The food & grocery sector is highly inflationary – very little of the growth seen since the downturn has come from increasing volumes as shoppers remain reluctant to increase their consumption. This is set to be the picture for the next two years at least as increased global demand for food is unlikely to wane.
Food and Beverages
Discover where the market is heading with Research House
How much is it worth?
Inflation is set to continue to dictate the landscape of the food & grocery sector for the next two years as cost price pressures continue. Verdict provides insightful solutions for retailers working hard to stay competitive while protecting margins.
What will future demand be?
Since the downturn, shoppers have had to adapt and adjust their budgets to absorb increased food prices by cutting down on waste and buying less. These habits are unlikely to disappear quickly as budgets are restricted meaning demand and volume growth will remain low.
Which channels should I invest in?
While it is still unclear if the online channel is a profitable one or not, it is unavoidable. The rapid sales growth of specialist in this area is testament to the continued customer demand for the benefits of online grocery shopping. Convenience stores from the big players and symbol groups are proving extremely popular with shoppers as they look to make smaller, more frequent shops, cutting down on waste and keeping to a budget.
Who is gaining share and why?
While in the UK Tesco remains dominant at the top of the market, its share is being eroded by the increased pressure from its rivals as they make up for lost time, expanding convenience portfolios and investing in product quality. Alongside these established players are the discounters, who continue to gain share as their popularity among consumers increases year on year.
