Saturday 10th Dec 2016 - Logistics Manager

Grocery logistics: big stores begin the fight back

Grocery logistics strategies will have to be rethought as new research predicts an end to the decline in hypermarkets.

Grocery logistics: big stores begin the fight backThe UK food and grocery market set to grow by ten per cent between now and 2021, according to forecasts from IGD.

Retailers have been restructuring their supply chains in recent years to take account of both the rise in online and convenience shopping and the decline in the traditional large format store.

But the IGD now predicts that sales at larger stores will stabilise over the next five years. Online will remain the fastest growing channel followed by discounters. Overall, the market will increase by ten per cent to £197bn by 2021.

Hypermarket sales, worth some £16.5 billion in 2016 are expected to rise by 0.2 per cent by 2021 while supermarket, the largest sector worth £86.6m in 2016, will rise by 0.8 per cent over the next five years.

IGD chief Joanne Denney-Finch said: “The growth of other channels over the last few years has forced larger stores to rethink their layouts. Two-thirds (64 per cent) of shoppers say that changes such as better prices, better loyalty rewards, more staff and local, independent concessions would encourage them to use larger stores more often.

“Over half (53 per cent) of shoppers say they have used a food discounter in the last month against 37 per cent in 2010. However, we are forecasting their growth to slow over the next five years, as finding appropriate sites for new stores gets tougher and the supermarkets hone their focus on price, range and customer service.”

Denney-Finch pointed out that a record 29 per cent of British grocery shoppers said they shopped online for their groceries in the last month against 20 per cent in 2010. “More than four in 10 (42 per cent) of all British grocery shoppers claim they could be converted to online shopping.