The value of the global food retail market, including supermarkets and hypermarkets, is set to reach $8.5 trillion by 2020, according to a new report by Persistence Market Research.
The report, Global Market Study on Food Retail: Supermarkets/hypermarkets Segment To Witness Highest Growth by 2020, states that the market is set to grow at a CAGR of 6.1 per cent per annum from 2014 to the end of the decade.
The US-based research firm valued the market at $5.64 trillion in 2013.
The growth will be led by the emerging middle class in countries such as China and India, with Persistence saying that around 1.5 billion households will be in the middle-class category by 2020, up from 1.2 billion households currently.
'Increasing customer preference towards private-label brands, rising consumer spending on food items and increasing supermarket shopping culture are some of the major drivers of the market,' the study reads.
'Market share of independent and specialist retailers is expected to decline on account of rapid growth of other segments such as supermarkets/hypermarkets. The industry is facing challenges in the form of supply chain ineffectiveness and threat from unorganized players. However, the burgeoning middle-class population and increasing online retail shopping are offsetting these challenges and presenting growth opportunities for the industry.'
It predicts that the impact of expanding private-label brands 'is expected to be high in the short and medium terms, and medium in the long term'. However, it added that 'private-label brands are expected to lose their share towards the end of the decade due to the expected recovery in the European economy'.
[CORRECTION: Headline should read $8.5 trillion, not $8.5 billion as previously stated]
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