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