Convenience sector drives grocery growth

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The UK convenience sector will outperform the rest of the grocery market growing by 5.8 per cent a year to £42.6bn in 2015, according to the Institute of Grocery Distribution.

The report, UK Grocery Retail Outlook: Opportunities Beyond 2010, said that overall, the market is expected to grow by 3.9 per cent a year to £182.7bn in 2015.

Chief executive Joanne Denney-Finch said: “Despite a tough trading environment, the food and grocery industry has demonstrated a resilient performance in the last 12 months. Companies have responded quickly to shifting shopper trends and adapted their business models accordingly to win the contest for value and convenience. The road ahead remains uncertain, but those businesses that keep up with the pace of change will continue to reap the rewards and prosper.”

Non-food sales now account for 8.2 per cent of the UK grocery sector, reaching £12.4bn in 2010 and are predicted to increase to £17.1bn by 2015

The study also found that online grocery retailing is set to double in value from £4.8bn to £9.5bn by 2015.

The report, which also includes a supplier survey, found that food and drink manufacturers expressed a high level of optimism about the prospects of their businesses in the next three years, with 63 per cent scoring 8 out of 10 or higher.

They are also aware of the need to innovate to grow. When asked how they would change their product strategy in the next three years, nearly two thirds (64 per cent) of suppliers said that they envisage creating products and pack sizes tailored to meet different store formats or channel-specific needs.

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