Grocery Retail Market in UK by Product and Distribution Channel - Forecast and Analysis 2023-2027

UK Grocery Retail Market Forecast 2023-2027

The UK Grocery Retail Market size is projected to increase by USD 52.54 billion and the market size is estimated to grow at a CAGR of 3.83% between 2022 and 2027. In 2017 the size of the market was valued at USD 217 billion.

The market is primarily driven by the diverse needs of consumers. With a significant portion of retail sales attributed to grocery shopping, there's a consistent demand for groceries among British consumers. This demand fuels the growth of grocery retailers and supermarket chains, which play a vital role in the UK's retail sector. London, as a major economic hub, influences trends and sales patterns in the grocery market nationwide. Moreover, the presence of established British grocery retailers and supermarket giants further solidifies the market's stability and growth potential. These factors collectively contribute to the robustness of the UK's grocery retailing industry.

Overview of the UK Grocery Retail Market

To get additional information about the market, Buy Report

Market Overview

Our researchers analyzed the data with 2022 as the base year, along with the key trends, and challenges. A holistic market analysis and report of drivers, trends, and challenges will help stakeholders in the value chain refine their marketing strategies to gain a competitive advantage.

Consumer Trends and Preferences

Innovative store layouts and offerings to amplify customer experience is an ongoing trend driving the market. The use of both traditional and online channels for shopping is increasing in the country, putting pressure on distribution channels like department stores, specialty stores, hypermarkets, and supermarkets to adopt innovative strategies. The prevalence of smartphones has led to the development of IoT devices like Beacons, which enable location-based services and precise targeting for department stores. Additionally, retailers and supermarkets in the UK are introducing technologies like 3D sensors to enhance safety and curb the spread of COVID-19. The adoption of beacon technologies is expected to increase customer interaction and have a positive impact on the market and trends during the forecast period.

Future Outlook and Predictions

The future projection for the market is one of intense competition and dynamic changes. With the rise of e-commerce and delivery services, traditional grocery stores face challenges to retain their market share. British retailers are adapting, focusing on building customer loyalty through personalized content and streamlined delivery services. The UK's grocery sector is also witnessing increased competition from international players like Canada and France, further spurring innovation. Local shops are leveraging their proximity and community ties to compete with larger supermarket chains. Economic shifts and evolving consumer preferences will continue shaping the landscape of the UK grocery market.

Major Challenges and Opportunities

The threat of counterfeit grocery products is a major challenge hindering market. The market is facing a significant threat from counterfeits, which are widely available in various product categories, including FMCGs and electronics. Customers are finding it challenging to differentiate between counterfeit and genuine products, and the counterfeit market is flourishing through online platforms. This is negatively impacting the sales of major retailers and tarnishing the reputation of genuine manufacturers. Duplicate brands price their products lower than genuine ones, but they lack quality and durability due to low production costs. Counterfeit products often mislead consumers with fake packaging and similar product names, particularly in rural areas. The prevalence of counterfeit products is likely to impede the growth of the market during the forecast period.

Customer Landscape

The market trends and analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the Market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market in UK Customer Landscape

Key Players in the Grocery Retail Market

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Key Offering- EG Group is a world-leading independent convenience retailer that deals with food service, grocery, merchandise, and fuel stations across Europe, the United States, and Australia. The key offerings of the company include a premier 30-gram protein plus energy and immune support shake. 
• Key Offering-  Amazon offers 400-gram English oven multigrain bread which is used as a health supplement meal.  
• Key Offering- Carrefour offers aero honeycomb chocolate bar which is used as a confectionery food item.

The market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• Costco Wholesale Corp.
• EH Booth and Co. Ltd.
• Farmfoods Ltd.
• Heron Foods Ltd.
• HOFER KG
• Iceland Foods Ltd.
• Lidl US LLC
• Marks and Spencer Plc
• National Coop Grocers
• Ocado Retail Ltd.
• PROUDFOOT SUPERMARKETS
• SPAR (UK) Ltd.
• Tesco Plc
• Waitrose Ltd.
• Wm Morrison Supermarkets Ltd.

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Market Segmentation by Product, Distribution Channel

Market by Product

The market share growth by the food and beverages segment will be significant during the forecast period. The foods and beverages segment includes a wide range of products, such as fruits and vegetables, dairy products, frozen foods, fresh and frozen meat, baked products, snack foods, canned foods, and condiments. The most commonly preferred grocery products in this segment include fresh bread, salty snacks, and cereals. 

For a detailed summary of the market segments BUY REPORT

The food and beverages segment was valued at USD 168.29 billion in 2017 and continued to grow until 2021. This segment has witnessed rapid growth, driven by the growing demand for snacks, coupled with product innovation by vendors in terms of flavors. With a rise in the per capita income of consumers, there is a rapid shift in their consumption patterns in favor of organic and gluten-free products when compared with generic products. The demand for frozen snacks, for example, has witnessed significant growth, especially among teenagers. Vendors are constantly focusing on innovating various flavors and ingredients and offering products that are healthy and nutritious for children. Furthermore, vendors are offering fruit snacks to children who are reluctant to consume natural fruits. Thus, growth in the foods and beverages segment will boost the growth of the market during the forecast period.

Market by Distribution Channel

Discount stores are expected to witness one of the fastest growth rates during the forecast period. By 2023, discount stores are expected to claim USD 3.75 of every USD 12.50 spent on grocery items. Discount stores mainly offer private-label brands at a low cost in high-traffic areas. The growing reception of private-label brands by consumers, along with improvement in brand value and the quality of these products, is expected to propel the growth of this segment during the forecast period. The arrival of German discounters Aldi and Lidl in the UK increased the popularity of discount stores in the country. Thus, the abovementioned factors will boost the growth of the discount stores in the market during the forecast period.

Segment Overview

The market growth and forecasting market report covers revenue at global, regional & country levels and provides an analysis of the latest trends and opportunities from 2017 to 2027. 

• Product Outlook (USD Billion, 2017 - 2027)
  • Food and beverages
  • Non Food

• Distribution Channel Outlook (USD Billion, 2017 - 2027)
  • Hypermarkets and supermarkets
  • Convenience stores
  • Discount stores
  • Online
  • Others

Market Analyst Overview

The Market is characterized by diverse retail formats including hypermarkets, supermarkets, and convenience stores, offering a wide range of products from household items to alcoholic and soft drinks. With the rise of online food and grocery markets, customer-facing technology plays a crucial role in enhancing the shopping experience. Food inflation impacts value for money, driving consumers to seek competitive prices. Specialty retailers like food and drink specialists cater to niche markets, while convenience stores and gas stations offer convenience for on-the-go purchases. Tobacco and e-cigarettes remain significant categories alongside hot and soft drinks, reflecting changing consumer preferences and lifestyle trends.

Alcoholic drinks and hot beverages remain staples in households worldwide, alongside essential household products. These items are readily available in various retail outlets, including hypermarkets, supermarkets, and hard discounters, catering to diverse consumer preferences. With the rapid growth of the online food & grocery market, consumers now have the convenience of purchasing alcoholic drinks, hot drinks, and household products from the comfort of their homes. Additionally, other online retail platforms offer a wide array of choices for consumers seeking convenience and variety.

In the UK, the food & grocery retailing market continues to evolve, with online platforms playing an increasingly significant role. Consumers can access a wide range of alcoholic drinks, hot beverages, and household products through online channels, contributing to the growth and competitiveness of the market. As consumer preferences continue to shift towards convenience and digitalization, online food & grocery retailing is expected to further expand its presence in the UK retail landscape. 

Grocery Retail Market In UK Scope
Report Coverage	Details
Page number	132
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 3.83%
Market growth 2023-2027	USD 52.54 billion
Market structure	USD Fragmented
YoY growth 2022-2023(%)	3.46
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	Amazon.com Inc., Carrefour SA, Costco Wholesale Corp., EG Group, EH Booth and Co. Ltd., Farmfoods Ltd., Heron Foods Ltd., HOFER KG, Iceland Foods Ltd., Lidl US LLC, Marks and Spencer Plc, National Coop Grocers, Ocado Retail Ltd., PROUDFOOT SUPERMARKETS, SPAR (UK) Ltd., Tesco Plc, Waitrose Ltd., Wm Morrison Supermarkets Ltd., McCormick and Co. Inc., and B and M Retail Ltd.
Market dynamics	Parent market analysis, market growth and trends, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

 

 

BUY NOW Full Report and Discover more

What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across the UK
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of the market vendors

We can help! Our analysts can customize this market research report to meet your requirements. Get in touch