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The UK food & grocery market 2017-2022

The UK food & grocery market 2017-2022

Summary

Despite moves to source more produce from within the UK to offset currency fluctuations, inflation will cause prices to rise across all food & grocery categories, boosting spend by 19.6% over the next five years, reaching £172.0bn in 2022. Price competition from discounters will go some way to mitigate price rises but will subsequently hit margins.

Adverse weather conditions across mainland Europe towards the end of 2016 have resulted in forecast fruit & vegetable inflation of 2.9% in 2017, driving growth of 21.7% in the category between 2017 and 2022. 35-54 year olds have the highest spend per head in 2017, contributing to 40% of total F&G spend, as they support families. The 65+s will account for a larger proportion of spend in the long term, so retailers must tailor ranges and experiences.

Younger shoppers are driving growth in top-up shopping missions, with 8.2% of those aged 16-34 going food & grocery shopping once a day. The online food & grocery market will rise 43.3% between 2017 and 2022, adding £4.9bn to the value of the market - reaching £16.2bn. Penetration will grow 1.6ppts, to 9.4% in 2022 - still a long way behind non-food levels of 26.3%, despite improved online fulfilment options and new players investing in the channel.

Value for money is the largest purchase motivator for food & grocery shopping, particularly among the 55-64 age group. This is closely followed by quality, which has increased in importance on the previous year, by 1.0 percentage point. Despite squeezed disposable incomes, we expect that the demand and expectation for quality will continue to grow. Food provenance must be showcased; those shifting from international suppliers to British must market the benefits to consumers, while investment in premium quality private label ranges will support ATV.

Customer service and the instore experience have increased the most on last year in terms of importance, ensuring that fostering an engaging instore environment is crucial to boosting appeal. Tesco, Waitrose, Morrisons and the discounters have already invested in store refurbishments and more shop floor staff.

Market leader Tesco is simplifying its ranging and investing in the instore experience, to better resonate with shoppers. This will help it to maintain a share of 22.2% in 2017. Like Tesco, Morrisons has also made a comeback after five years of l-f-l declines, with its share forecast to remain stable at 8.2% in 2017.

The report The UK food & grocery market 2017-2022 offers comprehensive insight and analysis of the market, the major players, the main trends, and consumer attitudes.

In depth, this report provides the following -

  • Identifying the factors that are impacting the food & grocery sector.
  • Exploring what people buy and spend in the food & grocery.
  • Exploring what people buy and spend in food categories.
  • Exploring what people buy and spend in food & grocery sector.
  • Looking at the retailers consumers use in the food & grocery sector
  • Understanding how consumers shop in the food & grocery sector.
  • Exploring motivations and views on shopping for food & grocery products.
Companies mentioned in this report: Tesco, Sainsbury's, Asda, Morrisons, Aldi, Co-op, Marks & Spencer, Waitrose, Lidl, Spar, Ocado.

Scope
  • The discounters will add greater pressure on the big four as they widen their presence, especially in regions where they are currently underrepresented.
  • Online food & grocery sales are forecast to grow by 43.3% in the five years to 2022, driven by investment in fulfilment capabilities by the market leaders, new entrants and online pureplays.
  • Top-up shopping continues to be important for consumers as they opt for smaller, more frequent, food & grocery shopping missions, with 43.5% of food & grocery consumers shopping at least once every few days.
Reasons to buy
  • Understand the opportunities in the market by learning who shops for food & grocery, how frequently they shop and what drives their store selection, in order to better resonate with consumers and boost future shopper conversion levels.
  • Utilise our five year market forecasts to understand which subcategories are the strongest and fastest performing to ensure more stringent focus and investment in these areas.
  • Use our analysis of the key market issues to inform business strategies on food provenance, offsetting inflation, online development, acquisitions and partnerships, and retail park space expansion.
  • Use our online market forecasts and online consumer data to identify which consumers to target for online growth, how to build shopper penetration and understand which fulfilment methods to invest in and improve.


  • The hot issues
    • Market drivers in food & grocery
    • Main issues in food & grocery
    • Strategies for success
  • What people buy
    • Headlines
    • The sector at a glance
      • Table The sector at a glance
    • Overall sector size
    • Overall sector growth
    • Spend per head
  • What people buy: food
    • Category dynamics: food
    • Category growth: food
    • Food at a glance - by storage
      • Table Food at a glance - by storage
    • Storage category growth in food
    • Storage category dynamics: chilled
    • Storage category dynamics: frozen
    • Storage category dynamics: ambient
    • Food at a glance - by product category
      • Table Food at a glance - by product category
    • Category dynamics: bakery & cereals
    • Category dynamics: dairy products
    • Category dynamics: fruit & vegetables
    • Category dynamics: hot drinks
    • Category dynamics: meat & fish
    • Category dynamics: oils & fats
    • Category dynamics: pets, pet care & pet food
    • Category dynamics: sugar & sweet products
    • Category dynamics: other foods
  • What people buy: soft drinks
    • Category dynamics: soft drinks
    • Category growth: soft drinks
  • What people buy: alcoholic drinks
    • Alcoholic drinks at a glance
      • Table Alcoholic drinks at a glance
    • Category dynamics: alcoholic drinks
    • Category growth: alcoholic drinks
    • Category dynamics: beer
    • Category dynamics: wine
    • Category dynamics: spirits
  • What people buy: tobacco
    • Category dynamics: tobacco
    • Category growth: tobacco
  • What people buy: non-durable household goods
    • Category dynamics: non-durable household goods
    • Overall growth: non-durable household goods
  • Where People Shop
    • Headlines
    • Channels of distribution
      • Table Channel split for food & grocery over time
    • Market share
      • Table Five year market shares
    • Key metrics
      • Table Comparative metrics for leading retailers
    • Visited retailers
    • Purchased retailers
    • Retailer profiles
    • Competitive dynamics
      • Table Competitive overlaps
  • How people shop
    • Highlights
    • Who shops and where they are located
    • What people purchase
    • Online dynamics
    • Channels used by consumers
      • Table Channel usage for food & grocery by demographics
    • Fulfilment methods used by consumers
      • Table Fulfilment methods used for food & grocery by demographics
    • Frequency of shopping
    • Store formats used by consumers
    • Barriers to online shopping
    • Drivers of online shopping
  • Why people shop
    • Headlines
    • What's important
      • Table What's important when purchasing food & grocery by demographic
      • Table What's important when purchasing food & grocery by retailer
    • Retailer recommendation
  • Methodology
    • What is included
    • Market sizing

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