IGD has published its latest report on the UK grocery and foodservice wholesaling industry, revealing a stabilisation in sector growth following several years of volatility, driven by the pandemic and inflation. The sector achieved growth of 1.2% in 2024, signalling a return to normalcy, even if the pace remains modest.
Looking ahead, IGD forecasts a more robust trajectory for the industry, anticipating expansion to £42bn by 2030. This represents a compound annual growth rate of 2.5%. However, the research group noted that beneath the surface of this ‘new normal’ lie intensifying challenges for both retail and foodservice channels.
Retail channel supply remains a key concern, with sales declining by 1.2% in 2024, primarily due to a sharp 6.8% drop in the Tobacco & vape category, which continues to account for more than 30% of retail segment sales. Tobacco & vape is projected to remain a drag on overall performance, with segment growth forecast to average just 1.1% to 2030.
Excluding this category, retail segment sales showed a modest positive increase of 1.6% in 2024. Yet, weak performance in other categories, such as chilled & fresh food (-1.7%), emphasises the ongoing challenge for operators to diversify sales streams. In contrast, impulse categories such as soft drinks experienced notable growth, rising 3.8% in 2024, a testament to the resilience of certain core product areas.
Foodservice wholesaling delivered solid results, with sales increasing by 3.2% in 2024, buoyed by growth across major product categories. The outlook remains favourable, although IGD noted that operators face mounting pressures to secure profitability, particularly given the sector’s reliance on customer delivery (representing 85% of sales) and the resulting higher operating costs. As businesses strive for profitability, many are pursuing acquisitions to broaden customer bases and product capabilities.
Patrick Mitchell-Fox, Insight Partner at IGD, commented: “As the UK wholesale sector emerges from a period of unprecedented disruption, our latest research points to a renewed sense of stability and opportunity. While challenges persist, particularly in the retail channel and with categories like tobacco & vape, we are seeing promising signs of growth, innovation, and resilience. The sector’s willingness to adapt, invest, and pursue new opportunities will be key to unlocking sustainable long-term success.”
