At first glance, IGD’s latest UK Grocery Channel Forecasts paint a positive picture. The grocery market is forecast to grow from £258.5 billion in 2026 to £303.7 billion by 2031, adding more than £45 billion in value over the next five years. But beneath those headline numbers lies a more challenging reality for food and drink manufacturers.
Much of that growth will come from inflation and population increases rather than a meaningful rise in consumption. Real-term market growth is expected to remain weak for much of the forecast period, with 2026 forecast to see a real-term value decline of 1.7%.
For manufacturers, this changes the nature of the challenge.
Success over the next five years will be less about riding market growth and more about winning share in an increasingly competitive market.
Shopper caution has become structural
Years of inflationary pressure have reshaped habits, with consumers remaining focused on value, promotions and tighter control of household spending. Smaller baskets and more deliberate purchasing decisions are expected to remain embedded behaviours throughout the forecast period.
Manufacturers should resist the temptation to assume that easing inflation will automatically drive shoppers back to previous purchasing patterns. Instead, value needs to be built into portfolio strategy.
That doesn’t simply mean lower prices. It means ensuring the right architecture of products, pack sizes and price points to meet different shopper needs. Brands that can clearly demonstrate value, whether through affordability, quality, convenience or health benefits, will be best placed to defend and grow share.
Don’t overlook discount’s growing influence
Discount will remain one of the grocery market’s strongest-performing channels, growing at a forecast CAGR of 3.6% and adding almost £9 billion in sales by 2031. Aldi and Lidl’s continued store expansion will ensure these retailers remain important routes to market.
The channel is becoming a core battleground for grocery growth.
Winning in discount requires a different mindset. Simplified ranges, clear value propositions and efficient supply models will be increasingly important. Manufacturers that can develop channel-specific propositions without undermining their wider brand positioning will be best equipped to capitalise on future growth.
The highest additional spend will be found in supermarkets
Despite growing more slowly than online or discount, supermarkets are forecast to generate the largest amount of additional grocery spend over the next five years, adding £17.9 billion in value. They will continue to account for more than 40% of all grocery sales by 2031.
This reinforces the importance of maintaining strong partnerships with major supermarket retailers. Distribution gains, category leadership and impactful innovation within the supermarket channel are likely to deliver greater commercial returns than chasing smaller opportunities elsewhere.
Health will shape future demand
The combined impact of HFSS regulation, growing health awareness and increasing adoption of GLP-1 weight-management treatments will influence what shoppers buy, how much they buy and the pack formats they choose. IGD estimates GLP-1 adoption alone could offset £11.2bn of potential grocery market growth over the forecast period.
This creates both risk and opportunity. Businesses should evaluate portfolios through a health lens, considering reformulation, portion size, protein-rich products and other areas where demand is expected to strengthen.
The key takeaway from the next five years is clear: growth will still exist, but it will be harder won. Manufacturers that adapt to a market defined by value consciousness and changing health behaviours will be best positioned to outperform. Those waiting for a return to volume-led growth may find themselves waiting a long time.
About the author
Alex Rowberry, is the senior insight analyst at IGD. His focus is on helping clients understand the UK grocery market, the performance of its main channels and the strategies of its leading retailers.
