Retail Week - Editor's Choice - Friday 2 October 2026 - George MacDonald's newsletter, fully read
M&S x Sephora; Aldi's £1bn bet; How AI is reshaping retail
All 24 Retail Week articles linked in the newsletter were opened and read in full through a Retail Week subscriber login. Each story below combines the article with the editor's own framing from the email, then a short digest take. Sections follow the newsletter: the editor's three lead topics, this week's top stories, and more headlines.
M&S x Sephora, and a Boots sale
George MacDonald's frame: beauty retail was centre stage this week - Sephora into 100 M&S branches, and a Boots sale that looks days away. "In a year's time, the beauty market could look very different."
M&S and Sephora enter partnership to bring a new beauty destination to the high street
'Sephora at M&S' launches in selected M&S stores and online in spring 2027, rolling out to 100 high street stores and retail parks. Online, M&S customers get a broader beauty range with home delivery and click and collect. The final brand lineup comes closer to launch, and M&S will keep investing in its own-label beauty.
M&S managing director of fashion, home and beauty John Lyttle says beauty has the potential to attract new customers and get existing ones shopping more often. Sephora UK MD Sarah Boyd stresses the 'deliberately local' approach that has driven its UK growth so far, and says the beauty advisors will come into the stores.
Digest takeSephora gets reach without building 100 leases itself. M&S gets a category it has struggled to grow (1.3% share, per George's column) and a traffic driver. The open question is how much of the range is exclusive and how the online side is run - M&S.com or a Sephora-powered storefront. Watch the lineup announcement.
'M&S' deal with Sephora looks like a boss move in a valuable market' (George MacDonald, opinion)
George notes the idea is almost 20 years old: a Retail Week story from 2008, when Sir Stuart Rose was defending M&S against Sir Philip Green's interest, floated 100 Sephora shop-in-shops. 'Is this the longest gestation ever for a story to come true?' a contact joked.
His read is that M&S is a more fleet-of-foot business now, and more open to partners - see the Brands at M&S tie-ups. The UK beauty market is worth over £5bn, and M&S's share is 1.3%. The queues outside new Sephora stores show the footfall opportunity. It's also a big move for Lyttle, the former Boohoo and Primark director who joined early last year. Food has been the M&S standout, and clothing was hurt by last year's cyberattack.
The competition: Superdrug is doing consistently well, John Lewis has gone big on beauty (K-beauty tie-ups, MyJL Beauty in its loyalty scheme), and Boots, with a brand as resonant as M&S, is experimenting with beauty-only shops and has just launched on TikTok Shop.
If beauty is in the eye of the beholder, retailers are doing all they can to perfect their looks for shoppers spoilt for choice and M&S's Sephora deal could be a boss move.- George MacDonald, Retail Week
Digest takeThe column's closing line is the verdict: 'If beauty is in the eye of the beholder, retailers are doing all they can to perfect their looks.' Note it is an opinion piece by the same editor who wrote the newsletter intro, so there is no dissent in it.
A $9bn sale of Boots could go ahead as early as next week. Per the Financial Times, Boots' owner Sycamore Partners is close to a deal with Wittington Investments, the Canadian branch of the Weston family, who previously owned Selfridges and sold it four years ago. Talks are advanced but no decision has been made.
Sycamore bought Boots last year with the acquisition of Walgreens Boots Alliance, and Stefano Pessina's family keeps a 44% holding. Talks with Australia's Sigma Healthcare and the Westons were held in June, and the Sigma talks ended. In the year to August 2025, revenue rose 3.2% to £7.5bn and pre-tax profit rose 25% to £337m, partly from reversed impairment charges. Former Currys boss Alex Baldock has just joined as chief executive.
Digest takeA new owner arriving just as a new CEO starts, and just as M&S brings Sephora to 100 stores, is the real setup for George's 'different beauty market in a year' line.
Aldi's annual results: the £1bn bet
George's frame: when times are tough, retailers choose between profit and market share. Aldi picked share, and Giles Hurley says volumes and customer numbers are driving the choice.
Turnover grew 5% in 2025 to £19bn on 'relentless focus on simple, everyday low prices'. Operating profit was £432.9m, broadly flat on £435.5m. Aldi has 1,092 stores, is targeting 1,500, and plans 30 openings in the next 10 weeks (Dumbarton, Newport and Willesden among them).
It has raised pay twice this year, spent £340m on price cuts so far, and says it spent £14bn with British suppliers in 2025, with 80% of sales coming from that group. Food inflation held at 1.3% in July and August, and the Food and Drink Federation expects it to peak at 6.4% in July 2027.
Digest takeThe newsletter says 'almost £1bn'; the article says £900m. Same thing - the headline number is rounded up in the editor's intro.
Aldi CEO on where he's investing as profits stand still
Hurley is unbothered by flat profit: 'Market share is ultimately an output of the volume that you sell, our volume is currently in growth.' Aldi's value share is 10.6% (Worldpanel), slightly down year on year, but it is the third-biggest grocer by shopper numbers (15.5 million) and one of the few growing volumes. Aldi says it has the lowest price inflation of any supermarket, with average unit price down year on year.
The £900m goes into stores (40 next year), and distribution, including the new Bardon DC, the UK's biggest supermarket warehouse. He says distribution is 'not the headline-grabbing part of retail' but a big determinant of cost and resilience. Long-term supplier agreements already cover £5bn, with a target of over 50% of domestic produce under such agreements by end 2027. The grocer will lower prices on 'dozens' of products before Christmas.
Hurley also questions loyalty schemes: 'How much of the value is perceived rather than real,' and says the traditional market has 'become more homogenised' with bigger ranges, more promotions and more loyalty mechanics. Aldi's loyalty proposition is the certainty of the cheapest basket.
Full-line more expensive supermarkets have tried to replicate what we do, but they can only imitate. They don't have the business model to reproduce our everyday low price proposition.- Giles Hurley, Aldi UK CEO
Digest takeHurley's argument is that complexity is the enemy and loyalty mechanics add it. That is a direct challenge to the loyalty-led model of the bigger grocers.
Shoppers are changing how they search for clothes
George's frame: AI-referred traffic now converts 42% better than paid search and email. Retailers need to be on top of generative engine optimisation (GEO), and customer reviews matter more too.
GEO: How can fashion retailers make it onto AI's runway?
Fashion searches are now things like 'something for an outdoor wedding in September, I'm 5'2", nothing strapless, under £150'. Louis Venter of MediaVision says a search-phrase analysis for a large retailer used to run to about 15,000 phrases and now reaches 750,000 - 50 times bigger without 50 times more shoppers, because one question is decomposed into many variants. Adobe research found AI-referred traffic converts 42% better than paid search and email, and fashion is the most popular sector for AI searches (Adobe's survey of 2,000 UK consumers). Most fashion shoppers still go straight to brands.
McKinsey's Biljana Cvetanovski recommends a diagnostic across the main AI search platforms: visibility, share of voice and sentiment against competitors. The article shows the gap in practice: Whistles was mentioned more than 9,000 times, Next a couple of hundred by ChatGPT in a recent study.
The practical advice: check AI crawlers are not blocked (some retailers are blocking them without realising), give every product page complete structured data (price, availability, reviews, delivery, returns, fabric, fit, sizing, care, occasions), and keep it consistent across marketplaces and social commerce. 'If your feed doesn't say linen, you're not included in that branch of the search.' The second lever is third-party mentions: roundups, blogger must-haves, creator partnerships and reviews. The third is retailer-owned AI: Zalando credited gains partly to the chat-based assistant it launched in 2024.
Digest takeThe most useful part is the sub-query point. An assistant checks each attribute independently, so missing attributes in the feed means you drop out of that branch. For a marketer this is the new version of keyword gaps, and it is a data-quality job as much as a content job. The 42% conversion figure is a quality-of-traffic stat from a small base, so don't read it as volume.
Reviews gain weight in AI search closer to purchase, Trustpilot data shows
Two Trustpilot-commissioned studies. Seer Interactive (800,000+ AI responses, ~2,000 US brands): review sites were 2% of sources cited for broad brand questions, rising to 24% for questions near purchase, such as whether a brand can be trusted. The second (411,000+ responses, 1,724 brands) shows AI also draws on product and store reviews. Most data is US, though Trustpilot says it sees a 'high correlation' with other markets.
Similarweb: generative AI platforms drew 9.5bn web visits a month in the year to May, up 70%, and search engines still draw five times as many but grew only 2%. Reviews and user-generated content made up 28.9% of ChatGPT's cited sources for US desktop users in May, and 19.9% on Google's AI Mode. In travel it was over half of ChatGPT citations, while in beauty 54.7% went to retail and ecommerce sites. Trustpilot's 'three Rs' for why models lean on reviews: relevance, recency, ranking (domain authority).
Caveats in the piece itself: Similarweb does not separate reviews from UGC, and the category is mostly Reddit, Wikipedia and GitHub. Trustpilot has a commercial interest in the finding.
Digest takeTreat this as a vendor-commissioned study. It still supports the GEO story above: reviews are an input retailers can influence, and the effect is strongest at the point of purchase.
This week's top stories
The newsletter's own list of Retail Week's lead pieces. Several are interviews and opinion pieces behind the paywall; all were read in full via the subscriber login.
How the Co-op is getting into shape after a turbulent period (Analysis)
Co-op's underlying operating loss widened to £45m in the six months to July 4 (from £32m). Sales rose 2.4%, market share rose to 13%, and membership rose 11% to 7.5 million. Interim CEO Kate Allum calls it 'a year of two halves', with trading improving through Q2 into H2, and says the group chose to invest in price, which hit profit. She sounds confident on staff morale after reports of 'fear and alienation' among colleagues, and on the Southern Co-op deal (170 stores, 70 funeral homes and three crematoria, run as a subsidiary pending CMA approval). The CMA deadline for remedies was September 22, and Allum says 'no surprises'.
Digest takeShare up, membership up, profit down - the same invest-in-share trade-off as Aldi, with the Co-op's members' prices as the weapon. The CMA outcome is the one to watch.
The last four governments have tried to fix the high street. What can Burnham learn from their failures? (Analysis)
Andy Burnham, now PM, announced a high street taskforce in early September. So far councils get new powers to refuse betting shops and make it harder to open vape shops, plus tougher penalties for illegal tobacco sales. Retail Week's experts say it is good intent but not enough without business rates reform. Andrew Busby: 'It's kind of like putting a sticking plaster on a broken leg.'
The history: the 2011 Portas Review (28 recommendations, including rates reform), Bill Grimsey's 2013 and 2018 reports, and the Timpson report. All still sit unimplemented. Graham Soult points to a Northumberland market town of 20,000 people with no out-of-town retail park as a success story (free parking, a station in the centre, a well-managed, almost-always-full shopping centre anchored by M&S) and to the absentee-landlord problem. High street rental auctions, introduced in November 2024, have 12 early-adopter councils and no completed auction yet, though the threat alone is nudging landlords to act. The ministry did not respond to requests for comment.
Digest takeThe pattern is the story: every review recommends rates reform and none gets it. The party conference week is the first test of whether this government is different.
Chart of the Week: Trust in grocers is at its lowest level in two years
EY's Retail Performance Index (10,000+ consumers, 200 brands) put grocery bottom of all retail sectors on how positively the median brand is viewed, and one of only two categories to decline since 2023. Konfidant's rolling survey of 2,000 consumers has net trust in supermarkets at 18% since July, up from 6% in November 2023 but the lowest since September 2024, and far below the 57% pandemic peak. EY-Parthenon's Silvia Rindone says supermarkets are visible because customers interact with them so often. Konfidant finds Lidl typically wins customers when trust in the wider sector drops.
Digest takeRetail Week's own line is that the public is wrong, as margins are tight and inflation is at its lowest since August 2024. The perception gap is the point, and it helps discounters like Aldi and Lidl.
Jade Holland Cooper on turning likes into a multimillion-pound brand (Interview)
Holland Cooper starts most days filming what she's wearing for her 884,000 Instagram followers. Sales hit £55m last year (up 34%) with a £9m pre-tax profit, funding a 70,000 sq ft head office near Cheltenham and a larger boutique on the same site. She says Instagram has been 'one of the most pivotal tools I've used' and she will not step back: 'I am the business.' She is expanding into new categories and partnerships, with Morgan cars mentioned, and says 'watching money just walk away because I wasn't making it' drove range expansion.
Digest takeA clean example of founder-led social commerce as the whole marketing function. It is also a key-person risk: the brand's growth engine is one person's feed.
'People need work experience - but they also need money' (Opinion, Charlotte Hardie)
Hardie admires the Sainsbury's KickStarter programme (10,000 young people) and Asda's expanded SEND internships, but says work experience cannot guarantee a job, and rising employment costs are shrinking opportunities. An industry cutting costs and announcing job losses while promoting work experience risks a PR problem: 'I admire their commitment to brightening up a dismally bleak youth employment landscape. But the industry needs to proceed with caution.'
Digest takePaired with the Asda piece below: one columnist warning about optics, one retailer making the case.
Kingfisher CEO: 'We are ready for the next generation of commerce' (Interview)
After interim results, CEO Thierry Garnier and CFO Bhavesh Mistry say B&Q big-ticket sales fell in Q2 (-8.1%): kitchens were fine, bathrooms were hurt by a range they were not happy with, and a bathroom refresh programme is under way. Heatwaves lifted air conditioning and fans while hurting outdoor and paint categories. About two-thirds of the business is repairs and maintenance and a third is trade, which Mistry says is resilient.
On AI: Kingfisher has a Google partnership starting 'in the coming weeks' at B&Q, so customers can have a Gemini-style conversation in the site search bar. It built its own agents years ago and saw a clear conversion improvement. Garnier: 'We are ready... to transact directly in Google Gemini. As soon as Google wants to launch this feature, we will be ready.' The interview also covers asks of government.
Digest takeThe agentic-checkout line is the one to note. Kingfisher is positioning for transactions inside Gemini, which ties directly to the GEO stories above.
'When London's West End succeeds, the UK does too' (Opinion, Dee Corsi)
The New West End Company CEO makes the pre-conference case: the district is about 3% of UK output, £17bn in tax and 8% of business rates. UK property taxes are about 7% of occupancy costs against a global average near 3%, and April's rates changes (including the £500,000 higher-rate multiplier) hit the West End disproportionately - businesses there are 10 times more likely to be affected. She calls for meaningful rates reform, action on crime, and a growth roadmap, 'Open for Growth'.
Digest takeA lobbying piece, and it reads like one. The numbers are the NWEC's own benchmark report.
Q&A: Clarendon's Beth Butterwick on the John Lewis art galleries tie-up (Interview)
Clarendon Fine Art is opening galleries in John Lewis shops. Butterwick says 'it's not a race to roll out', the aim is the right opportunity and making existing galleries work hard. Clarendon has about 84 land galleries and is on about 14 cruise ships (Carnival, Cunard). She frames it as John Lewis bringing in expertise where it lacks it, as with Waterstones for books and Jamie Oliver Cookery schools, and says art 'doesn't sell itself off a wall'.
Digest takeJohn Lewis's concession model keeps widening: books, cookery, now art. The aim is dwell time that a pure retail floor does not give.
'Supported internships are good for young people - and for business' (Opinion, James Goodman, Asda)
Asda's chief people officer backs the government's push on young people not in education, employment or training, and calls for supported internships to expand. Fewer than 5% of people with a learning disability in England and Scotland get paid work after education, against about 80% of their peers. Supported internships give workplace experience, practical skills and confidence.
Digest takeThis is the practical side of the Hardie column above.
More headlines
The newsletter's short list. Each one was opened and read in full.
Nike's quarterly sales fell 4% to $11.2bn, below consensus, and net income fell 2%. China sales dropped 22% to $1.18bn, EMEA fell 5% to $3.18bn, North America rose 2% to $5.13bn. A new operating-model overhaul (supply chain, more job cuts) is expected to save about $2.5bn by the end of fiscal 2031. CEO Elliot Hill, back since 2024, says more work is needed in sportswear, Jordan and Greater China, and the 'sports offence' model targets performance products like running shoes.
Digest takeThe China fall is the number that matters here.
Poundland management buy-out team drafts in Interpath
Retail veteran Andy Bond has teamed with Poundland management on a buy-out bid, and per The Telegraph they've hired Interpath. Owner Gordon Brothers unexpectedly put the chain up for sale in August (it bought it for £1 last summer), which led insurers to stop offering new cover to suppliers. The ask is £30m, which the management offer is unlikely to meet, though former owner Pepco, which keeps a minority stake, is said to support a deal. The team is in advanced talks to combine with another, unnamed bidder. Poundland employs about 12,000 people.
Digest takeThe £30m price tag against a £1 purchase a year ago tells you how distressed this is.
Oxford Street pedestrianisation given the go-ahead for next month
From October 26, buses, bikes, taxis and other vehicles are barred from the stretch between Orchard Street and Great Portland Street, nearly a kilometre. Sadiq Khan says it's timed 'just in time for the busy Christmas shopping period'. Westminster Council says there are 'a lot of unanswered questions', fearing traffic diverted onto small streets, and says Khan is rushing preparations.
Digest takeStarting five weeks before Christmas is a risk for both sides.
Liz McMeikan, chair of Vimto-owner Nichols, takes over from Steve Johnson in 2027. She has been Nichols chair since 2023, is senior independent director of Custodian REIT, and has held marketing and sales roles at Colgate-Palmolive and Tesco. DFS has recently announced rising profits and a record market share.
Store gallery: Ted Baker returns to bricks and mortar with a new London concept
'Ted Baker Tailored' opens October 2 on Fenchurch Street in the City, the brand's first standalone UK store. It focuses on cut suiting and menswear essentials rooted in British tailoring. Owner Authentic's Henry Stupp calls it a milestone in its home market.
Landsec to buy Gateshead's Metrocentre in £500m deal
Landsec buys 100% of the Metrocentre for £516m, funded by an equity issue, which gives it three of the UK's top 10 shopping centres and eight of the top 30. The centre draws about 16 million visitors a year, £650m in retail sales, 282 stores and 95% occupancy. Landsec CEO Mark Allan calls major retail destinations his 'highest conviction call' as brands go for 'fewer, bigger, better stores'.
Digest takeThe headline says £500m, the article £516m. A property buyer betting on scale as brands consolidate stores is the opposite of the high street reviews above.
Morrisons launches new click-and-collect lockers to up availability and cut waiting times
Morrisons is piloting StrongPoint multi-temperature lockers at its Skipton store, which it calls a first for the company. Lockers extend collection hours by two hours a day, remove the need to park in a bay and wait, and hold up to three bags (large) or one to two chilled or frozen bags. Orders are left in paper bags instead of loose shopping. All click-and-collect orders at Skipton go through lockers, and real-time support covers age-restricted items. Online director Charlotte Exell says it is designed to be quick, convenient and flexible.
Digest takeLockers cut store labour and wait times at once. If the pilot works, expect it across the estate.
Pick of the week: AI search is now a retail channel, and it needs its own plan
Three pieces in this issue say the same thing from different sides. Adobe's data in the GEO story says AI-referred traffic converts 42% better than paid search and email. Trustpilot and Similarweb show reviews and user-generated content are the biggest cited source for ChatGPT (28.9%) and closer to purchase carry more weight in answers. And Kingfisher says it is ready to take payment inside Gemini as soon as Google switches it on, with its own Gemini-style chat arriving in B&Q search in weeks.
What to do with it: check AI crawlers aren't blocked, fill product feeds with every attribute an assistant could ask about (fabric, fit, occasion), push reviews, and build mentions on third-party sites. The 750,000-phrase figure shows why: one shopper question becomes dozens of attribute searches, and a missing attribute drops you from that branch.
Runner-up: M&S x Sephora and the Boots sale, which together reshape UK beauty by next year.
