While the size of the UK food & grocery market is set to grow 15% to £174.5bn by 2024, the Big Four grocers are expected to lose out on a further 1.1% of the total market (£1.9bn) during this period.
This is according to GlobalData’s latest report – ‘UK: Food & Grocery 2019-2024’. It reveals that while grocery sales through the Big Four (Tesco, Sainsbury’s, Morrisons and Asda) are forecast to grow 12.6%, the discounters and online players will gain further share, growing 25% and 55% respectively over the period.
Thomas Brereton, Retail Analyst at GlobalData, commented: “The recent set of supermarket Christmas trading results shows that UK shoppers still have an unsatisfied appetite for the proposition of the discounters; Lidl performed especially admirably, growing year-on-year sales 11% in December. While there is evidence of a slowdown in like-for-like sales growth at Aldi and Lidl, both retailers still have substantial expansion plans for the UK – particularly within the M25 – over the next few years.
“The rise of these value operators has significantly impacted the market share of the Big Four, declining from 57.9% in 2010 to 51.0% in 2020 and expected to reduce a further percentage point by 2024. To help prevent further decline, the major supermarkets must not only remain competitive on average basket spend, but need to also target growing shopper concerns on product sustainability and retailer ethics.”
Aldi now operates more than 875 outlets across the UK with it on track to have 1,200 by 2025. Meanwhile, Lidl revealed at the end of last year that it was accelerating its expansion programme with plans to open another 230 stores in the next three years, taking its total UK estate to 1,000 by 2023. The discounter is also thought to be preparing to launch an e-commerce operation in the UK.
NAM Implications:
- Time to accept that the mults are not coming back…
- …to the market shares that were the basis of our current NAM structures.
- Time for a reset?
