2 minute read
UK Grocery Market
by 55 North
IGD forecasts growth across all retail channels
Convenience retailers are well placed to build on the growth achieved during the pandemic, the IGD predicts.
The UK grocery market is set to grow by 11.3% – from £216.8bn to £241.3bn – between 2022 and 2027, according to new figures from insight provider IGD. In addition, the research predicts that total UK sales in convenience stores are expected to rise by 13% to £50.9bn between 2022 and 2027.
IGD forecasts that 2022 will see a return to more buoyant growth for the convenience channel as shopping behaviour normalises and events provide a boost. Thereafter, the channel will continue to modestly outperform the market, sustained by ongoing investment from retailers in new and improved stores bringing enhanced capability to the channel.
The research also shows that war in Ukraine is impacting the UK supply chain and food prices are expected to increase by 8.9% in 2022. IGD anticipates shoppers will respond to this and the spike in general inflation by making real terms cuts in food expenditure.
Caroline Myers, Director of Retail Analysis at IGD, said: “Many shoppers on tight budgets will adopt a more for less mentality – managing their spend closely by trading down to cheaper ranges and pack sizes, switching brands for private label and seeking out the best promotions. Shopping will also be more planned, with many switching to more overtly value-focused retailers.
“Retailers’ sales will however be supported by shoppers eating out less often, building demand for at-home entertaining and premium meal solutions.”
Patrick Mitchell-Fox, Senior Business Analyst at IGD and convenience channel expert, added: “2022 will be boosted by a number of big event opportunities – including the Platinum Jubilee in early June and the football World Cup in November. A hoped-for good summer would create additional opportunities, helping cement the recovery of city centres and travel, both domestic and in-bound tourism. However, it is clear that inflation will be an important factor in driving value sales during the year.”
