Value of UK food and groceries to soar to £200bn
The IGD research also reveals the fastest growing areas of the market are online sales, food discounters and convenience.
The value of online sales was predicted to reach £14.6bn, up 123% by 2018, while convenience was predicted to total £42.2bn, up by 30% and discounters to realise £18.6bn, up by 96%, over the same period.
While superstores and hypermarkets generate the most sales of any type of grocery format, they will grow at a significantly slower rate compared with the top three formats, according to the research. They were predicted to rise from their current value of £74.1bn to £80.1bn – a rise of 8% over the five-year period.
‘Hot three’ areas
The IGD said the ‘hot three’ areas of online, convenience and food discounters together accounted for more than £3 out of every £4 of growth in UK grocery over the next five years.
Joanne Denney-Finch, chief executive, IGD, said online and convenience retailing were reaping the rewards of changing lifestyles.
“With more of us owning smartphones and tablets, online grocery shopping is becoming more popular,” said Denney-Finch. “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.”
Shopping ‘little and often’
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,” she said. “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.”
Food discounters – such as Aldi and Lidl – will continue to do well, predicted the IGD. They have improved shopper perceptions by communicating effectively the quality and value for money of their products, said Denney-Finch.
At the same time, they have expanded the range of items they sell to help shoppers complete more of their weekly shop at their stores.
Nearly a third (32%) of shoppers surveyed intended to use food discounters more in the year ahead compared with less than a quarter in September 2010.
Grocery market in numbers
- 206bn – value in pounds of UK food and groceries market by 2018
- 14.6bn – value of online sales
- 42.2bn – value of convenience sales
- 18.6bn – value of food discount sales
- +3 – out of every £4 of growth in grocery products will be devoted to online, convenience and food discounters
Source: IGD
