UK’s convenience sector will continue to grow faster than grocery retailing, according to a new report by Institute of Grocery Distribution (IGD).
IGD’s UK Grocery Retail Outlook: Opportunities Beyond 2010 report predicts that spending in grocery retail outlets will reach £182.7 billion by 2015, representing an average annual growth of 3.9 per cent.
The report projects convenience spending will grow by even more, 5.8 per cent per year, and total £32.1 billion in five years’ time.
Gavin Rothwell, UK Research Manager at IGD, commented: “Many UK retailers have announced major development plans in areas such as convenience and online - all of which are helping drive growth.
“Multi-format and multichannel strategies are gaining traction and scale as retailers seek to reach shoppers in different ways.”
Nearly two-thirds of manufacturers surveyed for the report said that they envisage creating products and pack sizes tailored to meet different store formats or channel-specific needs.
Non-food sales will reach £12.4 billion in 2010 and are estimated by IGD to grow to £17.1 billion by 2015, as grocery retailers increasingly focus their attention on a sector which at present represents 3.9 per cent of its business.
Technological advancements and growing consumer confidence in the medium will double the value of online retail from £4.8 billion this year to £9.5 billion by the middle of the decade.
Joanne Denney-Finch, IGD CEO, said: “Despite a tough trading environment, the food and grocery industry has demonstrated a resilient performance in the last 12 months.
“Companies have responded quickly to shifting shopper trends and adapted their business models accordingly to win the contest for value and convenience.
“The road ahead remains uncertain, but those businesses that keep up with the pace of change will continue to reap the rewards and prosper.”