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UK Grocery Growth
The UK Grocery Retail Market should grow by 2.7% this year to £118.1 billion, according to IGD. The growth comes despite almost static food prices, and reflects the increasing contribution of non-food groceries as well as trade-up by consumers to premium ranges.
The report, Grocery Retailing 2004, says the Food and Grocery category accounted for 13% of all household expenditure in 2003, and for 49p of every £1 of retail spending. Non-food will account for 10% of the category's total annual sales.
Food prices are rising very slowly - at 0.5% per annum, 2% below inflation, but IGD says that the market will continue to grow at an average rate of 2.5% over the next five years and will be worth £133.5bn (at current prices) by 2009. The main growth areas are hypermarkets and the convenience sector. There are currently around 600 hypermarkets, and IGD believes this will increase by a third in the next five years, while the convenience sector will grow from £23bn to £29bn in the next four years.
IGD Business Manager David Gordon says the growth has been achieved despite low inflation due to the very strong retailing skills in the sector. 'Over the next five years we will see both ends of the market driving this growth. At one end , the convenience market is outperforming the total market and will continue to do so. At the other end of the scale, the hypermarkets will continue to develop to satisfy consumers' desires for non-food and one-stop shopping'.
IGD's web site is at www.igd.com
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