uk grocery market growth
Grocers should define strategies that determine where they want to play and choose enabling investments in areas such as fulfillment, last mile, technology, and talent. Over the next few years, a continued focus on neighbourhood locations underpinned by the higher levels of working from home and suburban living will boost the convenience channel. Based on Europanel data. All data is based on the value of items being purchased by these consumers. Operators will need to offer distinct benefits to attract customers. "Though discount will naturally benefit from shoppers desire to save money, growth will be held in check by increasing competitiveness from other channels. Technology is in the process of disrupting several parts of the online value chain, from user experience to order preparation to the last mile. 2022 Copyright Grocery Gazette. For countries still catching up, we assume they will either follow the development path of France and the United Kingdom (moderate) or the Netherlands (aggressive), adjusted for market fundamentals (customer adoption, latent demand, economic viability, and the grocery markets characteristics). This will be driven by more households looking to make savings and both Aldi and Lidl continuing to expand their store networks with ambitious opening targets for 2025 (1,200 and 1,100, respectively). REUTERS/Peter Nicholls. Drag the timeline beneath the grey pointer to change the period that the data corresponds to. Neutral customers who want to keep purchasing at similar levels are not included. The convenience channel outperformed supermarkets, with 3.7% growth in sales in the last four weeks, now accounting for 24% of all FMCG sales. Watkins added: Shoppers are becoming more considered in what they buy and the current challenge for supermarkets is to improve volume growth by getting more items into the shopping basket.
Scroll to see the list of stores, and select/deselect the stores to show/hide them on the graph. 1 This category only includes cookies that ensures basic functionalities and security features of the website. 5. Discount will be the fastest growing channel over the five-year period, with a forecasted growth of 23.9% to 7.1bn.
Kantar Worldpanel does not endorse any other interpretation of our data. The forecasts use the observed prepandemic development rates as the baseline. All rights reserved. However, other factors could shape the markets development, including new regulations (for example, the current freeze on new dark stores in Amsterdam) that could make online grocery less attractive to investors. What are the sources of growth that will determine whether online tracks more closely with the conservative or aggressive scenarios in a given country? All data is based on the value of items being purchased by these consumers. Net intent is the share of customers who indicated they want to increase use of online services minus the percentage of customers who said they want to decrease or stop the use of online services. Fueled by evolving customer expectations, increased competition, and technological advancements, online could account for up to 18 to 30 percent of the food-at-home market in some leading European countries. Kantar is the world leader in consumer knowledge and insights based on continuous consumer panels.
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Kantar Worldpanel only supports data published in the context in which it was originally presented.
This website uses cookies to improve your experience. Activating the padlock will lock the time period between markers, allowing both to be dragged as a unit. We also use third-party cookies that help us analyze and understand how you use this website. By using this website you are consenting to the use of cookies. Reporting by James Davey; editing by David Evans, German consumer group files lawsuit against Tesla over privacy concerns, CO2 ads, Average annual UK food bill set to rise 454 pounds as inflation soars, Made.com slashes outlook on Britain's waning big ticket demand, General Motors to produce 2024 Chevrolet Blazer EV at Ramos Arizpe in Mexico, Fans, hoses and air con - heatwave-hit Britons seek relief, See here for a complete list of exchanges and delays, Market forecast to grow 8.1% to 229.1 bln stg by 2026. McKinsey_Website_Accessibility@mckinsey.com. A McKinsey survey of European consumers reveals most respondents plan to use online grocery services almost equally often as in 2021 (a net intent of 1 percent).
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The online share of grocery sales remained stable. Longer term, the grocery sector will remain bigger than our pre-pandemic forecasts, primarily driven by elevated levels of home-working benefitting stores in suburban areas; the adoption of digital technologies in-store which will alter how and where people shop, and fewer out-of-home eateries operating. Larger stores, such as supermarkets (+6.2%, to 5.7 billion) and hypermarkets (+5.2%, to 0.9 billion) are also set to grow in terms of value sales, although they will see their market share decline. If that were to happen, physical retail would lose a significant part of its advantage, and we could see new consumer segmentssuch as value seekersshifting online and creating a boom for the online grocery market.
Kantar only supports data published in the context in which it was originally presented and does not endorse any other interpretation of the data. All content is owned by IGD. UK retail food and grocery market growth to slow sharply in the short term, according to latest IGD market forecasts.
Maxime Delacour, Senior Retail Analyst and specialist in the discounter channel, explains: Discounters are a natural destination for households looking to economise and the key players have extensive expansion plans. Online growth will have significant implications for stores, so offline incumbents with existing store networks also need to rethink their omnichannel strategies. In leading countries, online grocery could make up 18 to 30 percent of the food-at-home market Select/deselect the stores from the filter panel to show/hide them on the graph.
If you would like information about this content we will be happy to work with you. The forecasts use the observed prepandemic development rates as the baseline.
This field is for validation purposes and should be left unchanged. For instant delivery, our analysis considers the share of population living in densely populated areas, indications that consumers will shift channels, and the current level of investment for this business model. Others will get left behind or stay the same (on the downward part of the K). With online pure players disrupting markets, traditional grocery retailers should now determine which value propositions to focus on, define a scalable operating model, and consider partnerships to complement their historic strengths. Simon Wainwright, Director of Global Insight at IGD, explains: The significant dip were forecasting in the short term is to be expected; many households will be under increased pressures, making shoppers more value conscious. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Yonghui Group includes Yonghui, Bravo YH. When determining a new strategy, grocers decisions could include whether to build their own end-to-end offerings or partner with third parties to address specific parts of the value chain. The researcher expects the convenience channel to grow 12.5% to 50 billion pounds. These models also helped grocers reach customer groups beyond urban centers in suburban areas, small cities, and even rural areas. Commercial: 07854 369 791, Four Cavendish Square, A combination of new stores, the need for many shoppers to economise and the increase of food and grocery within variety discounters will fuel this channels growth, but it will slow through the forecast period.
In terms of categories, there was a strong increase in sales of pet care products (up 11.9%), soft drinks (11.2%), and health, beauty and baby care products (10.4%). This sharp decline will be followed by a period of modest recovery, that will see the UK retail food and grocery market grow by 8.1% to 229.1bn over 2021-2026. The Grocery Market Share data is derived from Kantar Worldpanel research covering the household grocery purchasing habits of 2.500 demographically representative households in Taiwan island wide for their consumption at home. Simon Mayhew, Head of Online Retail Insight at IGD, explains: Quick commerce has exploded as a result of the pandemic and is now a channel in its own right with a current estimated current value of 1.4bn. By continuing to use this website you agree to the use of these technologies.
You also have the option to opt-out of these cookies. The reopening of the hospitality sector, despite being from a very low base, will also divert some spend away from retail in the short term. Our Standards: The Thomson Reuters Trust Principles. The results vary significantly by country, however; customers plan to shop more online in advanced online markets such as the United Kingdom (a net intent of +5 percent), the Netherlands (+4 percent), and France (+2 percent). By David Shrimpton The coming years will present new opportunities. UK grocery sales have returned to growth as 20% of Brits say they will spend more over the jubilee bank holiday weekend. Nielsen said that with household budgets squeezed, consumers are shopping around for the best prices. Click here to sign up to Grocery Gazettes free daily email newsletter, Your email address will not be published. 5 Wainwright noted that longer term the UK grocery sector will remain bigger than IGD's pre-pandemic forecasts, primarily driven by elevated levels of home-working benefiting stores in suburban areas, the adoption of digital technologies in-store which will alter how and where people shop, and fewer out-of-home eateries.
These cookies will be stored in your browser only with your consent. All data is based on the value of items being purchased by these consumers. Key highlights from the channel forecasts: Online will slow after the 2020 growth, as some shoppers, particularly the older demographic, return to stores. Multichannel retailers will need to reduce fulfilment costs and nurture loyalty to protect margins as the online channel takes a greater share of the sales mix., Rachel Sibson, Retail Analyst and author of a new series of reports examining the landscape of the quick commerce channel, adds: Quick commerce is an exciting, fast-paced channel which presents a huge opportunity for suppliers, retailers, aggregators and pure plays. Copyright 2022. expected to be fastest-growing grocery channel in that period as the cost-of-living crisis replaces Covid as the key challenge to the sector. READ MORE: Discounters Aldi and Lidl continue to grow as grocery inflation hits 4.3%. Wu-Mart Group includes Wu-Mart, Merry Mart. Kantars Grocery Market Share data is derived from Worldpanels research covering the household grocery purchasing habits of 5,000 demographically representative households in Ireland. Enjoy the most important storiesfrom the world of European grocery retail, curatedfor you by our team of experts every week. Kantars Grocery Market Share data is derived from Worldpanels research covering the household grocery purchasing habits of 12,000 demographically representative households in Spain. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. For countries still catching up, we assume they will either follow the development path of France and the United Kingdom (moderate) or the Netherlands (aggressive), adjusted for market fundamentals (customer adoption, latent demand, economic viability, and the grocery markets characteristics). 31st May 2022. All data is based on the value of items being purchased by these consumers. 3 Some households will begin to grow in prosperity (on the upward part of the K) once more. Though discount will naturally benefit from shoppers desire to save money, growth will be held in check by increasing competitiveness from other channels..
Figures from data analyst NielsenIQ released today found UK grocery sales grew by 0.6% over the past four weeks, the first positive growth since Christmas. Our annual market estimate is based on our ShopperVista data which shows that 13% of UK shoppers already use quick commerce, but there is a further 22% of shoppers interested, who are still to play for.. The reopening of city centres and transport locations will also add to short term growth. The store network can also be a source of differentiation against pure players as incumbents manage their omnichannel offerings. Despite the overall increase, volume sales at the grocery multiples fell by 6%, which NielsenIQ said reflected the squeeze on household budgets. Our analysts spend hundreds of hours poring over statistics and trendsso you dont have to. The shift also reordered the competitive landscape as new players flooded the market, often backed by large investors.
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Curious about what drives these trends?
One of the major effects of the COVID-19 pandemic has been a boost to online grocery. Kantar only supports data published in the context in which it was originally presented and does not endorse any other interpretation of the data.
The convenience sector is now focusing on how it retains its current 21% share of the grocery market, by focusing on neighbourhood stores and extending ranges to meet local demand.
Sign up to our daily newsletter to get all the latest retail tech news and insights direct to your inbox. 3. Scale and excellence in all business areas are prerequisites, so players must be prepared to undertake targeted transformations to turn around unprofitable businesses. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. IGD forecast the recovery will be fuelled by rising employment levels, growing consumer confidence, economic recovery and the new channels and opportunities created by the disruption of COVID-19, such as quick commerce.
This is behind the 7% increase in store visits, which is driving sales growth in bricks-and-mortar sales, up by 2%. Maximising growth will be down to stores inspiring shoppers with an improved choice of relevant products and developing opportunities around events and occasions.. Consumers migrated rapidly to online channels, whose greater convenience altered consumer behaviors and expectations over time. We'll email you when new articles are published on this topic.
Incumbent retailers that are not currently playing in online might be at risk of losing market share, especially in urban areas.
The supermarkets channel is forecast to grow 0.9% to 91.8 billion, while the hypermarkets channel is seen falling 2.3% to 16 billion pounds. The online market is still in the process of taking shape. Now, offerings have expanded to address more shopping missions (such as top-up shopping) and customer segments (such as younger and elder generations). All data is based on the value of items being purchased by these consumers. IGD said the discount channel growth would be higher, were it not for competitive supermarket pricing strategies and the risk of sales cannibalisation where discounter catchment overlaps. SPAR Group includes Jia Rong, Jia Jia Yue, Meet All, Huaguan SPAR, Bai Xin, Jia Hui.
Sign up to our daily newsletter to get all the latest grocery news and insights direct to your inbox. It forecast online will grow 21.4% to 26.9 billion pounds, driven by new capacity and the new quick commerce sub-channel. The growth will be driven primarily by inflation this year, with a predicted value increase of 3.5%, but this is expected to moderate from 2023 onwards. This will be driven by a combination of households looking to save money, discount retailers expanding their store networks, and variety discounters sharpening their grocery offer. Nick Gladding, Senior Retail Analyst at IGD, explains the longer-term implication: Shoppers will need to justify the time and travel to large stores as other, more convenient options become increasingly available to them. For example, advanced personalization could further increase order size for large-basket delivery, and automation has the potential to transform the cost model for order preparation and last mile. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. by 2030 in our aggressive scenario (exhibit).
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Its High Definition Inspiration(TM) approach combines market monitoring, advanced analytics and tailored market research solutions that inspire successful actions by its clients. That said, theres an opportunity for the sector to engage with the many shoppers that built up savings during the pandemic and contributed to the estimated 150bn* savings pot, by focusing on quality and convenience as the K-shaped recovery* takes hold. This includes devising the most suitable approach, which could combine new capabilities and ways of working (for example, data-driven decision making and agile product development) with historic strengths (such as sourcing or a dense store network).
Retailers that take decisive action and make strategic investments today will be well positioned to carve out a winning and sustainable market position in the future.
All rights reserved. Purchase this report or a membership to unlock our data for this industry. Will supermarkets move to more private labels? Venture capital (VC) funds and consumer-packaged-goods (CPG) companies seeking to develop their own direct-to-consumer offering have joined the fray. The size of the opportunity is significant and has the potential to grow to 3.3bn. However, new capacity and the new quick commerce channel which sees food and grocery delivered in less than one hour and often sub-30 minutes will see online become the fastest-growing channel post-2024. If you use or refer to any content in this press release, please credit IGD. The next S-curve of growth: Online grocery to 2030. Online has extended its reach to new customer segments. While online pure players have advantagesthey are more flexible, agile, and not bound to parity with the offline offeringincumbent players can benefit from scale and existing brand and infrastructure, among other attributes. Patrick Mitchell-Fox, Senior Business Analyst, IGD comments: The historic significance of impulse has declined and now top-up shopping is more dominant for the convenience sector: basket sizes have become much larger with a wider range of goods. With over 60 years' experience, a team of 3,500, and services covering 60 countries directly or through partners, Kantar helps brands grow in fields as diverse as FMCG, impulse products, fashion, baby, telecommunications and entertainment, among many others. It is mandatory to procure user consent prior to running these cookies on your website. Click 'Compare dates' to reveal a second marker, and drag this marker to display data from two distinct time periods. in Industry News
Subscribed to {PRACTICE_NAME} email alerts. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. It said the 3.7% increase in convenience stores highlighted the change in consumer behaviour, as consumers spend more on-the-go, at work or socialising and began reverting to shopping little and more often. Remember that if you are on a mobile this can be added to your homescreen for easy future access. IBISWorld's Industry Report has got you covered. 
