British supermarkets now control 90 per cent of the UK retail market for fruit and vegetables, with smaller retailers “struggling to compete”, according to international research firm IBISWorld.
The research shows there has been a 4.3 per cent annualised decline in revenue over the five years through to 2012/13, as UK shoppers, since the recession, are now more likely to support “budget brands and frozen food.”
Suzannah Rowley, a fresh produce analyst at IBISWorld, believes industry revenue will continue to fall over the next five years, and predicts that greengrocers and convienience stores are set for a difficult trading period. “Looking ahead, the rising market share and power of supermarkets will continue to plague specialised fruit and vegetable retailers,” said Rowley.
Duncan Swift, a food industry expert at accountacy firm Moore Stephens, believes smaller retailers will now have to innovate if they are to compete with supermarkets at a sustainable level.
He explained: “Thirty years ago the top eight supermarkets accounted for around 70 per cent of the fruit and vegetable retail market, so this growth to 90 per cent has been a long, drawn-out affair. “The other 10 per cent of retailers really need to up their game in NPD so that fruit becomes more of a snacking food within convienience stores; innovative packaging and advertising must be utilised to achieve this.”
However, Nick Tapp, head of agribusiness at Bidwells, believes the figures are not completely accurate, with this year’s poor weather and its impact on the supply chain clouding the data.
The research also states that the fruit and vegetable retail market has a low level of market share concentration, with the four largest companies accounting for less than 10 per cent of overall industry revenue.
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