Observed Signal · May 21, 2026 · Market Trend · Source: Digiday · Impact: 3/5 · Sentiment: Negative
UK Brands Raise Retail Media Spend; 'Disconnected Commerce' Slows Growth
UK brands are increasing investment in retail media, with industry estimates showing retail media grew 17.5% year-on-year in 2025 to £3.7 billion, representing just under 10% of the UK’s £40 billion digital ad market. While grocers and marketplaces (notably Amazon) are expanding video and upper-funnel ad formats, many UK campaigns remain focused on traditional shopper-marketing activations and in-store conversions. Industry executives point to inconsistent measurement, limited self-serve tools, and organisational fragmentation between trade/sales and marketing teams — described as “disconnected commerce” — as key barriers to shifting more upper-funnel budgets into retail media. Retailers such as Tesco have launched video inventory and report rising campaign volumes, while Amazon continues to dominate spend share in the sector.
Shows continued growth of retail media in the U.K. and highlights structural barriers (measurement, buying tools, organisational fragmentation) that will influence how and whether brands shift upper‑funnel budgets into retail media.
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Key Takeaways & Evidence Grounding
- Retail media grew 17.5% year‑on‑year in 2025 to £3.7 billion in the U.K., about 10% of the £40 billion U.K. digital ad market.
- KPMG estimates there are at least 28 retail media networks operating in the U.K.; the U.S. has 250+ networks.
- Amazon is estimated to hold a 73% share of retail media spending in the U.K.
- Pilgrim’s Europe is running a Richmond brand campaign across Tesco, Asda, Sainsbury’s and Morrisons retail media networks.
- Tesco Media added video ad formats in April, claims reach of 12 million shoppers, ran ~2,500 campaigns last year (24% YoY increase) and reported 91% of brands increased spend with the network.
Connected Companies & Entities
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