Discount shops to boost food sales
05 December 2011 09:49
Discount retailers are expected to drive a near 20% expansion of the wider food and grocery market over the next five years to a total worth of £184 billion.
The UK food and grocery market, valued this year at £156.8 billion by IGD Retail Analysis, will expand as discount retailers, such as Lidl and Aldi, grow at an annual rate of 10.1% to a total value of £11.4 billion by 2016, compared to £7 billion this year.
The convenience sector - which includes Tesco Express and Sainsbury's Local - will grow by 4.7% and is set to be worth £42.2 billion by 2016, while online will be the fastest growing channel with an annual average growth rate of 13.7% to reach £11.2 billion over five years.
The upbeat forecasts come despite numerous bleak predictions for the next few years from the independent tax and spending watchdog, the Office for Budget Responsibility, the Bank of England and think-tank the Organisation for Economic Co-operation and Development.
Joanne Denney-Finch, chief executive at IGD, said growth in the sector will be driven by one-off events including the Queen's Jubilee celebrations, the Euro 2012 football championship and the London Olympics.
She said: "We still buy most of our groceries at supermarkets and hypermarkets but we are also using different types of stores more often, such as online and convenience. And leading retailers are building their presence in these areas."
During this year's royal wedding, IGD's ShopperTrack research found there was a spike in shoppers' interest in food with a local or British theme.
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