The UK food and grocery market will be worth £170 billion by 2013, growing at an average of four per cent a year from its current value of £140bn, according to international retail analysts IGD.
Research released yesterday forecasts that growth in online and discount retailing is set to outpace the market. The value of online food and grocery is forecast to nearly double over the next five years, from £3.2bn in 2008 to £6.2bn in 2013. Discounters will grow from £5.5bn today to £8.5bn by 2013 - although their market share will show a modest rise from 3.9 per cent to five per cent.
Joanne Denney-Finch, IGD chief executive, said: “Many factors will drive further growth in online food and grocery retailing. Faster home broadband connections are making the shopping experience quicker. The major retailers are focusing on developing the online channel and making the shopping experience easier and more flexible. Consumers are also becoming more familiar with online shopping, especially as fuel prices are making them think twice about using the car.
“Discounters have been taking advantage of the increasing focus on value among UK shoppers, having made significant strides in their propositions over recent years. These enhancements, together with strong expansion plans, mean discounters look set to continue growing ahead of the market, although the pace of growth will slow as the major retailers continue to develop their own value offers in response.”
Gavin Rothwell, IGD senior business analyst and report author, said: “Keeping costs down has become an even greater imperative for business over the past year. And this will be key in what promises to be a challenging 2009. We believe market conditions will begin to improve in 2010, and we are predicting further improvements through to 2012, when the London Olympics will deliver a timely boost to the grocery sector and the broader UK economy. By 2013, we are forecasting the UK food and grocery market to be worth £170bn.”
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