The UK food and grocery market is set to be worth £206bn by 2018, with convenience, online and discounters being the fastest-growing parts of the market, according to the latest research from IGD. If the forecast is accurate the market would grow by 21% from its current value of £170bn.
While superstores and hypermarkets generate the most sales of any type of grocery format, they will grow at a considerably slower rate in comparison to the top three formats, said Joanne Denney-Finch, IGD’s chief executive: “The ‘hot three’ areas of online, convenience and food discounters are the ones to watch – collectively accounting for more than £3 out of every £4 of growth in UK grocery over the next five years.
“Both online and convenience retailing are reaping the rewards of our changing lifestyles. With more of us owning smartphones and tablets, online grocery shopping is becoming more popular. Retailers are also introducing more convenient and flexible services, such as temperature controlled ‘click & collect’ lockers for shoppers to pick up their groceries at a time and place that suits them.
“Convenience stores are also benefiting from a cultural shift towards shopping ‘little and often’. They are increasingly providing products tailored to specific locations rather than a ‘one size fits all’ approach. With their sales set to rise by over £10bn over the next five years, we’re forecasting convenience to bring in the biggest cash growth of any type of grocery retailing between 2013 and 2018.
“We also expect food discounters, like Aldi and Lidl, to continue to do well and build on their recent stellar performance. They have improved shopper perceptions by effectively communicating the quality and value for money of their products, while also expanding the range of items they sell to help shoppers complete more of their weekly shop there. Nearly a third (32%) of shoppers tell us they will use food discounters more in the year ahead compared to almost a quarter (24%) in September 2010.”