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UK food market set to grow by 10% by 2021

UK food market set to grow by 10% by 2021

London, UK: The UK food and grocery market is forecast to grow by 10% between now and 2021, giving it a value of £197bn, according to the latest forecast from IGD.

IGD is predicting a stabilisation of sales at larger stores over the next five years – however online will remain the fastest-growing format, followed by the discount stores.

Joanne Denney-Finch, IGD chief executive, said: “It has been a challenging time for food and grocery retailers, with an extremely competitive market dampened by unprecedented food and drink deflation. Yet we believe there will be a modest recovery across food and grocery over the next five years, as inflation picks up and shoppers start to benefit from the investments that retailers are making in their stores and ranges.

On the growth of online, Denney-Finch said: “Online is set to remain the fastest-growing grocery channel, driven by the growth of click and collect services, and new players entering the online grocery arena. A record 29% of British grocery shoppers say they shopped online for their groceries in the last month against 20% in 2010, and more than four in 10 (42%) of all British grocery shoppers claim they could be converted to online shopping.”

IGD forecasts that £1 in every £8 will be spent at a discounter, up from £1 in £10 this year.

“Over half (53%) of shoppers say they have used a food discounter in the last month against 37% in 2010. However, we are forecasting their growth to slow over the next five years, as finding appropriate sites for new stores gets tougher and the supermarkets hone their focus on price, range and customer service.”

IGD believes that convenience stores are facing increased competition from other channels, such as discounters and supermarkets.

“We still expect convenience to grow, but that is slowing down as the sector comes to maturity and other channels compete more effectively for the top-up pound,” said Denney-Finch.