United Kingdom Food & Drink Q1 2019
Our spending forecasts for food & drink will remain relatively weak over the forecast period to 2022, boosted by strongerinflation. While there are positive trends towards premiumisation and health consciousness, which is leading to consumers spendingmore on higher quality goods, the mass market trend will be focused more on lower prices. This is driving the launch of Tesco's newdiscount store format, Jack's, which it unveiled in September in order to combat the in-roads made by Aldi and Lidl over the past fiveyears. Discounters have driven prices down across the board and prompted Sainsbury's and Asda to merge in to capture growth in adifficult operating environment. Segments of the industry are under pressure too, particularly Coca-Cola, which led it to acquirecoffee chain Costa. With hot drinks expected to be our top performing food and drink category over the forecast period, this moveto diversify into a booming segment should hold long-term value as consumers shift away from soft drinks.
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