Two-thirds of specialist retailers feel today’s trading climate is ‘challenging’ or ‘extremely challenging’ – but many expect the situation to improve in the coming year, according to a new study.
Rising costs and falling consumer spending have been flagged as the biggest challenges faced by farm shops, delis, bakers and butchers by the 2025 Farm Shop & Deli Review, which will publish next month.
It has been produced by UK Food & Drink Shows and Lumina Intelligence, which polled consumers and more than 100 senior executives.
It found rising food and ingredients costs top the list of industry challenges, followed by higher labour costs and rising businesses rates. A relatively small proportion of retailers (20%) see declining footfall as a challenge, but 40% are concerned about the fall in consumer spending.
Despite these challenges, 29% of specialist retailers say they expect trading conditions to improve over the next 12 months – though this figure is behind the grocery sector (39%) and hospitality sector (50%).
As well as an overview of the wider specialist food retail market, the Farm Shop & Deli Review looks in detail at sectors including bakers, butchers, farm shops, delis and food markets.
The nationally representative survey of 1,500 people found baked goods and meat are among the most popular products bought at specialist retailers. And it reveals why some consumers don’t use specialist stores, with 53% saying they are too expensive and 49% saying they prefer to do all their food shopping in one place.
The report also offers insight from leading industry figures including Paul Hargreaves, chief empowerment officer at Cotswold Fayre; Renée Elliott, founder of Planet Organic; and Wilfred Emmanuel-Jones, founder of The Black Farmer.
“The farm shop and deli market continues to grow despite an ongoing backdrop of challenging headwinds – this is born out of the resilience, passion and creativity that makes the sector the centre for innovation across the UK food and drink market,” said Andrew Reed, MD of exhibitions at UK Food & Drink Shows organiser William Reed.
Printed copies of Farm Shop & Deli Review will be available free of charge from the Farm Shop & Deli Stage at the UK Food & Drink Shows, which takes place from Monday 7 April to Wednesday 9 April at the NEC Birmingham.
Thirty thousand visitors and 1,500 exhibitors will come together for the event, which comprises four shows under one roof: Farm Shop & Deli Show, Food & Drink Expo, National Convenience Show and Foodex Manufacturing Solutions.
To find out more and register for free tickets to the event visit the UK Food & Drink Shows website.
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