UK Food And Grocery Market To Grow By £28.2bn By 2023
The UK food and grocery market is expected to grow by around 14.8% between now and 2023, giving it a value of £218.5 billion, according to research by IGD.
This represents growth of around £28.2 billion, the research firm said, with online and discount retailing expected to account for more than half the growth.
IGD anticipates £3 in every £10 of growth over the next five years will come from discounters, which are expected to make the biggest contribution to the cash growth of the industry, about 37%.
The outlook for larger stores has also improved, IGD said, with investments in price, range and the customer experience helping retailers to defend their market share better.
“Food discounters are benefiting from targeted investment in key categories such as fresh produce, meat and bakery, along with improvements to the in-store environment and facilities, making stores much more comparable to supermarkets,” said Simon Wainwright, director of insight at IGD.
“Variety discounters will see strong growth from investment in more store openings, but we will see this balance out with closures elsewhere. Opportunities for these retailers lie in developing the food-for-now and impulse grocery offers, taking a more flexible approach to formats, offering more unique and exciting products, and delivering compelling seasonal events.”
Wainwright added that with eight out of ten (77%) of shoppers saying they “buy food from variety discounters every month, understanding shopper motivations and behaviour in this channel has never been more important.”
IGD added that the convenience channel will deliver the second biggest gain in sales as it meets the growing demand for smaller and more frequent shopping trips.
In addition, supermarkets and hypermarkets will experience some growth, following investments to improve the shopper experience.
“Maintaining appeal to shoppers will be a continuing challenge as shoppers migrate to more smaller and easier-to-shop formats and online sales evolve at pace,” said Wainwright.
“Underused hypermarket grocery space is expected to be converted for use by concessions and we anticipate this helping to strengthen the destination status of large stores and provide new reasons for shoppers to visit. Combining the grocery space and refining the non-food offer also should make stores easier and faster to shop for smaller basket shoppers.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.