FDBusiness.com

UK Food and Grocery Forecast to Grow by 15% by 2022

 Breaking News
  • Firmenich Launches Advanced Natural Flavour Solutions For High Protein Beverages Firmenich, the world’s largest privately-owned company in the flavour and fragrance industry, has officially launched its Protein Shield Flavors, a new line of natural flavour solutions aimed to help developers address the challenges they face when creating beverage products with high protein content. “These natural solutions confirm Firmenich’s deep commitment to advancing health and wellness,” says Chris [...]...
  • JDE Invests Heavily in Kenco Coffee Company Rebrand Jacobs Douwe Egberts (JDE) Professional has unveiled a fresh, new brand positioning for Kenco The Coffee Company, complete with a bold new logo and pack design. The new design brings to life the heritage, passion and expertise behind the well-loved brand, helping to further boost value and volume growth across the sector. The Kenco brand is [...]...
  • ABP Food Group in £22 Million Renewable Energy Project A £22 million investment by ABP Food Group’s renewable division in a green energy plant will produce enough sustainable energy to power the equivalent of 12,000 homes. ABP’s renewables division, Olleco, has just opened the new 15 MW Anaerobic Digestion facility in Aylesbury, Buckinghamshire. The ABP Food Group facility is located adjacent to the Arla dairy, [...]...
  • How Steel Packaging Contributes to Saving Food A new film from APEAL, the Association of European Producers of Steel for Packaging, has been launched to highlight the unique preservation qualities of steel packaging. Having recently welcomed the European Parliament’s (EP) initiative report – Resource efficiency: reducing food waste, improving food safety – APEAL is increasing its own efforts to drive improvements in managing food waste [...]...
  • New Website Brings Easy Access to Food Processing Equipment Interfood Technology has launched a new website to provide an easy-to-use resource for sourcing the latest in food technology and processing equipment. The site has been introduced to coincide with the company’s relocation to new, larger premises and marks another significant investment in Interfood’s development. The main reasons behind the complete revamp from the company’s previous [...]...

UK Food and Grocery Forecast to Grow by 15% by 2022

UK Food and Grocery Forecast to Grow by 15% by 2022
June 07
12:05 2017

The UK food and grocery market is forecast to grow by 15% between now and 2022, giving it a value of £213 billion, according to the latest forecasts released today by grocery research organisation IGD. IGD is predicting growth across all the major grocery channels, with the discounters set to put in a particularly strong performance driven by ambitious store opening programmes, new store formats and range investment. By 2022, IGD is forecasting that one in every £7 will be spent at a discounter, up from one in every £9 now.

Other key findings from the new data include:

* Online is set to remain the fastest-growing channel, although perhaps not at the same pace as in previous years, as retailers also look to drive growth through their larger store and convenience formats

* Both discount and convenience have a more optimistic outlook than previous years and are forecast to grow the second and third fastest respectively of all the grocery channels

* There’s a more positive outlook than before for both supermarkets and hypermarkets to 2022, driven by a combination of inflation and investment in the big store experience for shoppers.

2017 value
(£bn)
2022 value
(£bn)
Change in value
%
2017-22
Hypermarkets 16.2 16.3 +1.0
Supermarkets 86.0 91.1 +5.9
Convenience 40.0 47.1 +17.7
Discounters* 20.1 30.1 +49.8
Online 10.4 16.0 +53.8
Other retailers** 11.8 12.2 +3.6
Total 184.5 212.9 +15.4

Channels may not exactly sum to market total because of numerical rounding in this table
*’Discounters’ includes all sales of Aldi and Lidl, and grocery-only sales of principal variety discounters, including Wilkinson
** ‘Other retailers’ includes specialist food and drink retailers, CTNs (confectionery, tobacco and news), food sales from mainly non-food retailers and street markets

Joanne Denney-Finch, IGD chief executive, says: “Our market growth figures to 2022 are higher than last year’s forecast, primarily driven by resurgent inflation following three years of sustained deflation across UK food and grocery. All channels are set to see growth, but we anticipate that encouraging shoppers to trade up or buy more will remain as competitive as it always has been – and potentially even more so, given the challenging economic outlook.

“There’s a revolution underway in food and grocery, in terms of what, how and where shoppers do their shopping. On average, shoppers say they use around 12 different stores every month – and in the future, we will have an even greater choice in what, where and how we buy our food. We’ll be more spontaneous but also better planned. We’ll be experimental, eager for new products and experiences. But we’ll also have perennial favourites, staples that we’ll buy on subscription. A quarter (24%) of British shoppers say in the next two to three years, it’s likely they will use an online subscription service to get their staples delivered.”

She adds: “So the pace of change will be rapid – and this will present huge challenges and opportunities for the industry.”

Driving the discounters

On the discounters, Joanne Denney-Finch says: “Discounters will contribute most to the cash growth in the market over the next five years, as they continue to open new stores and keep improving the shopper experience with new additions such as food-to-go, self-checkouts and larger stores. Four in five (79%) shoppers say they have visited a variety discounter for some of their grocery shopping in the last month, while two-thirds (62%) say they used a food discounter. And almost three-quarters (70%) of food discount shoppers say the quality of the products they buy from these stores has improved over the last couple of years.”

Online ‘natives’

Joanne Denney-Finch says: “Online will remain the fastest-growing channel over the next five years, but we have lowered our forecast for this part of the market from 2016, as many retailers have also started to refocus their efforts on the in-store experience, which will create additional competition for online.

“However, the size of the prize in online still remains huge. We expect to see the ‘digital native’ – those people who have grown up using technology in many aspects of their lives – help to sustain growth in the future, as they carry on shopping online for groceries and potentially convert others to do the same. In the last month, 40% of all British shoppers say they have bought some of their food and groceries online, but looking ahead to the next two to three years, that figure rises to 60% of shoppers who say it’s likely they will shop online.”

Going large

Looking at supermarkets and hypermarkets, Joanne Denney-Finch says: “Larger format stores may no longer be the biggest engines of growth in UK grocery, but nevertheless they remain the place where most people shop for food and groceries. Nearly every shopper in Britain (98%) claims to use a supermarket or a hypermarket for some of their grocery shopping every month, citing the convenience of having everything under one roof (84%) and wider choice (81%).

“Services that shoppers would like to see introduced at larger stores include non-food concessions, local independent food stores and an ‘everyday’ aisle near the front of the store, to enable a speedier shopping experience. We’re already seeing many larger stores move in this direction and expect this to continue over the next few years.”

At your convenience

Joanne Denney-Finch adds: “With nine out of 10 shoppers claiming to have visited a convenience store in the last month, it’s not hard to see why we believe this will remain the third-fastest growing grocery channel. Small stores have an enduring appeal and there are some clear opportunities for them to engage the younger generation, with one in five (19%) 18-25-year-olds mainly shopping in convenience stores, which is more than double the number of those aged 26 and over (7%). There’s also a huge opportunity for food-to-go, with more than eight in 10 (83%) c-store shoppers saying they could be encouraged to buy more food-to-go at their main convenience store.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 19, 2017PMA Fresh Summit 2017
  • October 21, 2017Food & Nutrition Conference & Expo 2017
  • October 22, 2017Serbotel
  • October 22, 2017Natexpo
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements