Research carried out by IGD has revealed that across the UK, the convenience sector is set to grow by £10bn over the next five years. The firm puts the current value of the sector at £35.6bn, claiming it will grow to £46.2bn by 2018, an increase of 29.8%.
The total food and grocery market is set to be worth £206bn by 2018, which represents an increase of over a fifth (21%) from its current value of £170bn. The good news for convenience is that it is set to grow at a faster rate than supermarkets (8.2%) and small supermarkets (7.3%). Online grocery is predicted to more than double in the next five years, from £6.5bn to £14.6bn, representing 123.7%. Discounters are set to grow 96.3% from £9.5bn to £18.6bn. Joanne Denney-Finch, Chief Executive, IGD, said: “The ‘hot three’ areas of online, convenience and food discounters are the ones to watch – collectively accounting for more than £3 out of every £4 of growth in UK grocery over the next five years. Both online and convenience retailing are reaping the rewards of our changing lifestyles. Convenience stores are also benefiting from a cultural shift towards shopping ‘little and often’.
They are increasingly providing products tailored to specific locations rather than a ‘one size fits all’ approach. With their sales set to rise by over £10bn over the next five years, we’re forecasting convenience to bring in the biggest cash growth of any type of grocery retailing between 2013 and 2018. “We also expect food discounters, like Aldi and Lidl to continue to do well and build on their recent stellar performance. They have improved shopper perceptions by effectively communicating the quality and value for money of their products, while also expanding the range of items they sell to help shoppers complete more of their weekly shop there.” Nearly a third (32%) of shoppers said that they will use food discounters more in the year ahead compared to almost a quarter (24%) in September 2010.
