The grocery wholesale market is tipped to reach £18.3 billion by 2009, according to food and grocery think-tank IGD.
The figures predict at 10 per cent growth on today’s market value of £16.7 billion.
In new research, published in Grocery Wholesaling 2005, IGD anticipates that delivered wholesale will continue to fare better than the cash and carry sector, reaching £8.5 billion in 2009, an average annual growth rate of 3.5 per cent.
This growth will be boosted by the predicted ongoing growth of symbol groups, as well as growth through forecourt retailing and foodservice. Cash and carry, meanwhile is expected to reach £9.8 billion, an average annual growth rate of 0.5 per cent.
Key considerations for the future include consolidation in both the wholesale sector, as shown by the recent Bestway acquisition of Batley’s, and in the convenience market.
IGD said it believed that franchising is also likely to drive growth as it presents opportunities for non-affiliated independents who seek to benefit from the advantages of belonging to a larger business.
The future for the sector is positive, said suppliers. IGD’s exclusive supplier survey revealed that 88 per cent of suppliers say they are committed to investing in the wholesale sector, while 66 per cent are devoting more resource to it than last year.
A further 86 per cent believed that communication between wholesalers and suppliers is continually improving, and encouragingly IGD found that three-quarters of suppliers state that they work with wholesalers to provide category plans and support for independent retailers.
Joanne Denney-Finch, IGD Chief Executive said “The wholesale sector continues to grow, albeit at a slower rate (1.9 per cent) than the grocery sector, which grew by 3.3 per cent last year.
“However, our research shows that both suppliers and wholesalers are positive about the future of the sector, with suppliers devoting more resources and wholesalers expecting to see growth across convenience stores, forecourts and foodservice in 2005.
“We also found that a key opportunity is to improve communication and ensure that continual improvements in information flow and collaborative planning take place. Initiatives of this type already underway are definitely proving successful.”
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