swells its statutory line this year and would otherwise swamp the comparison). That is the story of the 118 UK grocery retailers that publish a full profit-and-loss, which book £234bn of combined turnover — nearer £152bn once group layers filing twice and internal group vehicles are stripped out (see Methodology). The median operator keeps roughly 2.4p of every pound; scale is the only reliable way to more; and the two forces reshaping the industry — discounter growth and leveraged-buyout debt — are both visible line by line in the accounts. Figures are approximate — verify against a company’s own accounts before relying on any single number.

Read the shelf edge first

Four things change how you read every number below.

Two of the market’s biggest names aren’t in the set. Asda — the most indebted of the big chains after its 2021 buyout — and Marks & Spencer both file under a neighbouring retail classification, and the Co-op, as a mutual society, publishes its accounts outside the register this map is built from. This is a map of the supermarket trade as most of it is filed, not a complete league table — treat market-share reads accordingly.

The same trade appears more than once. Tesco PLC (£69.92bn, the listed group: UK stores plus Booker wholesale, Ireland and central Europe) and Tesco Stores (£50.84bn, the UK shops) are two layers of one business. WD FF (£4.20bn) is the holding vehicle of Iceland’s owning families, wrapped around Iceland Foods (£4.12bn) from the same Deeside head office. Ocado Group used to consolidate its half of Ocado Retail, but its latest accounts no longer do — the stake became an associate in April 2025, so the group’s £1.36bn of technology fees and Retail’s grocery sales are separate businesses here, not two layers of one. The £234bn gross total counts the remaining layers; the competitive reads below use one entity per business.

Morrisons keeps old badges in the drawer. Safeway Stores (£6.75bn, £460.0M of profit) and Safeway (Overseas) (£65.1M at a 15.5% margin) file from Morrisons’ Bradford head office — group-internal vehicles whose revenue and 34,700 staff overlap the group’s own numbers. Both are excluded from every competitive read, including the best-run table, where Safeway (Overseas)‘s 15.5% would otherwise top the market.

Margin is not one number here. A supermarket sells food it owns at retail prices; a forecourt operator’s turnover is fattened by low-margin fuel; Ocado Group sells technology and logistics fees, not groceries. Comparing margins across those models tells you about accounting, not about who runs better shops.

The giants: a 3p-to-nothing ladder

*Morrisons’ £138M is profit before tax from continuing operations, before exceptionals: the statutory figure was £2,728M, almost all of it a one-off £2,624M gain on selling the petrol-forecourt estate to Motor Fuel Group — we use the underlying trading figure. Its turnover still includes £1.7bn of the now-sold forecourt fuel revenue. †Ocado Retail’s latest statutory period is 70 weeks (December 2023 to April 2025 — the year-end moved to align with M&S), so the row overstates a normal year; the 52-week comparable revenue was about £2.83bn, up 15.5%. ‡Ocado Group’s −£377.6M is the underlying loss before tax from continuing operations: the statutory line was a £403M profit, thanks to a one-off £783M gain on remeasuring its Ocado Retail stake when it stopped consolidating the joint venture. Aldi’s consolidated accounts include its Republic of Ireland business with no split disclosed, so its UK-only figures are somewhat smaller than shown; Waitrose’s latest year is 53 weeks against a 52-week prior — roughly 2 points of its +7% is the extra trading week — and its accounts (to January 2026) run a year fresher than the other majors’.

The ladder is the market. Tesco’s UK stores keep 3.3p in the pound; Aldi keeps 2.3p — and its £416M of profit beats Sainsbury’s Supermarkets’ £313M on £10bn less revenue; Sainsbury’s, Lidl and Waitrose keep between 1p and 1.5p; Morrisons keeps 0.8p — and most of the debt from its 2021 buyout sits in holding companies above this one, so even that thin number flatters the group’s position. Then the ladder runs out: Iceland Foods’ shops roughly broke even, and the family holding layer wrapped around them (WD FF) turned that into a £7.4M loss once the financing above the shops is counted.

The growth pattern is as telling as the margins. Lidl is the only giant growing sales and headcount at pace (+8% revenue, +10% staff) — the discounter land-grab is now a Lidl story, because Aldi’s top line has slowed to +1% even as it keeps hiring. Sainsbury’s and Waitrose both grew revenue while cutting staff — margin defence, not expansion. And online still doesn’t pay: Ocado Retail lost £80M selling groceries — over a stretched 70-week accounting period, and with an 869-person headcount that is real (the warehouse and delivery workforce is employed by Ocado Group and charged in as fees) — while Ocado Group itself lost £378M on an underlying basis building the machinery. (Tesco’s own distribution arm is a giant in its own right — it anchors our road-freight map.)

The shape of the market

Almost all of the register — 1,666 active companies — is corner shops and single-site conveniences too small to publish a full P&L. The 118 that do are substantial businesses, and mostly profitable ones: the £5–25M and £25–100M bands run at 76–82% profitable. The striking weakness is at the very top — only 69% of the £1bn+ tier makes money, because that is where online grocery and the debt-carrying group layers live.

The independents out-margin the supermarkets

Filter out the group vehicles and a clear pattern emerges: the best independent grocers keep 4–9p in the pound — two to four times the supermarket majors. Two models dominate. Forecourt convenience — fuel plus a high-margin shop — puts Pearl Forecourts at 8.5% while growing revenue 19% and nearly tripling staff. And Northern Ireland’s independent supermarket chains are heavily over-represented: Property Management Services (N.I.) (a Portadown food-and-fuel retailer wearing a landlord’s name), Kellys Supermarkets, Lynch’s Foodstores, Woods Supermarkets and DSP Supermarkets all clear the bar — community-scale chains the discounters haven’t squeezed the way they have the mainland’s. Specialists earn their margin too: H Mart Europe, the Korean grocery chain’s European arm, keeps 4.2%, and Gloucestershire Gateway — the company behind the farm-shop motorway services on the M5 — keeps 7.6%.

…and 9 more between £30M and £42M, including three more Northern Irish chains. Safeway (Overseas), which would head this table at 15.5%, is a Morrisons group vehicle and excluded. Read the tiny-headcount rows with care: Global Fuel (UK) and the two NTS entities put £35–46M through 4–11 staff — fuel-supply and management structures, not store economics.

Growth, read with care

The fastest riser is a 106-year-old: The Royal Naafi — the armed forces’ retailer — grew 155% to £112.6M, contract consolidation rather than a business taking off. The clearest bought growth is Gobrands UK, the UK arm of rapid-delivery app Gopuff: +30% to £102.0M while losing £30.3M — a 30p loss on every pound of sales, with staff down 36% — the dark-store model still burning cash years after the land-grab. Pret A Manger (USA) (−44% margin) is a coffee-chain group entity that happens to sit in this category and says nothing about grocery. The genuine signal is growth backed by hiring at a profit: Karan Retail (+17% to £194.9M, staff +39%, 2.9% margin) and Pearl Forecourts (+19%, staff +173%, 8.5%) are convenience operators actually compounding.

Market structure: eight companies, 93p of every pound

On the raw numbers the top five hold 78.7% of the £234bn and the top ten 93.5% — and the curve is honest even though it counts group layers twice, because the duplication is concentration. Strip to one entity per business and eight companies — Tesco Stores, Sainsbury’s Supermarkets, Aldi, Morrisons, Lidl, Waitrose, Iceland and Ocado Retail — take about £142bn of the deduplicated £152bn: 93p of every pound in the mapped market. And that understates the real thing: Asda and the Co-op, both absent, would push the national figure higher still. Below the giants sits a thin mid-market of perhaps forty £25–100M regional operators, then nothing.

Ownership and vintage

This is an old industry that almost nobody new enters at scale: 34 of the 118 pre-date 1990 — Waitrose’s company is from 1908, NAAFI from 1920, Morrisons’ and Tesco’s from the 1940s — and only two companies incorporated since 2021 have reached the size where full accounts are published. Ownership skews personal for the independents (65 of 118 individual-owned) — these are family supermarket businesses, especially in Northern Ireland — while 13 carry the Holdings/Bidco-style naming fingerprint of buyout structuring. The leverage story, though, is bigger than that count suggests: the two most indebted grocers in Britain are Asda (outside the set entirely) and Morrisons (whose buyout debt sits above the entity mapped here) — in grocery, the buyout debt hides above and beside the map, not inside it.

What the map shows

1. Scale is the only moat. Tesco Stores kept £1.66bn at 3.3% — more than Sainsbury’s, Aldi, Morrisons, Lidl, Waitrose, Iceland and Ocado Retail combined on underlying trading, setting aside Morrisons’ one-off £2.6bn forecourt-disposal gain.
2. Grocery runs on tuppence. The median operator keeps ~2.4p in the pound; Sainsbury’s keeps 1.1p, Lidl 1.3p, Morrisons 0.8p. There is no fat anywhere in the middle of the ladder.
3. The discounter story is now a Lidl story. Lidl is the only giant growing sales and staff at pace (+8%/+10%); Aldi’s top line has slowed to +1% — though its £416M profit still beats Sainsbury’s on £10bn less revenue.
4. Leverage eats the thin margin. Morrisons keeps 0.8p with its buyout debt sitting above the opco; Iceland’s break-even shops become a loss at the family holding layer; Asda, the most indebted of all, doesn’t even appear.
5. Online grocery still doesn’t pay. Ocado Retail lost £80M selling groceries (over a 70-week period) and Ocado Group £378M underlying building the machinery; Gopuff’s UK arm lost 30p per pound of sales.
6. The best margins are in the smallest shops. Forecourt and convenience independents — many of them Northern Irish family chains — keep 4–9p in the pound, two to four times the supermarket majors.

Methodology and caveats

This covers the 118 UK grocery retailers — supermarkets, convenience chains and food-led forecourt operators — that publish a full profit-and-loss, out of a register of about 1,666; the corner-shop tail files small-company accounts and is invisible here. The category’s filing boundary is imperfect: Asda and Marks & Spencer sit under a neighbouring retail classification and the Co-op publishes as a mutual society, so none of the three appears, and national market-share numbers will differ from what this set implies. The £234bn headline total is the simple sum across all 118 and counts group layers twice — Tesco PLC over Tesco Stores, WD FF over Iceland Foods — as well as Morrisons’ internal Safeway vehicles; the deduplicated market is nearer £152bn, and competitive reads use one entity per business. Ocado Group’s latest accounts no longer consolidate Ocado Retail (the stake became an associate in April 2025), so the two Ocado rows are separate businesses rather than a double-count. Accounting periods are not perfectly aligned either: Ocado Retail’s latest statutory period runs 70 weeks (its year-end moved to align with M&S), which inflates its row, the totals it feeds and the concentration curve; Waitrose’s year is 53 weeks; and two rows use an underlying rather than statutory profit figure — Morrisons and Ocado Group — because one-off disposal and revaluation gains swamp their statutory lines (both noted under the giants table). Aldi’s consolidated accounts include its Republic of Ireland business, with no split disclosed. Margins are not comparable across the category’s different models (supermarket principal sales, fuel-heavy forecourt turnover, technology-fee income, group-internal recharges), and tiny-headcount entities with large revenue are supply structures, not shops. Each row uses the latest accounts available when the data was assembled — mostly years ending between October 2024 and March 2025 — and newer accounts may since have been published. Figures are approximate and business descriptions are directional. This is analysis, not financial advice — verify any specific figure against the company’s own accounts.