Convenience to ‘modestly outperform’ UK grocery market by 2027: IGD

2022 will see a return to more buoyant growth for the convenience channel as shopping behaviour normalises, says IGD report today (14), adding that the channel will continue to modestly outperform the market.

According to IGD’s 2022-2027 channel forecasts, the UK grocery market is set to grow by 11.3 percent – from £216.8bn to £241.3bn – between 2022 and 2027. While inflation will underpin the majority of growth in 2022, with a 3.5 percent value increase predicted, this will moderate from 2023 onwards.

Convenience channel is set to grow by 13 percent in 2022-27, says the report.

The report further adds that following a 2021 impacted by tough comparatives, 2022 will see a return to more buoyant growth for the convenience channel as shopping behaviour normalises and events provide a boost. Thereafter, the channel will continue to modestly outperform the market, sustained by ongoing investment from retailers in new and improved stores bringing enhanced capability to the channel.

Patrick Mitchell-Fox, Senior Business Analyst at IGD and convenience channel expert, comments:“2022 will be boosted by a number of big event opportunities – including the Platinum Jubilee in early June and the football World Cup in November.

“A hoped-for good summer would create additional opportunities, helping cement the recovery of city centres and travel, both domestic and in-bound tourism. However, it is clear that inflation will be an important factor in driving value sales during the year.”

With the war in Ukraine impacting the UK supply chain and food prices expected to increase by 8.9 percent in 2022, IGD anticipates shoppers will respond to this and the spike in general inflation by making real terms cuts in food expenditure.

With an expected growth of 23.9 percent, IGD says that discount will be the fastest growing channel over the forecast period, driven by a combination of households looking to save money, discount retailers expanding their store networks, and variety discounters sharpening their grocery offer. Channel growth however will be held in check by a more competitive offer at multiples and by the increasing risk of sales cannibalization in catchments where they are already well represented, says the report.

At projected growth of 6.2 percent, supermarkets’ modestly positive growth over the forecast period will mean they outperform hypermarkets though the channel’s market share will decline slightly.

Channel values (£bn)