UK food sales to reach £24 billion by 2024
The UK food and grocery industry is forecast to grow by £24.1bn, or 12.5%, by 2024, bringing the market to a total value of £217.7bn, according to the latest forecasts from research organisation IGD.
Online and discount will contribute almost two-thirds of cash growth and will boost their combined market share from 18.6% to 23.4% over the next five years while supermarkets and hypermarkets will account for half of the market (50.1%) in 2024.
On average, people are conducting 24 shopping trips per month and spending 18.3 hours a month planning, travelling, shopping for and unpacking their food and grocery shopping, according to the study. "Growth in the online channel will come from a number of directions. Firstly, newer players are entering the space such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef. Faster and more convenient options to shop for groceries online are being introduced, such as Sainsbury's, Ocado and Amazon all offering orders within an hour and widening the availability of delivery. More sophisticated analytics are also helping to strengthen customer loyalty," says Simon Wainwright, Director of Insight at IGD.
Key benefits of online shopping includes good value, time-saving and ease of shop. "Our research tells us that online is preferred the most for the main food shop, with online shoppers saving 23 minutes on average shopping online for their main shop than if they were to do this in a large store," added Mr Wainwright.
According to the research, the biggest cash contribution to market growth will be from discounters (food and variety discounters) up by 40.2%, adding £9.8billion in this market. On average, when conducting the main food shop at a food discounter, shoppers spend 15 minutes planning, 25 minutes travelling, 34 minutes shopping and 12 minutes unpacking. The average shopper conducts 3 shopping trips at food discounters a month.
"With many food discount shoppers now perceiving Aldi and Lidl as supermarkets rather than discounters, and more targeted investments in categories such as fresh produce, meat, bakery and beauty, the channel will continue to experience notable growth. Developments include the expansion of Aldi, which is on track to open 1,200 stores by 2025, and Lidl upping store openings to 50-60 per year.
According to shoppers, the benefits to shopping more with food discounters in future are good value, time-saving and concise range. Over a fifth (21%) of shoppers say they currently use food discounters for the majority of their shopping (2019), and 26% say this will be the case in 2021-2022," commented Simon Wainwright.
Also, large stores - hypermarkets and supermarkets- are expected to preserve a market share of 50.1% by 2024, with average shopper conducting 10 shopping trips at large stores in a month.
"Over the next five years, we'll see these retailers investing more in how they can improve the shopper experience at existing stores over introducing new sites, with key trends including easier in-store navigation for shoppers conducting smaller shops and introducing more foodservice and concessions. Developments are also taking place in product innovation, brand partnerships, local sourcing and offering new services, which is largely being driven by competition from the likes of Aldi and Lidl. To remain relevant to shoppers, large store retailers should focus on providing better value, more ways to save time and easier shopping experience,", concluded Mr Wainwright.