Online drives UK food sales to £24bn by 2024
Written by Peter Walker
The UK food and grocery industry is forecast to grow by £24 billion, or 12.5 per cent, by 2024, according to the latest forecasts from IGD.
Online and discount sectors will contribute almost two-thirds of cash growth and will boost their combined market share from 18.6 per cent to 23.4 per cent over the next five years.
Online will be the fastest growing channel - up 43.8 per cent - but now only just ahead of discount, with the research organisation stating that on average, when conducting a main food shop online, shoppers spend 22 minutes planning, 31 minutes shopping and 13 minutes unpacking.
The average shopper also conducts one online shop a month.
Simon Wainwright, director of insight at IGD, said that growth in the online channel will come from a number of directions. “Firstly, newer players are entering the space, such as Amazon and meal box operators such as Hello Fresh, Gousto and Mindful Chef; faster and more convenient options to shop for groceries online are being introduced, such as Sainsbury’s, Ocado and Amazon all offering orders within an hour and widening the availability of delivery.
“More sophisticated analytics are also helping to strengthen customer loyalty,” he added.
While large - supermarket and hypermarket - store openings are slowing, there’s significant investment in upgrading existing stores, making them relevant for changing shopper needs.
“Large stores remain a core part of the multichannel approach shoppers continue to take,” commented Wainwright, with the average shopper still visiting larger stores 10 times a month, which is three times as many as food discount stores.
“Over the next five years we’ll see these retailers investing more in how they can improve the shopper experience at existing stores over introducing new sites, with key trends including easier in-store navigation for shoppers conducting smaller shops and introducing more food service and concessions.
“Developments are also taking place in product innovation, brand partnerships, local sourcing and offering new services, which is largely being driven by competition from the likes of Aldi and Lidl,” he concluded.