The UK food and grocery market will grow by 13% between now and 2020 to £200.6bn, according to the latest forecast by IGD.
It predicted that online sales, discounters and convenience will be the main sources of growth, although the rate of growth will be slower over the next five years than previously.
Online, which is the fastest growing part of the market, will have almost doubled in value by 2020 rising to £17.2bn from £8.9bn this year.
Discounters including Aldi, Lidl, Netto and Poundland will grow by over 80% to be worth £23.2bn, while convenience stores will remain the third fastest growing grocery sector at 17% and will be valued at £44.1bn by 2020.
Superstores and hypermarkets will experience a modest fall in sales from £71.7bn to £69.9bn by 2020 but they will still be the biggest slice of the grocery market.
“A record three out of 10 (28%) shoppers said they shopped online for their groceries last month, compared to 22% in 2010 when we started tracking the data. People are making the most of new devices, faster connection speeds and more click and collect points,” said IGD chief executive Joanne Denney-Finch, IGD chief executive.
“One in nine shoppers (11%) told us they used discounters for the majority of their grocery shopping last month, compared to just 3% who said they did in 2010. We expect the discounters to maintain strong momentum and open many more stores, including in more affluent areas. However, we do expect growth to be harder won as the pool of best locations gets smaller and the major supermarkets fight back.”
She admitted that convenience stores have a “similar challenge” in finding new locations and will face increased competition from other formats such as discounters for top-up shopping. However, they remain popular and have the benefit of being visible in communities.
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