Grocery sales predicted to hit £197bn by 2021: IGD
The IGD predicted a stabilisation of sales at larger stores over the next five years, following a challenging few years. However, online would remain the fastest-growing format, followed by the discounters, it reported.
The latest report predicted that hypermarkets and supermarkets would see a stabilisation in sales by 2021, as large stores evolved to reflect the changing needs of shoppers.
Online was forecast to grow by 68% over the next five years to £17.6bn, while by 2021, discounters would be worth £24.9bn, compared with £17.9bn currently, claimed the IGD.
It also predicted that convenience stores would remain the third fastest-growing sector, although expansion was expected to slow down.
“It has been a challenging time for food and grocery retailers, with an extremely competitive market dampened by unprecedented food and drink deflation,” said IGD chief executive Joanne Denney-Finch.
‘Modest recovery’
“Yet, we believe there will be a modest recovery across food and grocery over the next five years, as inflation picks up and shoppers start to benefit from the investments that retailers are making in their stores and ranges.”
Denney-Finch also predicted that online was set to remain the fastest-growing grocery channel, driven by the growth of click and collect services, and new players entering the online grocery arena.
“A record 29% of British grocery shoppers say they shopped online for their groceries in the last month against 20% in 2010,” she said.
Meanwhile, UK shoppers have enjoyed another month of discounted popular supermarket items, according to grocery comparison website mySupermarket.co.uk. It revealed the cost of a basket of 35 popular products had dropped in price again – to £82.59 in May 2016.
This set yet another lowest price record since it launched its groceries tracker in December 2014. The basket of products – including carrots and onions – had dropped in price by almost 20% compared with April.
‘British shoppers better off’
“British shoppers are now 8.5% better off on each weekly shop than they were in December 2014 – a saving of £397.80 over a year,” mySupermarket.co.uk claimed.
Elsewhere, a survey of 400 consumer goods, retail and manufacturing executives from 27 countries carried out for accountancy firm KPMG International and the Consumer Goods Forum revealed a need for better understanding of customers.
Published last month, the survey found that companies wanting to keep in front of change and secure competitive advantage were transforming themselves into fully integrated ‘omni businesses’ – able to respond to the needs of customers across all channels and at any point during their shopping.
Willy Kruh, KPMG’s global chair of consumer markets, said: “To compete in a global marketplace with shifting demographics, even today’s best-in-class consumer goods retailers and manufacturers require a deeper, multidimensional understanding of their customers.”
Meanwhile, consumers fear food prices will rise after Brexit and plan to change their shopping habits according, revealed new research from Nielsen.
