In a recent survey, the Institute of Grocery Distribution (IGD) has revealed promising growth figures for the UK food and drink market over the next five years. The survey suggests a projected increase of 19%, forecasting a market worth of over £315bn by 2028, compared to £265bn this year.
One notable trend identified by the survey is the shift in customer preferences towards own-label and discount options. It predicts that this trading down phenomenon within the retail sector will stabilize by 2025 as inflation subsides and disposable incomes rise.
The survey also highlights a change in consumer behavior, with shoppers moving away from traditional supermarkets towards convenience stores, discounters, and online platforms. This shift has been primarily driven by the desire to find more affordable products. Looking toward the future, the survey predicts that the trend of trading down will continue until 2024, favoring own-label options and discount retailers.
Bryan Roberts, the global insight leader at IGD, emphasizes the significant role played by discounters in helping people navigate the cost-of-living crisis. Their projected growth in the coming years is proof of this impact. Roberts believes that during this period, other channels may find it challenging to compete, but as costs stabilize and consumers grow more comfortable with discretionary spending, multi-channel usage will likely increase.
Shoppers are expected to maintain a mixed repertoire, valuing convenience and experience while still adhering to money-saving behaviors ingrained by this point. As a result, this presents opportunities for alternative channels to flourish, particularly as discounter expansion plans begin to slow down.
Overall, the survey’s findings signify positive growth prospects for the UK food and drink market, although it also highlights the need for businesses to adapt to changing consumer behaviors and maintain competitiveness in the evolving retail landscape.
