IGD has published its latest UK Retail Grocery Channel Forecasts report, which includes predictions for in-store, online, and convenience grocery shopping until 2029, an outline of the factors currently affecting UK grocery, and a low, medium and high growth view of the future.
While real-term market growth is now 2.4%, the main driver is still inflation. IGD expects real-term growth to continue at a lower level during 2025-26, with it not expected to rise above 1.0% for the rest of the forecast.
Meanwhile, the report highlights that shoppers are still using money-saving tactics developed during the cost-of-living crisis. Real wage growth is expected to return to its 2008 rate in 2026, although IGD anticipates a higher tax burden on households later in the forecast.
Meanwhile, the convenience and online channels are forecast to boom over the next five years, while stores focus on expanding their fresh-food offer with ranges catering to local shoppers’ needs.
Alex Rowberry, Senior Analyst at IGD, commented: “IGD believes businesses should prepare for a mid-growth scenario: UK economic growth remains low, and inflation remains the driver of grocery market performance, as real market growth remains contracted.”
Advances in technology are also expected to propel the growth of online retail as the customer experience improves, and more product availability is offered via this channel. Although supermarkets are predicted to see the highest growth in value.
Rhian Thomas, Head of UK Insight at IGD, concluded: “Our channel forecasts are uniquely comprehensive, and IGD’s insight at large is expanding to include in-depth analysis of non-food items in stores and the growing demand for in-store services.”
NAM Implications:
- Encouraging,…
- …but meanwhile, any real growth has to come at the expense of rivals.
- See Relative Competitive appeal…
- …and check the IGD channel forecasts vs your strategies.
