UK grocery market 'to be worth £184bn by 2016'

The UK food and grocery market is set to be worth £184bn by 2016, up from £156.8bn in 2011, retail analyst IGD has forecast.

The retail analyst has said discount retailers will be one of the key drivers of this expansion, hitting over £10bn for the first time.

Through an estimated annual growth rate of 10.1 per cent the discount retailers are forecast to be grow £4.4bn to be worth £11.4bn by 2016.

IDG also forecasts the convenience sector will grow by 4.7 per cent and is set to be worth £42.2bn by 2016, up from £33.6bn in 2011.

But the online sector will be the fastest growing channel with an annual average growth rate of 13.7 per cent, IGD said. In the next five years it is thought it will almost double in value to reach £11.2bn, up from £5.9bn in 2011.

Chief executive of IGD Joanne Denney-Finch said prospects looked good for next year: “Despite the extraordinary economic climate and the ongoing uncertainty caused by the eurozone crisis, there are a number of exceptional events in 2012 that could provide opportunities for growth: the Queen’s Jubilee celebrations, the Euro2012 football championship and the London Olympics. During this year’s Royal wedding, for example, our ShopperTrack research found there was a spike in shoppers’ interest in food with a local or British theme."