Growth forecast across all retail channels, though underpinned by in ation.

Growth forecast across all retail channels, though underpinned by inflation

The UK grocery market is set to grow by 11.3% – from £216.8bn to £241.3bn – between 2022 and 2027, according to highly anticipated new figures from insight provider, IGD.

While inflation will underpin the majority of growth in 2022, with a 3.5% value increase predicted, this will moderate from 2023 onwards, IGD anticipate. With the war in Ukraine impacting the UK supply chain and food prices expected to increase by 8.9% in 2022, IGD also 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: “Our new forecast sees growth for all retail channels. Though discount will naturally benefit from shoppers’ desire to save money, growth will be held in check by increasing competitiveness from other channels. “The outlook has changed most for larger stores, where we expect more competitive pricing and the development of more inspirational store formats to achieve growth, while convenience is well placed to build on the growth achieved during the pandemic. After largely holding on to sale gains from Covid, service investments and the rollout of rapid delivery will boost the online channel further.

“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 valuefocused retailers.

“Retailers’ sales will however be supported by shoppers eating out less often, building demand for athome entertaining and premium meal solutions.”

Other highlights from IGD’s channel forecasts, included discount gains from shoppers’ need for value - 2022-27: +£7.1bn (+23.9%). Discount will be the fastest growing channel over the forecast period, say IGD, driven by a combination of households looking to save money, discount retailers expanding their store networks, and variety discounters sharpening their grocery offer. Channel growth, however, will be held in check by a more competitive offer at multiples and by the increasing risk of sales cannibalisation in catchments where they are already well represented. Maxime Delacour, senior retail analyst and specialist in the discounter channel, explained: “Physical expansion will remain key to growth for discounters, with both Aldi and Lidl looking to maintain their ambitious opening targets for 2025. However, with the possibility of the retailers missing these targets and openings likely to slow following this date, forecast growth is also slowing.

“Although like-for-like growth has been a challenge for the discounters, they are well placed with the costof-living crisis to appeal to shoppers’ increasing savvy behaviour. Attracting new shoppers will be key, with Lidl in a strong position here to use its Lidl Plus app to encourage loyalty.” After a slight decline in 2021 against huge surges in shopper numbers and order sizes, online will rebuild momentum and outpace discount from 2025, IGD state – 2022-27: +£5.0bn (+22.6%). Growth will pick up as new order capacity is developed, and rapid delivery services expanded. However, with operators facing into cost pressures, delivering profits is likely to be prioritised over sales growth, particularly in the short term, they suggest.

Simon Mayhew, head of online retail Iinsight at IGD, explained: “Increasing competition will ensure that bricks and clicks retailers continually invest in their online businesses. Quick commerce pure plays and bricks and clicks retailers will continue to expand their rapid delivery operations, enabling online to cater for a broader range of shopping missions, such as food for now and top-up shops. This will attract new shoppers to the channel and increase how frequently they shop.” In a more ‘neighbourhood focus’, say IGD, and following a 2021 impacted by tough comparatives, 2022 will see a return to more buoyant growth for the convenience channel as shopping behaviour normalises and events provide a boost, say the analysts - 2022-27 +£5.9bn (+13.0%). 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.

Patrick Mitchell-Fox, senior business analyst at IGD and convenience channel expert, commented: “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.” Nick Gladding, senior retail analyst at IGD, concluded: “A much-improved value position and effective loyalty schemes will allow operators to defend their market share much better than in the 2008 downturn. But operators need to ensure a focus on efficiencies does not compromise shoppers’ experience and that they continue to offer breadth of range to differentiate from discounters.”

MPE’s New Sandwich Packing Machinery Makes Lunch Last Longer

For sandwich manufacturers, extending the shelf life of their product is key to management of stock levels and ensuring supply. The new SL1400VG machine from MPE UK is designed to increase the output level, and with the addition of vacuum and gas capacity, can enhance shelf life with modifi ed atmosphere (MAP) packaging.

The fl exible SL1400VG (vacuum and gas) machine can increase output for sandwich and lunch ranges for food shops and the catering trade as well as larger scale production facilities. Cardboard skillet sizes are adjustable to suit diff erent sizes of sandwich or pack size and provide a consistently accurate seal – and MPE is confi dent it can provide an extended shelf life so your product stays fresh for longer.

MPE’s experience in the food packaging industry has led the company to develop a range of machinery suited to sealing and fi nishing a number of diff erent substrates, from foils to paper to plastics. Its products range from smaller scale table-top sealers to in-line manufacturing machinery that can be adapted to work with legacy systems.

Downtime is minimised by the simplicity of the machines, and changeover of tooling takes minutes with supplied spares and tools. The SL1400VG is manufactured in the UK using maintenance free, food-grade hygienic stainless steel, and designed to be easily maintained and user friendly. All MPE machinery is supported 24/7 by its UK based engineers, who can be called out to site if needed.

The recipe-driven confi guration allows for a rapid switchover of products, which are loaded into the machine’s conveyor plates and indexed until they move to the sealing station. The sandwiches are then vacuum packed with the recipe-specifi c gas and hermetically sealed prior to being conveyed to a secondary packing station. Sealing around 20 packs per minute, the SL1400VG is a reliable addition to your production capacity.

MPE’s Technical Director, John Hodgkiss, says its latest sandwich sealer ticks all the boxes for food to go: “Our extensive experience of the tray-sealing industry means we can deliver highly versatile alternatives to the marketplace which are robust enough to be used in the toughest environments.

“The need for speed and accuracy is driving automation and innovation in the food industry, so we continually strive to provide exactly what our customers need to stay ahead of their competition and meet their own customers’ demands, as quickly, eff ectively and effi ciently as possible.”

For further information about sandwich sealers and other tray sealing machinery visit the MPE UK website or contact sales on 01663 732700.

Mpe-uk.com