The UK food and grocery market is set to grow 10% – or £19.1 billion to £211 billion – between 2019 and 2022 when £1 in every £11 will be spent online.
Furthermore, according to research by IGD, online market share will increase from 6.2% in 2019 to 8.9% in 2022.
Simon Wainwright, director of global insight at IGD, said: “We forecast e-commerce will gain market share faster than previously predicted, following the dramatic influx of new shoppers and bigger order sizes in 2020 as a result of COVID-19.
“While we expect growth to pause in 2021, it will later resume, with continuing expansion from Amazon and the launch of online operations by M&S through Ocado supplementing activity by the Big Four.”
Discounters will also see major gains, with IGD forecasting discounter market share will increase from 12.8% to 14.6% in 2022.
Wainwright said: “Though eclipsed by the surge in online sales in 2020, discount will be the fastest growing channel in 2021 and 2022 as unemployment climbs and shoppers across the income spectrum look to economise. Store network expansion will enable this growth, with smaller store formats enabling Aldi and Lidl to boost their reach into urban areas and some variety discounters scaling up their grocery operations.”
IGD said convenience store market share will increase from 21.4% in 2019 to 22% in 2022, but large stores will suffer, with hypermarket market share decreasing from 8.4% in 2019 to 7.6% in 2022, and supermarket market share decreasing from 46.1% in 2019 to 42.3% in 2022.
“Strong growth at the start of the pandemic – driven by shoppers stocking up and preferring spacious stores – has receded. We expect hypermarkets to revert to sales declines as more shoppers migrate to other channels. After a boost to sales in 2020 from Covid-19, supermarket growth will turn negative by 2022. The channel will lose ground, particularly to discount and online, though it will defend its share better than hypermarkets,” said Wainwright.